What is New York State’s Cybersecurity Requirements for Financial Services Companies Compliance?

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What is New York State’s Cybersecurity Requirements for Financial Services Companies Compliance?

The New York State Cybersecurity Requirements for Financial Services Companies, or 23 NYCRR Part 500, took effect March 1, 2017. Covered entities “will be required to annually prepare and submit to the superintendent a Certification of Compliance with New York State Department of Financial Services Cybersecurity Regulations.” On March 1, 2019, the two year transitional period ends and Covered Entities are required to be in compliance with the requirements of 23 NYCRR 500.11.

Regulation Summary

New York State’s Department of Financial Services Cybersecurity Requirements for Financial Services Companies regulation:

Is designed to promote the protection of customer information as well as the information technology systems of regulated entities. This regulation requires each company to assess its specific risk profile and design a program that addresses its risks in a robust fashion. Senior management must take this issue seriously and be responsible for the organization’s cybersecurity program and file an annual certification confirming compliance with these regulations. A regulated entity’s cybersecurity program must ensure the safety and soundness of the institution and protect its customers.

It is critical for all regulated institutions that have not yet done so to move swiftly and urgently to adopt a cybersecurity program and for all regulated entities to be subject to minimum standards with respect to their programs. The number of cyber events has been steadily increasing and estimates of potential risk to our financial services industry are stark. Adoption of the program outlined in these regulations is a priority for New York State.1

We excerpt below specific Sections of 23 NYCRR Part 500 with which Thales eSecurity can help your organization comply:

Section 500.06 Audit Trail

Each covered entity shall … include audit trails designed to detect and respond to Cybersecurity Events that have a reasonable likelihood of materially harming any material part of the normal operations of the Covered Entity.

Section 500.07 Access Privileges

As part of its cybersecurity program, based on the Covered Entity’s Risk Assessment each Covered Entity shall limit user access privileges to Information Systems that provide access to Nonpublic Information and shall periodically review such access privileges.

Section 500.08 Application Security

Each Covered Entity’s cybersecurity program shall include written procedures, guidelines and standards designed to ensure the use of secure development practices for in-house developed applications utilized by the Covered Entity, and procedures for evaluating, assessing or testing the security of externally developed applications utilized by the Covered Entity within the context of the Covered Entity’s technology environment.

Section 500.11 Third Party Service Provider Security Policy

Each Covered Entity shall implement written policies and procedures designed to ensure the security of Information Systems and Nonpublic Information that are accessible to, or held by, Third Party Service Providers.

Section 500.14 Training and Monitoring

As part of its cybersecurity program, each Covered Entity shall … implement risk-based policies, procedures and controls designed to monitor the activity of Authorized Users and detect unauthorized access or use of, or tampering with, Nonpublic Information by such Authorized Users….

Section 500.15 Encryption of Nonpublic Information

As part of its cybersecurity program, based on its Risk Assessment, each Covered Entity shall implement controls, including encryption, to protect Nonpublic Information held or transmitted by the Covered Entity both in transit over external networks and at rest.

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1https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/Cybersecurity_Requirements_Financial_Services_23NYCRR500.pdf