23 NYCRR 500
NYDFS regulation for financial cybersecurity programs
U.S. SEC Cybersecurity Rules
U.S. SEC regulation for cybersecurity incident and governance disclosure
Quick Verdict
23 NYCRR 500 mandates operational cybersecurity for NY financial firms with controls and 72-hour reporting, while SEC rules require public companies to disclose material incidents in 4 days and annual governance. NYDFS ensures resilience; SEC provides investor transparency.
23 NYCRR 500
23 NYCRR Part 500 Cybersecurity Regulation
Key Features
- Periodic documented risk assessments as foundation
- Mandatory CISO with annual board reporting
- 72-hour cybersecurity incident notification
- Third-party service provider security policy
- Annual senior leadership compliance certification
U.S. SEC Cybersecurity Rules
Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure
Key Features
- Four-business-day material incident disclosure on Form 8-K
- Annual risk management and governance in Regulation S-K Item 106
- Inline XBRL tagging for structured comparability
- Board oversight and management role disclosures
- Third-party incidents included in scope
Detailed Analysis
A comprehensive look at the specific requirements, scope, and impact of each standard.
23 NYCRR 500 Details
What It Is
23 NYCRR Part 500 is the New York Department of Financial Services (NYDFS) regulation establishing minimum cybersecurity standards for Covered Entities. Effective March 1, 2017, with amendments in 2020 and 2023, it adopts a risk-based approach to protect Information Systems and Nonpublic Information (NPI) in banking, insurance, and financial services.
Key Components
Structured across 14+ sections, it mandates seven pillars: governance, risk assessment, policies, controls, monitoring/testing, third-party management, and incident response. Core elements include CISO designation (§500.4), Risk Assessment (§500.9), MFA (§500.12), encryption (§500.15), penetration testing (§500.5), and 72-hour notifications (§500.17). Compliance via annual April 15 certification; limited exemptions for small entities.
Why Organizations Use It
Mandatory for NYDFS licensees to ensure safety/soundness, protect customers, and mitigate cyber threats. Benefits include reduced incident risk, enforcement avoidance (e.g., multimillion fines), enhanced resilience, and alignment with frameworks like NIST CSF. Builds stakeholder trust and competitive edge in financial services.
Implementation Overview
Phased rollout: gap analysis, Risk Assessment, policy development, controls deployment (MFA, encryption), testing, third-party due diligence. Applies to all sizes of Covered Entities (banks, insurers); Class A face enhanced rules. No external certification but NYDFS examinations and five-year record retention required. (178 words)
U.S. SEC Cybersecurity Rules Details
What It Is
U.S. SEC Cybersecurity Rules (Release No. 33-11216) are federal regulations mandating standardized disclosures for public companies. This regulation targets Exchange Act registrants, requiring timely reporting of material cybersecurity incidents and periodic updates on risk management, strategy, and governance. It employs a risk-based materiality approach anchored in securities law principles.
Key Components
- Incident disclosure Form 8-K Item 1.05 within four business days of materiality determination.
- Periodic disclosures Regulation S-K Item 106 in Form 10-K on processes, governance, and impacts.
- Inline XBRL tagging for structured data.
- Built on existing guidance (2011, 2018); no fixed controls, focuses on processes and oversight. Compliance via self-reporting with SEC enforcement.
Why Organizations Use It
Enhances investor protection through timely, comparable information. Meets legal obligations for public filers, mitigates enforcement risks (e.g., fines like Yahoo's $35M). Improves risk management via integrated disclosure controls, boosts stakeholder trust, and supports capital efficiency.
Implementation Overview
Phased approach: gap analysis, playbook development, cross-functional training. Applies to domestic/foreign public issuers; no certification but SEC exams/enforcement. Key activities: materiality frameworks, IRP updates, third-party contracts, tabletop exercises. (~178 words)
Key Differences
| Aspect | 23 NYCRR 500 | U.S. SEC Cybersecurity Rules |
|---|---|---|
| Scope | Operational cybersecurity program, controls, incident response | Disclosure of incidents, governance, risk management |
| Industry | NY financial services (banks, insurers) | All public companies (Exchange Act registrants) |
| Nature | Mandatory operational regulation with penalties | Mandatory disclosure rules for investors |
| Testing | Annual pen testing, bi-annual vulnerability scans | No specific testing; governance disclosure only |
| Penalties | Consent orders, multimillion-dollar fines | SEC enforcement, civil penalties for misdisclosure |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about 23 NYCRR 500 and U.S. SEC Cybersecurity Rules
23 NYCRR 500 FAQ
U.S. SEC Cybersecurity Rules FAQ
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