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SEC

19 February 2018

Cybersecurity Identified as an SEC OCIE Examination Priority for 2018

On February 7, 2018, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released its 2018 National Exam Program Examination Priorities (2018 Exam Priorities) and, once again, identified cybersecurity as one of its main areas of focus.  According to OCIE, each of its examination programs will prioritize cybersecurity. The 2018 Exam Priorities include five main focus areas:  (1) cybersecurity; (2) compliance and risks in critical market infrastructure; (3) matters of importance to retail investors, including seniors and those saving for retirement; (4) oversight of the Financial Industry Regulatory Authority (FINRA) and Municipal Securities Rulemaking Board (MSRB); and (5) anti-money laundering programs.  For an in-depth discussion regarding the entirety of the 2018 Exam Priorities, see Sidley’s previous analysis here(more…)

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13 February 2018

SEC Office of Compliance Inspections and Examinations Publishes 2018 Exam Priorities

On February 7, 2018, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (the Commission) released its annual National Exam Program Examination Priorities (Exam Priorities).1 As has been widely reported, the Exam Priorities’ general focus areas include:

  • retail investors
  • compliance and risks in critical market infrastructure
  • oversight of the Financial Industry Regulatory Authority (FINRA) and Municipal Securities Rulemaking Board (MSRB)
  • cybersecurity
  • anti-money laundering (AML) programs

The majority of these Exam Priorities are not surprising because they reflect the Commission’s continued focus on retail investors, conflicts of interest, fee disclosure, cybersecurity, cryptocurrency and AML programs.2 The Exam Priorities can serve as a roadmap for firms to assess their policies, procedures and compliance programs, and to prepare for OCIE exams. This post outlines and elaborates on each of the Exam Priorities. (more…)

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02 January 2018

Privacy and Cybersecurity Top 10 for 2018

This past year was marked by ever more significant data breaches, growing cybersecurity regulatory requirements at the state and federal levels and continued challenges in harmonizing international privacy and cybersecurity regulations. We expect each of these trends to continue in 2018.

As we begin this New Year, here is list of the top 10 privacy and cybersecurity issues for 2018: (more…)

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16 August 2017

SEC’s OCIE Cybersecurity Risk Alert Announces Cybersecurity 2 Observations

On August 7, 2017, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a cybersecurity Risk Alert summarizing its observations from its second cybersecurity survey of financial services firms.  Overall, OCIE observed increased cybersecurity preparedness since its first 2014 “Cybersecurity 1” Initiative, but also the SEC noted a number of areas where compliance and oversight merit attention.  Perhaps the most general observation from the “Cybersecurity 2” risk alert is that, while the OCIE noted that most firms now have written policies and procedures, the message was clear that simply having a generic policy is not adequate.  Firms must instead have policies that are adapted to their actual operations as well as procedures that demonstrate the implementation of these policies and documented results of compliance with those procedures.  (more…)

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19 May 2017

SEC Issues “WannaCry” Ransomware Alert to Broker-Dealers and Investment Companies

On May 17, 2017, the SEC’s Office of Compliance Inspections and Enforcement (OCIE) issued a cybersecurity alert to the securities firms it regulates. OCIE advised broker-dealers and investment companies to take certain actions in connection with the recent WannaCry and Wanna Decryptor ransomware attacks that affected numerous organizations in over one hundred countries.  Specifically, OCIE encouraged firms as follows: (more…)

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24 February 2017

New NACD Cyber-Risk Handbook a Reminder of Critical Board Oversight Duties

*This article first appeared in Bloomberg BNA Corporate Law & Accountability Report on February 23, 2017

On Jan. 12, 2017, the National Association of Corporate Directors (NACD) released its new “NACD Director’s Handbook on Cyber-Risk Oversight.” The NACD has suggested that directors can use this Cyber-Risk Oversight Handbook as a resource to “[l]earn foundational principles for board-level cyber-risk oversight” and gain insight into issues including how to:

  • “allocate cyber-risk oversight responsibilities at the board level”;
  • address “legal implications and considerations related to cybersecurity”;
  • “set expectations with management about the organization’s cybersecurity processes”;
  • “improve the dialogue between directors and management on cyber issues”; and,
  • “improve and enhance boardroom practices.”

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13 June 2016

SEC Interest in Cybersecurity Continues; Chair Views Cybersecurity as Biggest Risk to the Financial System

Securities and Exchange Commission Chair Mary Jo White emphasized the agency’s focus on cybersecurity preparedness and response at a conference in Washington, D.C. in mid May, stating “we can’t do enough in this sector.”  Reuters reports that Chair White views cybersecurity as the biggest risk facing the financial system, quoting her as saying that “what we [have] found…is a lot of preparedness, a lot of awareness but also….policies and procedures [that] are not tailored to [entities’] particular risks.”

(more…)

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11 January 2016

Top Ten Data Protection and Privacy Issues to Watch in 2016

*This post originally appeared in Law360 on January 7, 2016.

While 2015 was a big year in data, 2016 may prove to be even bigger.  Many hot button and game changing topics are being debated in legislative bodies and campaign trails, regulators are focused, and privacy-related litigation continues to rise. Below, we count down the top ten cybersecurity, data protection and privacy issues to watch in 2016.

(more…)

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08 December 2015

The FAST Act’s Cybersecurity and Privacy Provisions for the Electric Grid, Internet of Things, and Connected Cars

On Friday, December 4, President Obama signed the Fixing America’s Surface Transportation (“FAST”) Act, a $300 billion-plus highway and transportation law and the first comprehensive transportation spending law in a decade. Despite its title, the bill impacts a number of regulated sectors. Nestled within this 490-page law are 13 pages that pertain to cybersecurity and other protections for the electric grid. As detailed below, the FAST Act also includes a number of privacy and cybersecurity provisions relating to privacy notices by financial institutions as required by the Gramm Leach Bliley Act, event data records in vehicles, Internet of Things technologies, and connected cars.

(more…)

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17 September 2015

SEC’s OCIE Cybersecurity Risk Alert Announces Cybersecurity Examination Initiative

On September 15, 2015, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert announcing a new Cybersecurity Examination Initiative. The Alert provides the agency’s areas of focus for its next round of cybersecurity examinations of broker-dealers and investment advisers.

(more…)

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