SEC proposes new privacy regulations

The Securities and Exchange Commission (SEC) has voted unanimously to propose amendments to privacy regulations.

The proposed changes would be made to Regulation S-P, which sets forth privacy obligations for entities regulated by the Commission.

The proposed amendments would provide more detailed standards for information security programs. The amendments also would provide a new exception to permit the disclosure of limited personal information when representatives move from one broker-dealer or registered investment adviser to another.

Erik Sirri, director of the SEC’s division of trading and markets, commented: “Today’s proposal should help guard against growing problems such as identity theft and intrusions into online brokerage accounts. It also includes a pragmatic exception that would continue to protect information while providing an orderly mechanism for departing representatives to take limited customer information to their new firms. This should help give firms flexibility while facilitating the transfer of accounts, promoting investor choice, and providing firms with legal certainty.”

“Today's proposal should help guard against growing problems such as identity theft and intrusions into online brokerage accounts.

Erik Sirri, director of the SEC's division of trading and markets

The proposed amendments would provide more specific requirements for safeguarding information and responding to information security breaches, and update Regulation S-P’s safeguarding and disposal provisions.

The proposed amendments would also permit a limited transfer of information without the required notice and opt out when personnel move from one broker-dealer or registered investment adviser to another.

The comment period for the proposal will end 60 days from the date of publication of the proposed rule.