The threat of a data breach has reached all industry sectors in the last decade. In the financial sector alone, there were 1,368 confirmed data breaches in 2015 with confirmed data loss in 795 of those breaches.1 While 47 states have implemented some form of a data breach notification law, these primarily reactive laws focus on post-breach requirements such as notification to customers and the provision of credit monitoring services. New York is attempting to create a more proactive regime.
In September 2016, the New York Department of Financial Services (NYDFS) proposed “Cybersecurity Requirements for Financial Services Companies” (the Requirements). Following a 45-day notice and comment period, the regulation is set to become effective on Jan. 1, 2017. The proposal would proactively require “Covered Entities” and third parties to enact a uniform, structured set of minimum cybersecurity requirements, eschewing typical state and federal statutory language that requires an entity merely to enact “reasonable policies and procedures.”
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