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On Jan. 11, 2016, the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) issued its annual Examinations Priorities for 2016 (Exam Priorities), which…
Continue Reading SEC’s Office of Compliance Inspections and Examinations Releases Annual Examination Priorities

Two weeks ago, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued its newest guidance on the subject of cybersecurity in the form of a new National Exam Program (NEP) Risk Alert, issued Sept. 15. In addition to the matters discussed below, the Risk Alert contains links to several earlier Commission and OCIE materials, including to the March 2014 SEC Cybersecurity roundtable, past NEP cybersecurity-related releases, and the 2015 SEC examination priorities.

With the purpose of “[providing] additional information on the areas of focus for OCIE’s second round of cybersecurity examinations” and in addition to informing industry participants that testing and assessing the implementation of cybersecurity procedures and controls will characterize the next phase of exams, the Risk Alert identifies six key areas of focus for OCIE: (1) governance and risk assessment; (2) access rights and controls; (3) data loss prevention; (4) vendor management; (5) training; and (6) incident response. The Risk Alert also provides a sample document request, which regulated entities may use in assessing their cybersecurity programs.Continue Reading OCIE Issues New Cybersecurity Risk

In a recent public speech, CFTC Chairman Timothy Massad described cybersecurity as “perhaps the single most important new risk to market integrity and financial stability.”  On March 18, 2015, CFTC staff conducted a roundtable regarding this topic, during which CFTC suggested possible proposed rulemaking.  CFTC staff said that CFTC is considering a rule imposing cybersecurity requirements on exchanges and clearing organizations, but one that at least initially would not apply to other market participants.  Chairman Massad indicated that a proposed rule would focus on setting standards for testing: (a) system safeguards; (b) vulnerability and penetration; (c) key controls; and (d) business recovery and disaster recovery. 
Continue Reading Cybersecurity Viewed as Market Risk by CFTC