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TSaaS: The Simple Solution to SEC Rule 613 Consolidated Audit Trail (CAT)

Wednesday, June 17, 2020   (0 Comments)
Posted by: Abbey Kwiat
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The Steadfast Team

Time synchronization services have been around for a long time, but now the SEC's Rule 613 (Consolidated Audit Trail) requires accurate time. Time-Synchronization-as-a-Service makes compliance to this rule much more simple.

What is Time-Synchronization-as-a-Service (TSaaS)?

Like many other cloud services, TSaaS is built on the idea of using a pool of shared resources to be able to more efficiently, thus less expensively, deliver a specific resource. Often, that resource is computing power, storage space, or a specific application, but here that resource is highly accurate and traceable time. TSaaS has existed for years, coming into more popular use with other cloud services and the increased prevalence of distributed computing. With large farms of servers needing to process many millions of transactions a second across them, knowing which transactions happened first is very important.

These time readings are retrieved from highly accurate global navigation satellite systems (such as GPS/GNSS) to globally distributed Grandmaster time servers with up to 30 nanoseconds accuracy, 30/1,000,000,000 of a second, compared to NIST or UTC time standard. It is common that time is simply distributed from those GPS/GNSS clocks directly to servers and other systems using Network Time Protocol (NTP) and Precision Time Protocol (PTP).

Steadfast additionally utilizes proprietary NTP/PTP clock chain synchronization and NIST/UTC traceability compliance software from FSMTime that can use these multiple Grandmaster sources across multiple network paths, as well as any additional third-party timing sources to ensure even greater accuracy.

The bottom line: Steadfast monitors, analyses, and retrieves multiple time sources from GPS/GNSS-sourced NTP and PTP network feeds through FSMTime's software technology, to time-sync critical servers' business clocks with nanoseconds range accuracy, traceable to NIST/UTC, and retain as proof of compliance. 

How Does TSaaS Fit with SEC Rule 613 CAT?

The new SEC Rule 613 CAT will require all firms trading on the National Market System (NMS) to report to a central repository regarding each quote and order in an NMS security, and each reportable event with respect to each quote and order, such as origination, modification, cancellation, routing and execution. This data must be reported with an accuracy within 50 milliseconds of NIST and can never fluctuate outside that. All clocks, across all trading systems being synced to NIST is now suddenly very important. Now, you could build your own dedicated infrastructure to support this, but here are some reasons why Time-Synchronization-as-a-Service solutions might make more sense:

  • Time is short, You Need Fast Deployment - Requirements to meet compliance with Rule 613 are coming quickly, with large firms having to start providing data in May of 2020 and all firms needing to start providing compliant data by December of 2021.
  • Save Time and Money - A solution already exists, so why spend your time, money and effort designing your own solution? Take advantage of a shared infrastructure to reduce costs and time spent. Time-Synchronization-as-a-Service generally costs a lot less than roof rights at a single data center, while providing a much more complete set of services.
  • Reduce Risk, Ensure Accuracy - Time-Synchronization-as-a-Service is already an established product that fits the accuracy requirements of this specific time stamping rule. You can avoid the risk of challenges that come with building your own, un-tested system by utilizing a verified, turnkey solution that’s already in place.
  • This Is Not A One-Time Project, It Is A Moving Target - 50 milliseconds is just the beginning “as clock synchronization technology matures further, the Participants will assess, in accordance with Rule 613, tightening CAT’s clock synchronization standards to reflect changes in industry standards.” Let a Time-Synchronization-as-a-Service provider worry about that for you.

Setting Up for Compliance Can Be Simple

Rule 613 CAT is not to be taken lightly. The results of not having the right timestamping solution will cost you dearly in excessive fines, as well as additional investment to adjust or replace your current system to avoid future penalties. Finding the right fit for this very specific service is key – researching providers is just the beginning. To ensure you are getting exactly what you need in terms of accuracy and reliable performance, you will need to mandate scope of the providers time synchronization system, validate performance through a current client, and direct engagement with the providers engineering team will greatly help you transition smoothly.

TSaaS is a critical mix of precision Grandmaster clock software, high-end infrastructure and network connectivity at carrier hotel locations to provide access to multiple network options and backbone providers via cross-connects. Steadfast encompasses all these unique qualities in a comprehensive Steadfast TSaaS solution, featuring FSMTime’s proprietary Grandmaster hardware and software solution coupled with Steadfast’s world-class data center – comprised of all required infrastructure, satellite/GPS/GNSS technology and perfectly positioned next to the Chicago Mercantile Exchange (CME). Ease the burden of building compliance time synchronization for perfectly timestamping your application servers - simplifying and gaining peace-of-mind with TSaaS.

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