4 Ways SEC’s New Proposed Rules Put Cybersecurity Front and Center for Advisors

In its most focused and significant response to cyber threats in nearly 20 years, the Securities and Exchange Commission released on Feb. 9 proposed new rules regarding cybersecurity risk management, risk disclosures and reporting. My partner Trina Glass spoke to me about the impact that Rule 206(4)-9 under the Investment Advisers Act of 1940 and Rule 38-2 under the Investment Company Act of 1940 could have on the advisory industry. 

The intent of the proposed rules is to address the SEC’s concerns regarding advisors’ and funds’ cybersecurity preparedness, reduce cybersecurity-related risks to clients and investors, improve advisor and fund disclosures about cybersecurity risks and incidents, and enhance the SEC’s ability to assess systemic risks, Glass explained. SOURCE