CFTC Issues Recommended Best Practices For Security Of Financial Information

Article by Timothy J. Nagle and Phillip G. Lookadoo, and Christopher Fatherly.

Last week, the Staff of the Commodity Futures Trading Commission (CFTC) issued Staff Advisory 14-21 on the subject of "Gramm-Leach-Bliley Act Security Safeguards." The CFTC had issued guidance previously in Part 160 of the CFTC's regulations on "Privacy of Consumer Financial Information" (April 27, 2001). Swap Dealers (SDs) and Major Swap Participants (MSPs) were added to those Part 160 regulatory obligations by the CFTC on July 22, 2011. The fact that the Commission "at this time...believes it important to outline recommended best practices for covered financial institutions" is noteworthy, especially in light of its overburdened staff which has focused on other issues such as electronic or automated trading. It demonstrates that cybersecurity is a significant issue in the financial industry and that the CFTC wants to be relevant to and actively participate in the discussion of