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U.S. GOVERNMENT
INFORMATION
Gp
115TH CONGRESS REPORT
1st Session HOUSE OF REPRESENTATIVES 115-405
MARKET DATA PROTECTION ACT OF 2017
NOVEMBER 9, 2017.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
[To accompany H.R. 3973]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 3973) to amend the Securities Exchange Act of 1934 to
require certain entities to develop internal risk control mechanisms
to safeguard and govern the storage of market data, having consid-
ered the same, report favorably thereon without amendment and
recommend that the bill do pass.
PURPOSE AND SUMMARY
On October 5, 2017, Representatives Warren Davidson and Brad
Sherman introduced H.R. 3973, the Market Data Protection Act of
2017, which amends the Securities Exchange Act of 1934 (Ex-
change Act) to require, in consultation with the Securities and Ex-
change Commission's (SEC) Chief Economist, the development of
comprehensive internal risk control mechanisms to safeguard and
govern the storage and use of market data by the SEC and the op-
erators of the consolidated audit trail (CAT). The bill also halts
market data reporting to the CAT until such internal risk control
mechanisms are developed for the CAT.
BACKGROUND AND NEED FOR LEGISLATION
On July 11, 2012, the SEC approved a final rule to require ex-
changes and the Financial Industry Regulatory Authority (FINRA)
to jointly submit a comprehensive plan detailing how they would
develop, implement, and maintain a consolidated audit trail that
must collect and accurately identify every order, cancellation, modi-
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