Meeting SEC Compliance Standards

If you are a financial firm or RIA (Registered Investment Advisor), the SEC has the power to inspect your records from the moment you open your doors. They have strict regulations in place to protect your clients. Many feel trying to keep up with these regulations is like drinking water from a firehose, but failure to comply can mean going out of business or worse—fines and legal action.

While SEC compliance covers a broad range of business categories, two of the most important are cybersecurity and business continuity. Here we’ll take a look at why these should be at the top of your priority list.


According to the SEC, it’s your responsibility to protect your clients’ personal data and effectively deal with cyber threats against your IT systems. This includes having written policies in place for exactly how you intend to do that. These procedures must not only be tested and documented for effectiveness, but they must also be clearly communicated to all your employees.

Another part of SEC compliance includes keeping detailed logs of who’s accessing your system and the permissions they’ve been granted. Best practices dictate that users should only be given access to the parts of the system required to do their jobs, but sometimes even that’s not enough. If someone violates the access they’ve been granted by stealing or misusing data, then you must be able to hold them accountable.

Compliance Reporting

You must also track threats to the system as well as how they were handled. Trying to do this on your own can be an overwhelming task, which is why many companies go to experienced SEC compliance consultants for help. Implementing a SIEM (Security Information and Event Management System) is a great way to aggregate incident reports from your firewall and other security technology in one place, but you must know how to set it up to collect and report the appropriate data. An experienced IT professional can help you collect the appropriate information and generate compliance reports when it’s audit time.

Business Continuity

SEC compliance requires you to anticipate potential cybersecurity threats and have clear procedures in place for continuing business operations in the event of a cyber attack or other major disaster. Reacting after the fact is not enough.

The Six Pillars of a Good Business Continuity Plan

  1. Do a business impact analysis. It’s unlikely you’ll be able to keep every part of your business operating as normal in a crisis, so you must identify the critical business operations and processes and the resources required to support them in an emergency.
  2. Identify major threat categories. Whether it’s a cyber attack, natural disaster, or loss of a power grid, you must identify the major categories of threats and the impacts that they could have on your company. For example, are you using cloud servers to prevent downtime if you lose power? Create procedures and training for each threat category.
  3. Be proactive to mitigate risks. SEC compliance requires taking inventory of your business systems and constantly coming up with ways to improve security is a great way to stay on the offense against cyber criminals and other threats.
  4. Identify a Business Continuity leadership team. Designate a core group of leaders that as the business continuity team. They would create strategies, test plans, and conduct training to ensure everyone in the company knows their role in the event of a disaster.
  5. Create a written plan to maintain continuity. Have your readiness plans in writing and easily accessible to maintain continuity in the event of a crisis.
  6. Constantly review and update the plan. Just as your organization is constantly evolving, so are the types of threats you may face. It’s a good idea to review your plans on a regular basis and update them as needed.

Even though your plans are written, situations may arise where your team can’t get access to your building or your system temporarily. So it’s a good idea to make sure everyone is at least aware of the steps they must take in the disaster recovery efforts without having to look at the plan. It doesn’t hurt to send your team a friendly reminder to review the plan occasionally.

How Do You Keep Up with SEC Compliance?

The world we live in and the threats we face are rapidly advancing. Keeping up with SEC compliance requirements is a full-time job that your staff isn’t always equipped for. Chances are, your IT department has their hands full keeping your business running from day to day.

Partnering with SEC compliance consultants such as NIC can eliminate the stress of having to keep up with the stringent requirements for cybersecurity and business continuity. If you need help with compliance reporting, disaster recovery, or network security, contact NIC for a consultation today.

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