Let’s be real for a second, running a company of any size is a tedious and exhausting job. You are busy, your team is busy, and we get that. Unfortunately, being busy and focused on the task at hand is no excuse for letting your company slip through the cracks when it comes to cybersecurity compliance. This is especially true for asset management firms.


Importance of Being Cyber Compliant:

Due to the high volume of Personally Identifiable Information (PII) stored within firms, it is important to realize how at-risk asset management companies are for breaches such as cybersecurity attacks. Furthermore, any information about the company which can be hacked creates exposure which can cause result in embarrassment and financial loss for their clients and cost the firm their reputation.


As the frequency of cybersecurity attacks continues to grow and evolve, it increases the potential risk for investors, firms, and markets-which is why cybersecurity has become a major point of focus for the SEC and FINRA.


How Are Asset Management Firms Regulated?


Asset management firms are regulated by two main agencies:


The SEC and FINRA somewhat overlap on their rules and regulations regarding compliance for asset management firms, however making sure that your company is compliant with both the SEC and FINRA will ensure that your company and the clients within your company are protected. Failure to comply with the SEC and FINRA regulations will result in a violation, which can cost the firm an excess of money. Asset management firms are subject to be audited by both firms without notice, which means even if you fall out of compliance for 24 hours, there is still a possibility that you can be audited in that time window and face a violation. This is where the term “best to be safe, not sorry” really holds true.   


Here are a few of FINRA’s regulations regarding cybersecurity are listed below:

  • Regulation S-P, requires firms to adopt written policies and procedures to protect customer information against cyber-attacks and other forms of unauthorized access
  • Regulation S-ID, outlines a firm’s duties regarding the detection, prevention, and mitigation of identity theft
  • The Securities Exchange Act of 1934, requires firms to preserve electronically stored records in a non-rewriteable, non-erasable format


How do I stay compliant?

The best way to keep your asset management firm compliant on not only cybersecurity compliance, but for overall protection is to find a trustworthy and efficient business continuity solution. There are hundreds of options, including Preparis. Here at Preparis our goal is to ensure that our customers have an all-in-one business continuity solution that allows you to be able to stay compliant on everything from cybersecurity to emergency messaging. If you have an interest in reading more how Preparis can help your asset management firm, click here to check out our webpage dedicated to asset management compliance.

Click here to download the Preparis Audit Ready Package Brochure

Click here to register for the Compliance Management for Asset Management Webinar