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By: Proskauer

On September 15, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) issued a Risk Alert announcing its second round of examinations of registered investment advisers and broker-dealers under its cybersecurity examination initiative.

The OCIE's cybersecurity examination initiative was launched in April 2014 to assess cybersecurity preparedness in the securities industry and gather information on common practices and trends among registered firms. In its first round of examinations, the OCIE interviewed key personnel and reviewed documents of over 100 registered investment advisers and registered broker-dealers. Findings from this first round of examinations were released in February 2015. Whereas the first round of examinations consisted primarily of interviews and document reviews, the OCIE expects that the second round of examinations will involve more testing to assess implementation of a firm's procedures and controls. The examinations are expected to focus on the following key areas:

• Governance and Risk Assessment. The OCIE may assess whether the firm has cybersecurity governance and risk assessment processes on the key areas listed below, whether the firm is periodically evaluating its cybersecurity risks and whether the firm's controls and processes are tailored to its business. In addition, the OCIE may review the level of communication to, and involveme......................

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