On January 28, 2021, the UK Financial Conduct Authority (FCA) published Consultation Paper CP21/3, “Changes to the SCA-RTS and to the guidance in ‘Payment Services and Electronic Money – Our Approach’ and the Perimeter Guidance Manual” (Consultation Paper). This follows the FCA’s announcement in its 2020-21 business plan that payment services were one of its main supervisory priorities1 and its temporary guidance of July 9, 2020, on prudential risk management and safeguarding in light of the COVID-19 pandemic (Temporary COVID Guidance).
The FCA is proposing amendments to:
- the UK onshored versions of EU technical standards on strong customer authentication (SCA) and common and secure methods of communication (UK SCA-RTS);
- its Approach Document on Payment Services and Electronic Money (Approach Document); and
- its Perimeter Guidance Manual (PERG).
On February 4, 2021, the New York Department of Financial Services (NYDFS) issued Circular Letter No. 2 announcing a Cyber Insurance Risk Framework (the Framework) that describes industry best practices for New York-regulated property/casualty insurers. Issuance of the Framework is notable as it represents the first official guidance by a U.S. regulator concerning the increasingly critical issue of cyberinsurance. And while circular letters do not establish new legal requirements or have the force of law, they do set forth the department’s interpretation of the requirements of existing laws and regulations.1
Released on February 1, the Financial Industry Regulatory Authority (FINRA) 2021 Report on its Examination and Risk Monitoring Program (Report) provides a roadmap for member firms to use to prepare for examinations and to review and assess compliance and supervisory procedures related to business practices, compliance, and operations. The Report replaces two of FINRA’s prior annual publications: (1) the Report on Examination Findings and Observations, which provided an analysis of prior examination results, and (2) the Risk Monitoring and Examination Program Priorities Letter, which highlighted areas FINRA planned to review in the coming year.
Most cybersecurity professionals are aware of the New York Department of Financial Service’s requirement imposed on DFS-licensed entities to certify their cybersecurity program’s compliance on an annual basis (by April 15th of each year), but less well known is that numerous other states impose similar requirements on regulated insurance entities and that deadline for many states is coming up on February 15, 2021.
On January 19, 2021, the U.S. Department of Commerce (Commerce) issued interim final regulations (interim rules) implementing Executive Order 13873, Executive Order on Securing the Information and Communications Technology Services Supply Chain (EO), which was intended to address alleged threats against information and communications technology and services (ICTS) in the United States. The new review mechanism focuses on transactions involving any acquisition, importation, transfer, installation, dealing in, or use of ICTS that has been designed, developed, manufactured, or supplied by parties owned by, controlled by, or subject to the jurisdiction or direction of “foreign adversaries.”
While the focus on the rules is not foreign investment per se, it will complement the Committee on Foreign Investment in the United States’ (CFIUS) investment security review mechanisms. Indeed, the interim rules borrow several concepts and definitions from CFIUS’s recently amended regulations.
Commerce invited interested parties to submit comments on the interim rules. Parties must submit comments by March 22, 2021. Commerce will publish final regulations after considering any comments submitted.
This post provides key takeaways and a brief summary of Commerce’s new review mechanism.
The results are in, and California voters have approved the California Privacy Rights Act (CPRA) which was listed on the ballot as Proposition 24. The law, most of which does not go into effect until January 1, 2023, will substantially overhaul and amend the California Consumer Privacy Act (CCPA) which went into effect just this year, on January 1, 2020, with final regulations issued just a few months ago, on August 14, 2020. And indeed, CCPA obligations continue to evolve, with proposed amendments to the regulations proposed by the Attorney General’s Office mid-October 2020.
Recent changes to Chinese law have broad implications on cross-border data transfer in the course of investigations conducted by non-Chinese regulators. Clients work closely with counsel to navigate potential legal landmines in any defense of an investigation involving data from China.
Just over six months ago, on March 24, 2020, the People’s Republic of China’s (PRC) revised Securities Law (revised on December 28, 2019) (中华⼈民共和国证券法（2019年修订) went into effect. While the revised Securities Law affects many aspects of China’s securities law framework (including the registration of new securities for initial public offerings, disclosure requirements, and investor protection rules), a new “blocking” provision is particularly notable. Specifically, Article 177 of the revised Securities Law prohibits non-Chinese securities regulators from conducting investigations within China and prevents Chinese individuals and entities from providing information to such regulators without first receiving approval from the China Securities Regulatory Commission and/or other competent departments under the State Council.
On October 1, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) published an advisory that highlights the risk of potential U.S. sanctions law violations if U.S. individuals and businesses comply with ransomware payment demands.1
Ransomware attacks use malware, often injected through phishing schemes, to encrypt a victim’s data files or programs, followed by a ransom demand by the threat actor that offers the decryption key in exchange for payment. Payment is often demanded in bitcoin, and thus third-party services are often used to make such payments. Increasingly, ransomware attacks not only lock data up but steal data from the victim and threaten to publish sensitive files belonging to victims. According to OFAC, ransomware attacks have been increasing over the last two years and are a special risk during the COVID-19 pandemic, with cybercriminals targeting not only large corporations but also small to medium enterprises, hospitals, schools, and local government agencies.2
*This article was adapted from “Global Overview,” appearing in The Privacy, Data Protection and Cybersecurity Law Review (7th Ed. 2020)(Editor Alan Charles Raul), published by Law Business Research Ltd., and first published by the International Association of Privacy Professionals Privacy Perspectives series on September 28, 2020.
Privacy, like everything else in 2020, was dominated by the COVID-19 pandemic. Employers and governments have been required to consider privacy in adjusting workplace practices to account for who has a fever and other symptoms, who has traveled where, who has come into contact with whom, and what community members have tested positive or been exposed.
As a result of all this need for tracking and tracing, governments and citizens alike have recognized the inevitable trade-offs between exclusive focus on privacy versus exclusive focus on public health and safety.
In almost the first three quarters of 2020, the U.S. Department of Health and Human Services, Office for Civil Rights (“OCR”) has settled three cases related to alleged violations of the Health Insurance Portability and Accountability Act (“HIPAA”), totaling $1,165,000. These settlements underscore OCR’s continued focus on enforcement of the HIPAA Security Rule.