On September 15, the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued a risk alert regarding the SEC’s ongoing cybersecurity examinations of registered broker-dealers and investment advisers, which will build on its first round of examinations, concluded in February. The latest round of examinations will involve more testing to assess implementation of firm cybersecurity procedures and controls. The risk alert provides information regarding the areas the OCIE will emphasize during the examinations. Topics of focus remain governance and risk assessment, access rights and controls, data loss prevention, vendor management, training, and incident response.
An appendix to the risk alert includes a sample list of information the OCIE may review when examining registered entities regarding cybersecurity matters. The list is by no means exclusive. In fact, language in both the risk alert and its appendix stresses that the adequacy of any risk management system will depend on an individualized assessment that considers factors such as a firm’s business model, systems, and information technology environment.
The risk alert is consistent with NIST's February 2014 Framework for Improving Critical Infrastructure Cybersecurity, and the Federal Financial Institutions Examination Council’s (FFIEC) cybersecurity assessment tool, which was released in June 2015. While it contains no new standards, per se, it demonstrates the high priority the SEC continues to place on its cybersecurity initiative. Given the SEC’s focus—and the serious nature of the potential risks involved—compliance professionals must tackle the issue, determining the policies and procedures that make the most sense for their organizations.