NASAA Cautions Investment Advisers To Improve Cybersecurity

In its Annual Report on state-registered investment advisers regulatory compliance, the North American Securities Administrators Association ("NASAA") found that cybersecurity deficiencies are on the rise.

Generally, NASAA found that compliance deficiencies have decreased. According to NASAA, the top five cybersecurity-related deficiencies include:

• no testing of cybersecurity vulnerability;
• lack of procedures regarding securing or limiting access to devices;
• lack of procedures related to internet connectivity;
• weak or infrequently changed passwords; and
• no or inadequate cybersecurity insurance.

NASAA also highlighted a new model rule that would require advisers to improve their cybersecurity and privacy practices. In addition, NASAA encouraged firms to review NASAA's Cybersecurity Checklist and related guidance.