SEC to perform cyber security tests

Over 50 registered investment advisers and brokers will soon be subject to checks by the Securities and  Exchange Commission.

The purpose is to evaluate how able they are to respond to any threats to cyber security. The SEC’s Office of Compliance Inspections and Examinations (OCIE) will be conducting the assessment. It comes after a roundtable on cyber-security hosted by the body in March, during which the suggestion was made that the Commission should do more in addressing potential issues with data protection and market integrity.

The OCIE said that the process will attempt to evaluate each business’ cyber security assessment and identify any risks, along with methods of protection used to shut down information and networks. The body will further investigate any risks in money transfer requests and remote customer access, and with third parties such as vendors.

The SEC said:

“These examinations will help identify areas where the Commission and the industry can work together to protect investors and our capital markets from cyber-security threats.”

In a bid to help out businesses, the body has made available a sample request for documents and information that companies will be expected to provide during the assessment.

This is why it is important for firms to have the right cyber security staff in place. Any businesses being investigated that are found not to be taking the necessary measures may suffer some damage to their reputation, and will wish they took cyber security recruitment more seriously. If it makes them reconsider, however, the process can only be a good thing.