Securities and Exchange Commission (SEC)

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On February 21, 2018, the U.S. Securities and Exchange Commission approved the release of Interpretive Guidance relating to public company disclosures of cybersecurity risks and incidents. This guidance replaces staff guidance from the Division of Corporate Finance issued way back in October 2011 – on the same day that iPhone 4 was released.

Although the Commission voted unanimously to release it, some Commissioners do not view the new guidance as going much beyond the 2011 staff guidance. In fact, Commissioner Kara Stein wondered whether the new guidance would cause public companies to step up their cybersecurity disclosures – or “will law firms simply produce a host of client alerts reaffirming their alerts from years past.” We sense a challenge.
Continue Reading  SEC Releases Guidance on Public Company Cybersecurity Disclosures

The SEC Office of Compliance Inspections and Examinations (OCIE) has announced its 2018 examination priorities. Unsurprisingly, cybersecurity remains among the key priorities. OCIE has included cybersecurity as an examination topic since at least 2014.

OCIE released its 2018 priorities to “improve compliance, prevent fraud, monitor risk, and inform policy.” OCIE conducts the SEC’s National Exam Program (NEP), whose mission is to protect investors, ensure market integrity and support responsible capital formation through risk-focused strategies that: (1) improve compliance; (2) prevent fraud; (3) monitor risk; and (4) inform policy. The results of the NEP’s examinations are used by the SEC to inform rulemaking initiatives, identify and monitor risks, improve industry practices and pursue misconduct. OCIE is responsible for conducting examinations of broker-dealers, investment advisers, transfer agents, and other SEC-regulated entities.
Continue Reading  SEC Continues to List Cybersecurity Among OCIE Examination Priorities