SEC to Examine Registered Broker-Dealers’ and Investment Advisers’ Procedures for Countering Cybersecurity Threats

Posted on April 28th, by , , and in Cybersecurity, Office of Compliance Inspections and Examinations, SEC Guidance. Comments Off on SEC to Examine Registered Broker-Dealers’ and Investment Advisers’ Procedures for Countering Cybersecurity Threats

Background and Purposes

On April 15, 2014, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a “Risk Alert” explaining a new initiative to assess cybersecurity preparedness in the securities industry.  Although not an official rule, regulation or statement of the SEC, the Risk Alert advised that OCIE will be conducting examinations of more than 50 registered broker-dealers and registered investment advisers, regarding their cybersecurity and data security procedures and policies.

OCIE’s cybersecurity initiative is designed to obtain information about the industry’s recent experiences with certain types of cyber threats.  The examinations will focus on the following topics: the firm’s cybersecurity governance, identification and assessment of cybersecurity risks, protection of networks and information, risks associated with remote customer access and funds transfer requests, risks associated with vendors and other third parties, detection of unauthorized activity, and experiences with … Read More »




From the Blog:

NFA Proposes Enhanced Disclosure Requirements for Members Engaging in Virtual Currency Activities

The National Futures Association (“NFA”) recently proposed an interpretive notice updating disclosure requirements for its members engaged in virtual currency (i.e. cryptocurrency) activities. Self-Regulatory...

OCIE Issues Risk Alert on Issues Related to Best Execution by Investment Advisers

Pursuant to their fiduciary duties, investment advisers have certain obligations to seek out “best execution” for client transactions. The SEC’s Office of Compliance Inspections...

SEC says Bitcoin and Ether are not Securities

“I believe every ICO I’ve seen is a security and we have jurisdiction and our federal securities laws apply.” Clayton, J., Testimony, Sen. Banking,...