CaseMark Managing Cybersecurity Compliance
Evaluates cybersecurity programs against SEC, FINRA, and state regulatory requirements for broker-dealers, investment advisers, and other regulated financial entities.
When To Use
- Assessing a firm's cybersecurity posture against SEC Regulation S-P, Regulation S-ID, or proposed/adopted cyber disclosure rules
- Evaluating FINRA compliance with Rules 3110 (supervision), 4370 (BCP), and cybersecurity-related notices (e.g., Regulatory Notice 21-18)
- Preparing for or responding to SEC or FINRA cybersecurity examination sweeps
- Implementing or benchmarking against NIST Cybersecurity Framework as recommended by SEC/FINRA guidance
- Reviewing state-level cybersecurity requirements (e.g., NY DFS 23 NYCRR 500, CCPA/CPRA data security obligations) [VERIFY state applicability based on firm registration and customer base]
- Responding to a cyber incident that triggers regulatory notification obligations
Inputs To Gather
- Firm profile: Registration type (BD, IA, dual), AUM/customer account volume, number of offices and employees
- Existing policies and procedures: Written information security policy (WISP), incident response plan, BCP, vendor management policy, data governance/classification policy
- Prior examination results: SEC exam deficiency letters, FINRA findings, internal audit reports related to cybersecurity
- Technical environment summary: Network architecture overview, cloud service providers, third-party vendors with access to customer data or systems
- Current framework alignment: Whether the firm has mapped controls to NIST CSF, ISO 27001, CIS Controls, or another framework
- Incident history: Prior breaches, near-misses, SARs filed related to cyber events, any Reg S-P breach notifications issued
- Regulatory correspondence: Any recent SEC or FINRA risk alerts, sweep letters, or information requests related to cybersecurity
Workflow
Map regulatory obligations
- Identify all applicable SEC rules: Reg S-P (safeguards rule), Reg S-ID (identity theft red flags), proposed cyber incident reporting rules [VERIFY current rule status—check if SEC cybersecurity disclosure rules have been finalized or amended]
- Identify FINRA obligations: supervisory procedures for cyber risk, BCP requirements addressing cyber disruption, customer notification duties
- Identify state requirements: NY DFS 500 (if applicable), state breach notification laws for each jurisdiction where customers reside [VERIFY state-by-state notification timelines and content requirements]
Assess current controls against requirements
- Evaluate governance structure: designated CISO or equivalent, board/senior management reporting cadence, cybersecurity committee or function
- Review access controls: least-privilege implementation, MFA deployment, privileged access management
- Assess data protection: encryption at rest and in transit, data loss prevention controls, customer PII inventory and classification
- Review vendor/third-party risk management: due diligence process, contractual security requirements, ongoing monitoring
- Evaluate incident response readiness: documented IR plan, defined roles and escalation paths, tabletop exercise history, regulatory notification procedures and timelines
- Check training program: content coverage (phishing, social engineering, insider threat), frequency, tracking and completion records
Perform gap analysis
- Map each regulatory requirement to specific existing controls or identify gaps
- Categorize gaps by severity: critical (direct regulatory exposure), high (material weakness), medium (best-practice shortfall), low (enhancement opportunity)
- Cross-reference against recent SEC/FINRA examination priorities and risk alerts to flag areas of heightened regulatory focus
Develop remediation roadmap
- Prioritize gaps by regulatory risk, likelihood of examination scrutiny, and implementation complexity
- Assign ownership and target completion dates for each remediation item
- Identify quick wins (policy updates, training refreshers) vs. longer-term projects (technology deployments, vendor renegotiations)
- Establish interim compensating controls for critical gaps that require extended remediation timelines
Document and report
- Produce a compliance assessment report suitable for senior management or board presentation
- Include executive summary, methodology, findings by regulatory domain, risk ratings, and remediation plan
- Attach supporting evidence matrix mapping controls to specific regulatory citations
Output
The deliverable is a Cybersecurity Compliance Assessment Report containing:
- Executive summary: Overall compliance posture rating, top risks, and priority actions
- Regulatory obligation matrix: Each applicable rule/requirement mapped to current control status (compliant, partially compliant, non-compliant, not applicable)
- Detailed findings: Organized by regulatory source (SEC, FINRA, state), each finding including the requirement citation, current state, gap description, risk rating, and recommended remediation
- Remediation roadmap: Prioritized action items with owners, timelines, resource estimates, and interim measures
- Appendices: Control evidence inventory, examination history summary, framework crosswalk (e.g., NIST CSF mapping)
Quality Checks
- Every finding cites a specific regulatory rule, guidance document, or examination priority reference
- Gap severity ratings are consistently applied using the defined categorization criteria
- Remediation recommendations are actionable (specific steps, not vague directives like "improve cybersecurity")
- State-specific requirements are flagged with [VERIFY] where jurisdiction-dependent variations exist
- Report distinguishes between binding regulatory requirements and voluntary best-practice recommendations
- Incident notification timelines are accurate for each applicable regulator and state [VERIFY current timelines—SEC, FINRA, and state requirements change frequently]
- No assumptions are made about the firm's technical environment without input data; missing information is noted as a gap in the assessment