Effective March 1st of this year, the New York Department of Financial Services introduced one of the harshest cybersecurity regulations to hit companies in the U.S. – 23 NYCRR Part 500 aka the Cybersecurity Requirements for Financial Services Companies, a regulation designed to tighten cybersecurity practices across a wide selection of companies. Five other states are also set to introduce similar regulations including Hawaii, Illinois, New Mexico, Texas, and North Dakota. Announcements from those states are expected over the next couple of weeks.
23 NYCRR Part 500 covers anyone “operating under or required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the Banking Law, the Insurance Law or the Financial Services Law.” In practice, this includes banks, investment firms, insurers and licensed lenders, holding companies, charities, and service contractors. Mark Sangster, VP and Industry Security Strategist at cyber security company eSentire commented below.
Mark Sangster, VP and Industry Security Strategist at Cyber Security Company eSentire:
“These organizations should all be watching this regulation and preparing themselves for compliance. The rules are highly prescriptive, going into substantial detail about the cybersecurity requirements for covered entities, and imposing significant reporting requirements on those companies. This increase in cybersecurity reporting requirements removes any chance of plausible deniability for companies covered by the rule. It defines a cybersecurity event as any event that another regulator would deem reportable. The blanket coverage means that a company cannot claim ignorance of reporting standards as an excuse for not reporting an event.”