WASHINGTON, D.C.—Legal Director and Securities Specialist Stephen Hall issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission (SEC) in response to the agency’s proposed rule to bolster protections for customer information and require notice to individuals affected by a data breach at financial institutions:
“It is unacceptable that today market participants are not required by the securities laws to tell Americans when their personal information has been stolen. The American people should know about breaches as soon as possible. Otherwise, they may be victimized twice: once when a breach that exposes their information occurs, and again when bad actors use the information to steal their identity, drain their back accounts, run up their credit cards, or steal their investments.
“To that end, the SEC has rightly proposed a rule that requires market participants to notify affected individuals. Notification can make the difference between identity theft that inflicts major financial losses and a swift response that results in minimal harm. Rapid and robust breach notification requirements empower individuals to proactively limit the very real and harmful effects of a breach. They can sign up with credit monitoring services, lock their credit reports, and cancel their credit cards. With respect to breaches at financial institutions specifically, they can open new bank or investment accounts and monitor their financial accounts vigilantly.
“That’s what the SEC’s proposed rule does: requires financial firms to notify breach victims so that they can take prompt action to protect themselves from the potential consequences. We urge the SEC to finalize the proposal without weakening any of its elements. In addition to the breach notification requirement, we support the proposal’s extension of the requirements to safeguard customer information to transfer agents as well as the broad definition of the types of customer information that market participants must protect. And our comment letter flags some necessary improvements that the Commission should make to the proposal to strengthen and shorten the notification process. The need to safeguard customer information should be uncontroversial. The Commission’s proposed enhancements would benefit both market participants and the customers they serve by requiring firms to guard against the risks that data breaches pose and respond to them appropriately when they do occur.”
Read our full comment letter here.
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.