Securities, Futures Regulators Increase Scrutiny, Expectations on Cybersecurity

Financial regulators are emphasizing the risk poor cybersecurity poses to market integrity and financial stability, and elaborating on policies and controls they expect the firms they oversee to have in place. Investment managers’ responsibility for cybersecurity has grown like compound returns. The SEC’s Office of Compliance Inspections and Examinations disclosed that its examination staff would be testing investment advisers to assess cybersecurity procedures and controls, and the National Futures Association proposed an interpretive notice expressly bringing cybersecurity within the supervisory obligations of commodity futures advisers. In this guest commentary for Bloomberg Brief Financial Regulation, SRZ partners Marc E. Elovitz and Holly H. Weiss, former SRZ partners Robert R. Kiesel and Brian T. Daly and former SRZ attorneys Jacob Preiserowicz and Michael L. Yaeger discuss the steps that investment managers should take to ensure they comply with the guidance provided by the OCIE and NFA.