Conquering Current Compliance Challenges
Aug. 14, 2019 | 2:00 - 2:30 PM EST
 
RECORDED WEBINARS

Conquering Current Compliance Challenges
Recorded: June 11, 2019 
 
Includes: Best Practices, Key Regulatory Issues and Compliance Tips
 
Includes: 23 Best Practices, 5 Peer-tested tools and 15 No Action Letters


 
CYBERSECURITY OVERVIEW
Cybersecurity currently is a top priority for the SEC’s and FINRA’s examination staffs.  An initial “Phase 1” cybersecurity sweep of 49 investment advisers and 57 broker-dealers conducted by OCIE in 2014 yielded a Risk Alert offering summary observations of findings (FINRA also produced an alert).  Some 90% of the B-Ds subjected to the sweep reported being the target of a cyber-attack. 
 
The SEC has placed such a high priority on the issue that they are initiating a “Phase 2” sweep.  This time examiners will be on site and digging deeply into key cyber concern areas.  OCIE has stated that the repercussions of not being prepared for a cyber-attack are “quite significant.”  Compliance should be prepared to detail their practices for:
  • Identifying risks related to cybersecurity;
  • Establishing cybersecurity governance, including P&Ps and oversight processes;
  • Protecting firm networks and information;
  • Identifying and addressing risks associated with remote access to client information and funds transfer requests;
  • Identifying and addressing risks associated with vendors and other third parties; and
  • Detecting unauthorized activity.

Compliance questions

Compliance could also expect to be asked about the detection and impact of cyber-attacks, their firm’s preparedness for cyber-attacks, training and policies relevant to cybersecurity, and the firm’s protocol for reporting cyber breaches.
 
The vast majority of firms have adopted written information security policies.  The vast majority of the examined firms also conduct periodic risk assessments to identify cybersecurity threats, vulnerabilities and potential business consequences.
 
Reg. S-P (the “safeguards rule”), Reg. I-D (the “red flags rule”) and Business Continuity Plans all touch on the issue of cybersecurity.
 

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