Counseling Clients On Managing Risk
& Meeting NYDFS Cybersecurity Standards
In an era of proliferation of increasingly sophisticated cyber threats, compliance with cybersecurity regulations is not just a legal obligation but a critical aspect of risk management. One key area of cybersecurity compliance for companies deemed “Covered Entities”1 operating in specific sectors is the New York Department of Financial Services (NYDFS) Cybersecurity Regulation.
Understanding NYDFS Cybersecurity Regulation
The NYDFS Cybersecurity Regulation (codified as 23 NYCRR 500) mandates a robust set of cybersecurity standards for financial services companies operating in New York State. This regulation requires entities to implement a comprehensive cybersecurity program designed to protect consumers and ensure the safety and soundness of New York’s financial services industry. Key requirements include developing a cybersecurity policy, conducting regular risk assessments, and implementing controls to detect and respond to cybersecurity threats.
Our NYDFS Compliance Services
- Regulatory Compliance Assessment: We conduct a thorough assessment of your current cybersecurity practices and compare them against NYDFS requirements. This gap analysis identifies areas where your program meets standards and areas needing improvement, providing a clear roadmap for achieving full compliance.
- Cybersecurity Program Development: We assist in the development and implementation of a tailored cybersecurity program that aligns with NYDFS mandates. This includes creating comprehensive policies and procedures, establishing robust controls, and ensuring your cybersecurity framework addresses all critical areas of the regulation.
- Risk Assessments and Incident Response Planning: Conducting periodic risk assessments is a cornerstone of the NYDFS regulation. We provide guidance in performing these assessments, identifying potential threats, and assessing vulnerabilities. Additionally, we help you develop and refine incident response plans to ensure swift and effective action in the event of a data breach or similar cybersecurity incident.
- Training and Awareness Programs: Employee training is crucial for maintaining cybersecurity hygiene. Our firm offers training programs designed to educate your staff on cybersecurity best practices, regulatory requirements, and their roles in maintaining compliance. This proactive approach reduces the risk of human error and enhances your overall security posture.
- Audit and Reporting Assistance: NYDFS requires regular reporting and certification of compliance. We assist in preparing and submitting required documentation, ensuring accuracy and completeness. Our team also helps you develop internal audit mechanisms to continuously monitor and verify compliance with the regulation.
- Third-Party Vendor Management: Managing third-party risks is a critical component of the NYDFS regulation. We provide guidance on conducting due diligence, drafting contractual protections such as via data processing agreements and other similar contracts, and monitoring third-party cybersecurity practices to mitigate risks associated with vendor relationships.
Benefits Of RICHT As Your Legal Counsel
At RICHT, we are squarely focused on the intersection of data, emerging areas of technology, and corresponding legal considerations. We aim to have deep sector knowledge of financial services so that we can provide seamless, informed, and effective legal advice. We do not take a one-size-fits-all approach but rather tailor our advisory to fit your specific operational environment and risk profile. By guiding clients toward a proactive risk management approach, we ensure robust privacy and cyber security frameworks that enable accounting for and mitigating risk. Beyond just counsel, our goal is to advocate on behalf of clients via RICHTPOLICY to ensure your voice is heard in the highly dynamic regulatory landscape. Fundamentally, we focus on ensuring that clients have the confidence of compliance allowing focus on business growth and success.
- “Covered Entity means any Person 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.” ↩︎
Learn How A NYDFS Cybersecurity Regulation Compliance Lawyer Can Help
NYDFS Cybersecurity Compliance News
- NYDFS offers cyber rule compliance template for small businesses: The New York State Department of Financial Services (NYDFS) issued guidance for small businesses attempting to comply with its cybersecurity regulations. New York has had rules for financial institutions regarding cybersecurity in place since 2017. The state issued amended rules in 2023 that require financial institutions to conduct risk assessments more often and improve governance.