The Fixing America's Surface Transportation Act (FAST Act) signed by President Obama on December 4, 2015 modifies a financial institution’s requirement to provide an annual privacy notice to its customers. Under Regulation S-P, financial institutions, such as mutual funds, investment advisers and broker dealers, must provide clients or investors with an initial notice of their privacy policies and practices. A financial institution is also required by Regulation S-P to provide its clients or investors a privacy notice at least annually. The FAST Act eliminates a financial institution’s annual obligation to provide its privacy notice to its customers if:
- its privacy policies and practices with respect to disclosing nonpublic personal information have not changed from the policies and practices disclosed in the most recent privacy notice and
- it only shares nonpublic personal information with nonaffiliated third parties in a manner that does not require an opt-out right to be provided to customers.
Financial institutions that cannot meet both of these conditions must continue to provide a privacy notice annually. All financial institutions will continue to be required to provide an initial privacy notice to clients or investors. This provision of the FAST Act went into effect retroactively on October 1, 2015.