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U.S. Securities and Exchange Commission

SEC Proposes Amendments to Safeguard Customer Privacy


SEC Chairman Christopher Cox speaking
Chairman Cox Discusses Customer Privacy Proposals:
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Washington, D.C., March 4, 2008 — The Securities and Exchange Commission today voted unanimously to propose amendments to Regulation S-P, which sets forth privacy obligations for entities regulated by the Commission.

To help prevent and address security breaches at the institutions the Commission regulates, the proposed amendments would provide more detailed standards for information security programs. The amendments also would provide a new exception to permit the disclosure of limited personal information when representatives move from one broker-dealer or registered investment adviser to another.

“Today’s proposal should help guard against growing problems such as identity theft and intrusions into online brokerage accounts,” said Erik Sirri, Director of the SEC’s Division of Trading & Markets. “It also includes a pragmatic exception that would continue to protect information while providing an orderly mechanism for departing representatives to take limited customer information to their new firms. This should help give firms flexibility while facilitating the transfer of accounts, promoting investor choice, and providing firms with legal certainty.”

The proposed amendments would provide more specific requirements for safeguarding information and responding to information security breaches, and update Regulation S-P’s safeguarding and disposal provisions. They also would extend the application of the disposal provisions to individuals associated with brokers, dealers, investment advisers registered with the Commission and transfer agents registered with the Commission, and would extend the application of the safeguarding provisions to registered transfer agents.

The proposed amendments also would permit a limited transfer of information without the required notice and opt out when personnel move from one broker-dealer or registered investment adviser to another.

The comment period for the proposal will end 60 days from the date of publication of the proposed rule in the Federal Register.

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The full text of the proposing release will be posted to the SEC Web site as soon as possible.



Modified: 03/04/2008