A new cybersecurity regulatory regime will go into effect this year in New York – the world’s financial capital and home to many banking, insurance and financial services organizations. The proposed cybersecurity regulation, known as 23 NYCRR 500, has grabbed the attention of impacted companies doing business in New York, and others who might be anticipating cybersecurity requirements in their jurisdictions and industries.
New York Governor Andrew Cuomo announced the new "first-in-the-nation" cybersecurity regulation in September 2016, saying it is necessary to "guarantee the financial services industry upholds its obligation to protect consumers and ensure that its systems are sufficiently constructed to prevent cyber-attacks to the fullest extent possible." The proposed regulation is currently being reviewed by the DFS to take into account comments by the banking industry.
You may be wondering what the regulation says and how to comply. We put together this brief FAQ to help you understand whether and how this regulation affects your organization, what the regulation covers from a security standpoint, and what protections you should consider to meet compliance requirements. Although this doesn’t constitute legal advice, we hope this FAQ helps you begin the process of planning your next steps for compliance.
The new cybersecurity regulation proposed by the New York State Department of Financial Services (DFS) is officially known as Part 500 of Title 23 of the Official Compilation of Codes, Rules and Regulations of the State of New York, or 23 NYCRR 500 for short.
The DFS is the regulatory body that oversees financial services companies licensed by or operating in New York State. Organizations covered by the new cybersecurity regulation include banks and trust companies, insurance companies, mortgage lenders, investment companies, brokers and other financial services providers. There are some exemptions for some smaller organizations.
Once it is final, the regulation is scheduled to go into effect on March 1, 2017. As originally proposed, there is a 180-day grace period for companies to comply. A further requirement to provide a Certification of Compliance to the DFS commence will commence in January 2018.
The proposed regulation includes a comprehensive list of requirements for protecting information systems from cybersecurity threats and unauthorized access of “non-public information.” Below is a partial list of some of the main requirements.
Covered entities must:
Strategic organizations understand that they cannot treat compliance as an end in itself, but as the outcome of an ongoing process. The Veracode Application Security Platform provides a variety of methods to assess application security, compliance and development team reporting, and secure development training. Veracode helps deliver continuous compliance by:
Below are some possible security solutions you should consider when assessing your risk and compliance requirements.
You should check with your compliance and legal departments for complete information on how you may be required to comply.
View our new guide for continued learning: Navigating the New York Department of Financial Services' Cybersecurity Regulations