Both the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have recently issued guidance to broker-dealers on cybersecurity, providing valuable resources for them and for registered investment advisors to combat the growing threat of cyber-attacks. The two reports should provide the tools and information needed by those broker-dealers who have put off focusing on cybersecurity to strengthen their data protection capabilities. Broker-dealers would do well to read these reports in full and then apply their useful industry intelligence toward improving their systems and procedures.
As demonstrated by recent high-profile data breaches, such disruptions can have financially devastating and long-term consequences for companies of all types. Fortunately, both of these reports contain vital information for firms interested in effectively protecting their customers' private information. By examining particular firms' cybersecurity practices, the reports provide others with the opportunity to bolster their information-security policies to match the industry leaders, most critically in the following areas: responding promptly to cyber-attacks; cultivating a culture of compliance from the senior level down; training internal staff and outside vendors on information security, and purchasing cybersecurity insurance. With the benefit of these resources and others, firms might find that the job is not as daunting as they feared.
To read the full report, click here.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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