SEC and FINRA Issue Cybersecurity Publications (with Delta Strategy Group Summary)

The SEC and FINRA issued observations, suggestions and recommendations in separate publications to assist broker-dealers, investors and financial firms in developing best practices for handling cybersecurity risk.

The SEC Office of Compliance Inspections and Examinations issued a Risk Alert that contains preliminary observations based on examinations of the information technology and cybersecurity practices of over 100 broker-dealers and investment advisers. Additionally, the SEC Office of Investor Education issued an Investor Bulletin that offers suggestions to investors for minimizing cybersecurity risk with regard to their online brokerage, banking and other financial accounts, including the following: (1) in each case, pick a strong password that is unique to that online account; (2) utilize two-step verification processes for logging into accounts; and (3) ensure that wireless connections, including home networks, are "secure."

In addition to a related Investor Alert, FINRA also issued a Report that contains detailed suggestions to broker-dealers for minimizing cybersecurity risk. The FINRA Report is based on information that was collected from a cross-section of financial firms in 2014. Its conclusion is that the importance of minimizing cybersecurity risk will continue to grow for broker-dealers in the coming years.

Click here for a summary of the SEC's publications prepared by Delta Strategy Group.

See: SEC Risk Alert; SEC Investor Bulletin; FINRA Report; FINRA Investor Alert; SEC Press Release; FINRA Press Release.