2020 Investment Adviser Update—There’s a “Voice Inside Your Head You Refuse to Hear” (But You Should)

SEC Examination Priorities for 2020

On January 7, 2020, the SEC’s Office of Compliance Inspections and Examinations (OCIE) published its examination priorities for 2020 (Exam Priorities) for various regulated entities, including investment advisers. [2] OCIE announces its exam priorities annually to provide insights into the areas it believes present potentially heightened risk to investors or the integrity of the U.S. capital markets. [3] The Exam Priorities can serve as a roadmap to assist advisers in assessing their policies, procedures and compliance programs; testing for and remediating any suspected deficiencies related to the Exam Priorities; and preparing for OCIE exams. Advisers are encouraged to review their current policies, procedures and client disclosures with these priorities in mind. Exempt reporting advisers (ERA) as well as registered investment advisers (RIA), are subject to SEC examination, although the SEC has indicated that it does not expect to examine ERAs on a routine basis.

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Are You in Compliance With New York’s Newest Requirement to Develop, Maintain, and Implement Reasonable Safeguards to Protect New Yorkers’ Private Information?

The new data security requirements provision of New York’s Stop Hacks and Improve Electronic Data Security (SHIELD) Act went into full force as of March 21, 2020, and all people and businesses, regardless of the state in which they reside, must comply with the new rules if they handle the private information of New York residents.

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How to Move to Remote Work and Comply with U.S. Privacy and Cybersecurity Laws

Cybercriminals are known to attack networks and individuals at inopportune times of crisis—and the coronavirus pandemic, unfortunately, presents just such an opportunity as millions are accessing corporate networks and databases from home. This past weekend New Jersey and Connecticut joined the growing list of jurisdictions (e.g., California, Delaware, Illinois, Louisiana, Ohio, and New York) to issue orders effectively requiring non-essential workers to avoid the workplace, and in some cases, to shelter-in-place.

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Guidelines & Tips for Working Remotely

Working remotely, whether short-term or permanent comes with many perks, but it also poses many new risks for the security of your organization’s data. For example, if an employee-owned device (laptop, PC, etc.) is connected to the company’s network and contains a virus or malware, they could be spread to your company’s network. Additionally, it becomes more of a challenge to verify the legitimacy of emails (for example, you’re no longer right down the hall from your CEO who requested an unusual wire transfer), you may be unfamiliar with policies and procedures as they pertain to a work from home environment, and the list goes on.

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United States: SEC And FINRA Signal Renewed Focus On Vendor Management In Two Key Areas

The SEC and FINRA have made clear that market participants retain accountability for certain activities carried out on the platforms of external vendors and should not rely on vendors' controls to satisfy the firm's own obligations.  To avoid the pitfalls of such third-party arrangements, firms should incorporate these relationships into their regular risk assessments.  Where deficiencies are identified, firms should establish a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of this business activity.  Critically, Firms must implement and practice meaningful management oversight of vendor relationships, with clear escalation lines.

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