Compliance Newsflash – June 6, 2019

June 6, 2019

Safeguarding Customer Records and Information in Network Storage –  Use of Third Party Security Features 

On May 23, 2019, the Securities and Exchange Commission’s (SEC) reported that during recent examinations, the Office of Compliance Inspections and Examinations (“OCIE”)∗ identified security risks associated with the storage of electronic customer records and information by broker-dealers and investment advisers in various network storage solutions, including those leveraging cloud-based storage.1  Although the majority of these network storage solutions offered encryption, password protection, and other security features designed to prevent unauthorized access, examiners observed that firms did not always use the available security features.  Weak or misconfigured security settings on a network storage device could result in unauthorized access to information stored on the device. 

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Statement at the Open Meeting on Commission Actions to Enhance and Clarify the Obligations Financial Professionals Owe to our Main Street Investors

On June 5, 2019, Securities and Exchange Commission’s (SEC) Chairman Jay Clayton  stated, “I am going to begin with some historical perspective. Just two days ago, on Monday evening, we celebrated the 85th anniversary of the Commission. The overriding issue we address today-the obligations of financial professionals when they provide investment advice and services to retail customers-has been at the heart of our mission for those 85 years. This is a vast, multifaceted, complex and critically important facet of our economy and our society. It directly affects 43 million American households.

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