14.3 Cybersecurity and Privacy
Protecting sensitive customer records from identity theft and unauthorized disclosure is a core operational requirement for all broker-dealers and registered advisers.
Key NASAA Exam Takeaways
- Regulation S-P mandates safeguarding customer non-public personal financial information (NPI).
- Initial Privacy Notice must be delivered at or prior to opening an account; Annual Privacy Notices are required unless specific third-party sharing conditions are met.
- Opt-Out Requirement: Clients must be given a reasonable, easy method to opt-out of information sharing with non-affiliated third parties (e.g., prepaid postcard, toll-free number, online click).
- Disposal Rule requires secure shredding, burning, or electronic wiping of consumer financial records.
Knowledge Checkpoint • Section 14.3
Under SEC Regulation S-P, which of the following opt-out mechanisms provided to a client wishing to prevent non-affiliated third-party information sharing is considered UNREASONABLE?