On October 16, 2024, the New York Department of Financial Services (“DFS”) issued guidance addressing how institutions can meet their existing obligations under 23 NYCRR 500 (“Part 500”) given new and heightened cybersecurity risks arising from artificial intelligence (“AI”). DFS recommends a number of steps for companies to prepare for such risks, including:
Read MoreThe SEC has unveiled its 2025 examination priorities, highlighting the emerging and continuing risk areas it perceives among wealth firms, investment advisers, broker-dealers, and wealth technology companies.
Read MoreThe Cyber and Analytics Unit within the Member Supervision program of the Financial Industry Regulatory Authority, Inc. ("FINRA") recently published a cybersecurity advisory regarding increasing cybersecurity risks.
The Cyber and Analytics Unit within the Member Supervision program of the Financial Industry Regulatory Authority, Inc. ("FINRA") recently published a cybersecurity advisory regarding increasing cybersecurity risks at third-party providers (the "Cybersecurity Advisory").1 The Cybersecurity Advisory highlights third-party risks to FINRA member firms and effective practices to mitigate such risks.
Read MoreWealth managers face a new reality. The costs of cybercrime will soon reach $10.5 trillion per year(according to Cybersecurity Ventures)—which is larger than the sale of all illegal drugs worldwide, combined—and financial industry participants and their clients are compelling targets. Numerous firms have already been attacked and millions of dollars of client assets have been stolen.
Read MoreIt is no surprise that with the increased use of technology and its' ever-evolving advancements, comes an increased rate in cyber-crime and threats to personal consumer information. In response to these developments, and to modernize and improve the protection of consumer information, on May 16, 2024, the Securities and Exchange Commission (SEC), announced the adoption of amendments to Regulation S-P. These rules apply to broker-dealers (including funding portals), investment companies, registered investment advisers, and transfers agents (collectively "covered institution(s)").
Read MoreThe SEC recently issued an order and settlement against a company from a pair of cyberattacks in which millions of dollars of client funds were stolen. While the company was able to recover a portion of the funds and ultimately reimbursed clients for the money lost, the SEC still fined the company $850,000 for failure to provide the necessary safeguards to protect its clients’ funds.
Read MoreYou need your
to start a job, open a bank account, apply for a loan, claim benefits and file taxes. When it’s stolen, thieves can use it to apply for more credit in your name or even apply for your government benefits.
Read MoreExams by the Securities and Exchange Commission that include an onsite portion “are back in full swing,” according to Amy Lynch, founder of FrontLine Compliance. RIAs should expect the SEC to visit “as it aggressively pursues its goal of conducting more exams,” Lynch said.
Read MoreThe SEC’s Spring 2024 Current Agenda was released on July 5, 2024, providing advisers with a mix of good news and bad news. On the good news side, the SEC decided to repropose the rules that would require investment advisers (Advisers Act Rule 211(h)(2)-4) and broker-dealers (Exchange Act Rule 15(l)-2) to eliminate or neutralize conflicts of interest that arise from the use of predictive analytics, artificial intelligence, or other covered technologies. The financial industry harshly criticized the proposal, including calls for a full withdrawal of the rule. According to the agenda, these rules will be reproposed in October 2024.
Read MoreQuick Take: The Office of Information and Regulatory Affairs, a division of the Office of Management and Budget, released its Spring 2024 Unified Agenda of Regulatory and Deregulatory Actions, which includes short- and long-term regulatory actions that government agencies, including the SEC, plan to take. The SEC’s Agenda provides insight into the SEC’s priorities and anticipated timing of actions; however, the timing of rule adoptions and proposals may vary and could come before or after dates listed in the Agenda. The SEC’s Agenda includes eight items from the SEC’s Division of Investment Management.
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