Risk Management Update Profile – Federal and State Regulations Governing Investment Adviser Privacy Safeguards

At the end of each month, Core Compliance & Legal Services, Inc. (“Core Compliance”) publishes a Risk Management Update (RMU), an in-depth article written by one of our staff members on a currently relevant topic in compliance, securities, and investment industry. In late November 2013, Core Compliance released an RMU, written by Tina Mitchell, which details current privacy safeguards on the federal and state level for investment advisers, the Securities and Exchange Commission (SEC)’s Regulation S-P, Regulation S-AM and Regulation S-ID, among others.

Under the SEC’s Regulation S-P – Privacy of Consumer Information measure instituted in November 2000, broker-dealers, investment advisers, and other financial institutions are required, in part, to provide a written Privacy Notice to clients on an initial and annual basis. The RMU discusses the “model” form of the Privacy Notice issued by the regulators, which provides a “safe harbor” if used in accordance with written instructions, as well as other regulations and their requirements like Regulation S-AM – Limitations on Affiliate Marketing, and Regulation S-ID – Identity Theft Red Flags Rule, all which must be adhered to on a federal-registration level. For state-registered investment advisers, however, the Federal Trade Commission’s (FTC’s) “Privacy of Consumer Information” rule, as well as individual state privacy regulations, must be complied with. Mitchell further details such pertinent issues as state security breach laws and identity theft programs, while also providing a list of “practical tips” for firms to follow to remain compliant with privacy laws and regulations.

To read a PDF of the article “Federal and State Regulations Governing Investment Adviser Privacy Safeguards,” please click here. To browse our RMU library, including insightful articles on a wide range of industry topics, please click here.

For more information, or for assistance on other compliance topics, please contact us at (619) 278-0020 to schedule a consultation. 

GENERAL DISCLAIMER: Information contained within this blog does not create a business-client relationship, and none of the content of this blog can be deemed to be consultive business advice.

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