SEC Issues Cybersecurity Guidance For Registered Investment Advisers And Registered Funds

Continuing its emphasis on the importance of cybersecurity, the U.S. Securities and Exchange Commission (SEC) recently recommended measures that registered investment companies ("funds") and registered investment advisers ("advisers") may wish to consider when addressing cybersecurity risks, including:

• periodic assessments of the information collected, technologies used, security controls and processes, and governance structures;
• development of strategies, policies and procedures to prevent, detect and respond to cyber-attacks; and
• training of officers, employees, investors and clients on reducing exposure to cybersecurity threats.

In the Guidance Update, funds and advisers are advised to consider their exposure to compliance obligations under federal securities laws when assessing their exposure to cyber threats. The SEC recommends tailor-made compliance programs, based on the scope and nature of each business, that considers affiliated entities that