November 20, 2013

Happy (Red) Flag Day

Beginning today, RIA firms, broker dealers and other financial institutions that are subject to the new identify theft prevention ("Red Flag") rules must implement policies and procedures to prevent, detect and respond to any instances of possible identity theft among their clients.

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”) amended certain parts of the Fair Credit Reporting Act (“FCRA”) and transferred authority over certain parts of the FCRA to the SEC and CFTC for entities they regulate. Section 615(e)(1)(A) and (B) of the FCRA, as amended by the Dodd Frank Act, required that the SEC and CFTC jointly establish and maintain guidelines for financial institutions and creditors regarding identity theft and prescribe rules requiring such institutions and creditors to establish such reasonable policies and procedures for the implementation of those guidelines.

Accordingly, on April 19, 2013, the SEC and the CFTC jointly issued identity theft red flag rules, Regulation S-ID (“Reg S-ID” or the “Rule”) . Reg S-ID requires certain financial institutions to establish an identity theft red flags program designed to detect, prevent, and mitigate identity theft. The effective date of the Rule was May 20, 2013.

AdvisorAssist has prepared a white paper that provides an overview of how RIA firms can implement these new policies and procedures.

Click here to request a copy.


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