The New York State Department of Financial Services (DFS) received numerous comments on its proposed Cybersecurity Requirements for Financial Services Companies (Initial Regulations) and, on Dec. 28, 2016, issued updates to the Initial Regulations (Amended Regulations).1 The Amended Regulations resolve certain issues, but key questions remain. This article explains why the changes in the Amended Regulations are important to “Covered Entities,” and identifies important questions that still need to be resolved.
Initial and Amended Regulations
Both the Initial and Amended Regulations (together, the DFS Regulations) are significantly broader and more prescriptive than any existing cybersecurity regulations. Existing regulations protect personal information about individual natural persons, while the DFS Regulations also regulate non-personal business information.2 This is a big expansion. The DFS Regulations also mandate penetration testing and require that data incidents be reported to DFS within 72 hours.3 In addition to these new requirements, the Initial Regulations contained significant ambiguities and left key questions unanswered. The Initial Regulations were set to become effective on Jan. 1, 2017.4
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