As Hogan Lovells previously reported, the New York State Department of Financial Services has launched a significant initiative to impose detailed cybersecurity requirements on covered financial institutions. On February 16, NYDFS issued its Final Rules, following the initial proposed rules published in September 2016 and two rounds of feedback via industry complaints and public comment. The Final Rules set forth requirements for a risk-based approach to cybersecurity, and include expectations for reporting on cybersecurity risks and events to senior management and NYDFS.
The New York Department of Financial Services just issued major revisions to the cybersecurity regulations for financial institutions that were due to come into effect on January 1, 2017. To allow covered institutions more time to implement the rules, the effective date will now be March 1, 2017, with a series of staggered implementation dates beyond this. There are several notable substantive changes in the revised rules.
On September 12, New York Governor Andrew Cuomo broke new ground in proposing a state-level regulation that would require banks, insurance companies, and other financial services entities regulated by the New York Department of Financial Services to establish formal cybersecurity programs.
The Federal Financial Institutions Examination Council (FFIEC) has released final supervisory guidance on the use of social media by financial institutions. We last reported on the guidance when it was published in draft form in January 2013. The final guidance is substantially similar to the proposal (and we encourage you to read our prior post for more details on the elements of the guidance), but the FFIEC made certain revisions in light of the 81 public comments it received on the proposal.
The FTC Red Flags Rules were not specific to the securities industry and there was some confusion as to which entities were subject to their requirements. This blog entry describes proposed rulesto applyRed Flag rules to certain broker-dealers, investment companies, investment advisers, futures commission merchants, commodity pool operators, introducing brokers, and other SEC- and CFTC-regulated entities
On October 31st, Hogan Lovells will present a complimentary webinar exploring the impact of the SEC cybersecurity risk Disclosure Guidance, featuring senior lawyers in the Hogan Lovells Capital Markets and Privacy and Information Management practices, as well as a managing director of Stroz Friedberg LLC, a technology firm assisting clients with digital risks. This blog entry invites readers to register for the webinar.
On October 13 the Division of Corporate Finance at the US Securities and Exchange Commission issued a Disclosure Guidance that for the first time advises registrants — public companies — to evaluate their cybersecurity risks and, if deemed material, to disclose such risks to investors. This Guidance is likely to lead to public companies performing formal and detailed assessments of the cybersecurity risks, and may lead to shareholder litigation following data security breaches with claims that a company failed to perform the assessment and disclose the risks recommended in the Guidance for complaince with securities disclosure laws.
The Securities and Exchange Commission (SEC) announced yesterday that three former executives of GunnAllen Financial, Inc., a Tampa-based broker-dealer, agreed to settle charges that they had violated Regulation S-P by failing to protect confidential information about their customers. This action marked the first time that the SEC had assessed financial penalties against individuals charged solely with violations of Regulation S-P, which requires broker-dealers, investment advisers, and other financial institutions under the SEC’s jurisdiction to protect their customers’ nonpublic personal information and to provide their customers the right to opt out of having their information shared with unaffiliated third parties.
April 15 marked the release of the long-awaited customizable version of the Model Privacy Notice, a form that provides a safe harbor for compliance with the notice requirements of the Gramm-Leach-Bliley Act (GLBA). Read more about in this entry.