According to a new rule adopted by the SEC on April 10 financial firms will be required to establish identity-theft prevention programs.
This marks the first act under the SEC’s new chairman Mary Jo White. According to White “These rules are a common sense response to the growing threat of identity theft to all Americans who invest, save, or borrow money.”
Firms will need to establish programs to set up red flags to spot potential identity theft, respond to cases of identity theft and periodically update their programs. These new rules come from a requirement in the 2010 Dodd-Frank Wall Street reform law.
Although many financial firms may already have programs in place, this new rule will cover some investment advisers for the first time. These rules will go into effect 30 days after they are published in the Federal Register.