Alert March 11, 2008

SEC Proposes Expansion of Privacy Regulation

The SEC issued proposed amendments to Regulation S-P to address identity theft of securities industry customers. The proposal contains five amendments, which (1) create more specific standards under the safeguards rule of Regulation S-P, including physical, technical and administrative safeguards, and written policies, (2) introduce a breach notice requirement; (3) broaden the type of information and persons covered by the SEC safeguards and information disposal rules; (4) create record-keeping requirements for policies and procedures to comply with the proposed regulation, as well as documentation of compliance; and (5) create a new exception allowing a broker who is changing firms to take limited personal information to the new firm in order to maintain relationships with clients. Click here for a copy of the proposal.