Nothing in life is free.

And when it comes to the yet-to-be constructed consolidated audit trail or CAT, which the SEC mandated be built to help track equity trading data and assist it in monitoring and policing the market, it looks like the brokers are going to pay for the lion’s share of the costs.

According to the first exchange filing of fees for the CAT), the sell-side will bear, at least initially, a whopping 75% of the fees associated with running it. In comparison, the exchanges and ATSs share comes to only 25%, with allocations to be made by message traffic for brokers and by volume for venues.

Fees will be charged on a quarterly basis. Each broker or trading venue will receive one invoice for its applicable CAT Fees, not separate invoices if it operates multiple brokerages or trading platforms. The industry will pay its CAT fees to the a central to-be-created company via a centralized system designed solely for the collection of fees as established by CAT operating committee.

Recently, Thesys Technologies, a big data provider and technology subsidiary of Tradeworx, Inc, announced that it signed the CAT contract with the Self-Regulatory Organizations (SRO) to build a big data system to manage the tracking and auditing of all stocks and options transactions by the Securities and Exchange Commission.

The consortium of SROs, responsible for developing and implementing the CAT system, selected Thesys Technologies in January 2017 to build and replace legacy reporting systems. Thesys Technologies established Thesys CAT LLC as a separate legal entity to act as the CAT plan processor.

CAT is expected to cost $50m in year 1, dropping to $37m/year thereafter.

Within the filing, there will be an annual fee of approximately $400,000 for Tier 1 brokers (think the bulge) and $250k for Tier 1 venues (NYSE, BATS). Also, firms with multiple brokers and/or venues pay a la carte; the filing estimates that the biggest individual organizational charges will be $1.9 million per year for an exchange holding company and $900,000 for a large broker.

In related news, the Financial Industry Regulatory Authority announced last week that it plans the gradual wind-down of its own trade audit system. The now planned closure of the OATS system, remains subject to accuracy and quality control tests that have t be completed new Consolidated Audit Trail being built. OATS closure was confirmed by FINRA’s own William Wollman who spoke last week at the SIFMA Operations conference in Boca Raton, Fla. Wollman said that the agency expects the shutdown to commence in approximately two years.

FINRA established the Order Audit Trail System (OATS) back I 1998, as an integrated audit trail of order, quote, and trade information for all NMS stocks and OTC equity securities. It was created under FINRA Rules 7410 – 7470, whereby FINRA member firms were required to develop a means for electronically capturing and reporting to OATS specific data elements related to the handling or execution of orders, including recording all times of these events in hours, minutes, and seconds, and to synchronize their business clocks.