The SEC Office of Compliance Inspections and Examinations (OCIE) issued examination observations related to cyber-security and operational resiliency practices of market participants. The observations highlight approaches of market participants in the areas of governance and risk management, access rights and controls, data loss prevention, mobile security, incident response and resilience, vendor management, and training and awareness. The observations cover specific examples of cyber-security and operational resiliency practices and controls that organizations have taken to potentially safeguard against threats and respond in the event of an incident.
While the effectiveness of any given cyber-security program is fact-specific, it has been observed that a key element of effective program is the incorporation of a governance and risk management program that generally includes, among other things:
- Developing and conducting a risk assessment process to identify, manage, and mitigate cyber risks relevant to the organization’s business. This includes considering the organization’s business model, as part of defining a risk assessment methodology, and working to identify and prioritize potential vulnerabilities.
- Adopting and implementing comprehensive written policies and procedures addressing the identified risks.
- Establishing comprehensive testing and monitoring to validate the effectiveness of cyber-security policies and procedures on a regular and frequent basis. Testing and monitoring can be informed based on cyber threat intelligence.
- Responding promptly to testing and monitoring results by updating policies and procedures to address any gaps or weaknesses and involving board and senior leadership appropriately.
OCIE conducts examinations of SEC-registered investment advisers, investment companies, broker-dealers, self-regulatory organizations, clearing agencies, transfer agents, and others. It uses a risk-based approach to examinations to fulfill its mission to promote compliance with U.S. securities laws, prevent fraud, monitor risk, and inform SEC policy.
Keywords: Americas, US, Securities, Operational Resilience, Governance, Data, Cyber Risk, SEC
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