Tag Archives: Kristin Snyder

30 Days to Form ADV: Have You Reviewed Your AI Disclosures?

by Charu Chandrasekhar, Avi Gesser, Kristin Snyder, Julie M. Riewe, Marc Ponchione, Matt Kelly, Sheena Paul, Mengyi Xu, and Ned Terrace

Photos authors

Top left to right: Charu Chandrasekhar, Avi Gesser, Kristin Snyder, Julie M. Riewe, and Marc Ponchione.
Bottom left to right: Matt Kelly, Sheena Paul, Mengyi Xu, and Ned Terrace. (Photos courtesy of Debevoise & Plimpton LLP)

Registered investment advisers (“RIAs”) have swiftly embraced AI for investment strategy, market research, portfolio management, trading, risk management, and operations. In response to the exploding use of AI across the securities markets, Chair Gensler of the Securities and Exchange Commission (“SEC”) has declared that he plans to prioritize securities fraud in connection with AI disclosures and warned market participants against “AI washing.” Chair Gensler’s statements reflect the SEC’s sharpening scrutiny of AI usage by registrants. The SEC’s Division of Examinations included AI as one of its 2024 examination priorities, and also launched a widespread AI sweep of RIAs focused on AI in connection with advertising, disclosures, investment decisions, and marketing. The SEC previously charged an RIA in connection with misleading Form ADV Part 2A disclosures regarding the risks associated with its use of an AI-based trading tool.

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Lessons from The Financial Stability Board’s Report on Cyber Incident Reporting

by Luke Dembosky, Avi Gesser, Erez Liebermann, Kristin Snyder, Charu A. Chandrasekhar, and Tristan Lockwood

Photos of the authors

From left to right: Luke Dembosky, Avi Gesser, Erez Liebermann, Kristin Snyder, Charu A. Chandrasekhar, and Tristan Lockwood (Photos courtesy of Debevoise & Plimpton LLP)

Big businesses, especially those with a global footprint and operating in regulated sectors, are increasingly confronted with new and diverging cyber incident reporting requirements. A single incident—even a relatively minor one—may require notification to dozens of data protection, cyber, law enforcement, and sectoral regulators around the world, in addition to insurers, customers, and counterparties. Not only do many regulatory reporting obligations have materially different triggers, but also significant variation exists in reporting timeframes, content requirements, and subsequent regulatory engagement practices. The cumulative effect of this regulatory spiderweb of red tape is often to divert attention and resources away from substantive incident response and remediation, and to create a bureaucratic vortex for compliance and legal personnel.  To make matters worse, businesses cannot simply hire their way out of this morass. With a ~3.4 million person shortage in information security professionals, when regulators force too much attention on incident reporting they are invariably diverting eyes from actual information security.

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A Late Winter Blizzard of SEC Cybersecurity Rulemaking: the Proposed BD Cybersecurity Rules and Expanded Reg S-P and Reg SCI Obligations

by Luke Dembosky, Avi Gesser, Erez Liebermann, Marc Ponchione, Julie M. Riewe, Jeff Robins, Kristin Snyder, Charu A. Chandrasekhar, Sheena Paul, Suchita Brundage, Michael R. Roberts, Mengyi Xu, and Ned Terrace

Photos of the authors

Top row from left to right: Luke Dembosky, Avi Gesser, Erez Liebermann, Marc Ponchione, Julie M. Riewe, and Jeff Robins.
Bottom row from left to right: Kristin Snyder, Charu A. Chandrasekhar, Sheena Paul, Suchita Brundage, Michael R. Roberts, and Mengyi Xu.
(Photos courtesy of Debevoise & Plimpton LLP)

On March 15, 2023, the U.S. Securities and Exchange Commission (the “SEC”) released a suite of proposed new rules (the “Proposed Rules”) that include:

  • Proposed new cybersecurity rules for broker-dealers, security-based swap dealers, major security-based swap participants, transfer agents, a variety of market infrastructure providers (national securities exchanges, clearing agencies, and security-based swap data repositories), and securities SROs (collectively, “Market Entities”) that would impose new policies and procedures requirements and incident notification obligations (“BD Cyber Proposal”);
  • Amendments to Regulation S-P (“Reg S-P”) that would require the implementation of an incident response program, including a new customer notification obligation; expand the scope of the existing requirements relating to the safeguarding of “customer” information and the disposal of “consumer” information relating to individuals (the “Safeguards and Disposal Rules”); and impose new recordkeeping requirements (“Reg S-P Proposal”); and
  • Amendments to Regulation SCI (“Reg SCI”) to expand the scope of covered entities to cover certain broker-dealers without an ATS and security-based swap data repositories and to update requirements relating to policies and procedures, incident notification, and other compliance obligations (“Reg SCI Proposal”).

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