SEC issues cybersecurity exam observations

Abstract

Purpose

To summarize and comment on a Risk Alert issued on February 3, 2015 by the SEC’s Office of Compliance Inspections and Examinations (OCIE) to summarize its findings following examination of the preparedness of 57 broker-dealers and 49 investment advisory firms to address legal, regulatory and compliance challenges related to cybersecurity.

Design/methodology/approach

Comments on the meaning of the Risk Alert and summarizes OCIE’s exam observations.

Findings

These examinations grew out of the SEC’s Cybersecurity Examination Initiative which began last year. Cybersecurity is an Exam Priority for the SEC in 2015. Perhaps most reflective of the magnitude of this particular issue, 88 per cent of the broker-dealers and 74 per cent of the examined advisers reported that they have been the subject of a cyber-related incident.

Originality/value

Expert guidance from experienced securities lawyers.

Citation

Kuhlman, R. and Kempf, J. (2015), "SEC issues cybersecurity exam observations", Journal of Investment Compliance, Vol. 16 No. 2, pp. 44-46. https://doi.org/10.1108/JOIC-04-2015-0024