Improving cybersecurity remains a top priority for the financial services industry, which has been one of the hardest hit by data breaches in recent years. However, in order to develop effective state and federal regulations, the public and private sectors will need to work together. With this in mind, SIMFA Releases Cybersecurity Principles, which are recommendations for improving cybersecurity regulation. According to the Wall Street trade organization, the recommended principles by the Securities Industry and Financial Markets Association are intended to assist regulators as they move forward with plans to review, update and harmonize their cybersecurity policies, regulations, and guidance.
SIFMA's ten principles are as follows:
- Principle 1: The U.S. Government Has a Significant Role and Responsibility in Protecting the Business Community
- Principle 2: Recognize the Value of Public-Private Collaboration in the Development of Agency Guidance
- Principle 3: Compliance with Cybersecurity Agency Guidance Must be Flexible, Scalable and Practical
- Principle 4: Financial Services Cybersecurity Guidance Should be Harmonized Across Agencies
- Principle 5: Agency Guidance Must Consider the Resources of the Firm
- Principle 6: Effective Cybersecurity Guidance is Risk-Based and Threat-Informed
- Principle 7: Financial Regulators Should Engage in Risk-Based, Value-Added Audits Instead of Checklist Reviews
- Principle 8: Crisis Response is an Essential Component to an Effective Cybersecurity Program
- Principle 9: Information Sharing is Foundational to Protection, Must Be Limited to Cybersecurity Purposes, and Must Respect Firms' Confidences
- Principle 10: The Management of Cybersecurity at Critical Third Parties is Essential for Firms
"Cybersecurity is a top priority for the financial services industry, which is dedicating significant resources to protect the integrity of the markets and the millions of Americans who use financial services every day. Effective and consistent regulatory guidance is a critical component of the broader cyber defense effort, as it promotes best practices and accountability across the financial sector," said Kenneth E. Bentsen, Jr., SIFMA president & CEO.
SIMFA’s principles reflect many of the challenges that both regulators and financial services firms will face as they tackle cybersecurity. Most notably, there cannot be a “one size fits all approach” given the variances in corporation size, resources, and risk. Yet, at the same time, the legal requirements placed on companies should be streamlined, predictable, and harmonious so as to reduce the regulatory burden.
The full text of SIFMA's "Principles for Effective Cybersecurity Guidance" can be found here: http://www.sifma.org/issues/item.aspx?id=8589951691.
If you have any questions about this post or would like to discuss the issues involved, please contact me, Fernando Pinguelo, or the Scarinci Hollenbeck attorney with whom you work. To learn more about data privacy and security, visit eWhiteHouseWatch (http://ewhwblog.com).