SEC & FINRA Compliance

Technology Compliance for Financial Services Firms

The SEC and FINRA have dramatically increased their focus on cybersecurity and technology controls. Deficiencies in these areas can derail an examination, trigger enforcement actions, and damage client relationships.

Pylon Technology’s CTO, Tim Quinn, serves as the SEC liaison for our financial clients, bringing direct regulatory expertise to your technology compliance.

Who Needs SEC & FINRA Compliance?

SEC-Regulated Entities

Registered Investment Advisers (RIAs)
Investment companies and mutual funds
Broker-dealers (dual-registered)
Transfer agents
Securities exchanges

FINRA Member Firms

Broker-dealers
Clearing firms
Introducing brokers
Correspondent firms

Key Regulations & Requirements

SEC Cybersecurity Requirements

Investment Advisers Act Rule 206(4)-7

Adopt and implement written policies and procedures
Prevent violations of the Advisers Act
Review adequacy of policies annually
Designate chief compliance officer

Regulation S-P (Privacy)

Privacy notice requirements
Opt-out provisions for nonpublic personal information
Safeguards Rule (administrative, technical, physical)
Disposal Rule for consumer information

Regulation S-ID (Identity Theft)

Identity theft prevention program
Red flags identification
Detection and response procedures
Service provider oversight

SEC Cybersecurity Guidance

Risk Alerts on cybersecurity
Examination priorities (annually)
Breach disclosure requirements
Incident response expectations

SEC Recordkeeping

Rule 17a-4 (Broker-Dealers)

Electronic recordkeeping requirements
Write Once Read Many (WORM) storage
Audit trail requirements
Retention periods (3-6 years)
Prompt production capabilities

Rule 204-2 (Investment Advisers)

Books and records requirements
Electronic communications retention
Retention periods (5 years)
Accessibility requirements
Inspection readiness

FINRA Requirements

FINRA Rule 4511 (Books and Records)

General requirements for records
Format and medium specifications
Retention and accessibility
Electronic storage conditions

FINRA Rule 3110 (Supervision)

Supervisory system requirements
Written supervisory procedures
Technology change review
Cybersecurity oversight

FINRA Cybersecurity Requirements

Report 15 (Cybersecurity)
Firm Element Training
Branch office security
Remote access security
Third-party vendor management

SOX Compliance (Public Companies)**

IT General Controls (ITGC)

Change management
Access controls
Computer operations
Program development
Segregation of duties

Our SEC & FINRA Compliance Solutions

Technology Compliance Program

Policies & Procedures

Written Information Security Policy
Business Continuity Plan
Incident Response Plan
Vendor Management Policy
Access Control Policy
Change Management procedures
Data Retention & Disposal Policy

Annual Review

Policy effectiveness assessment
Emerging threat evaluation
Technology change review
Vendor risk reassessment
Board reporting package

Cybersecurity Implementation

Access Controls

Multi-factor authentication (MFA)
Role-based access control
Privileged access management
Remote access security
Third-party access controls

Data Protection

Email encryption
File encryption
Secure file sharing
Data loss prevention
Backup and recovery
Secure disposal

Network Security

Next-generation firewall
Intrusion detection/prevention
Network segmentation
Secure WiFi
VPN for remote access

Endpoint Protection

Advanced antivirus/anti-malware
Ransomware protection
Device encryption
Mobile device management
Patch management

SEC Recordkeeping Solutions

Email Archiving

SEC Rule 17a-4 compliant archiving
Tamper-proof, non-rewriteable storage
Retention policy enforcement
eDiscovery and search capabilities
Litigation hold support

Document Management

Centralized document repository
Access controls and audit trails
Version control
Retention management
Secure disposal tracking

Communications Archiving

Microsoft Teams/Slack archiving
SMS/text message archiving
Social media archiving
Voice recording (if required)
Video conference recording

Examination Support

Pre-Examination Preparation

Document organization
Technology overview preparation
Infrastructure documentation
Compliance evidence compilation
Mock examination walkthroughs

During Examination

Tim Quinn serves as technology liaison
Document production support
Technical question response
Demonstration coordination
Follow-up documentation

Post-Examination

Deficiency remediation
Corrective action implementation
Documentation updates
Process improvements

Due Diligence Support

Institutional Investor Due Diligence

DDQ (Due Diligence Questionnaire) completion
Technology architecture overview
Security documentation package
Compliance certifications
Interview participation
Site visit coordination

Fund Administrator Reviews

Technology control documentation
SSAE 18 / SOC reports coordination
Third-party assessment support
Annual attestations

Regulatory Frameworks Supported

SEC Regulations

Investment Advisers Act (and rules)
Securities Exchange Act (and rules)
Regulation S-P (Privacy & Safeguards)
Regulation S-ID (Identity Theft)
Rule 17a-4 (Electronic Records)
Rule 204-2 (Adviser Records)

FINRA Rules

Rule 4511 (Books and Records)
Rule 3110 (Supervision)
Rule 2210 (Communications)
Rule 4370 (Business Continuity)

Other Standards

SOX (Sarbanes-Oxley)
GLBA (Gramm-Leach-Bliley Act)
State securities regulations
Industry best practices (NIST, CIS)

Common SEC Examination Findings

We help you avoid these common cybersecurity deficiencies:

Policies & Procedures

✗ Inadequate written policies
✓ Comprehensive, tested policies

Access Controls

✗ Weak or shared passwords
✓ MFA and strong authentication

Data Protection

✗ Unencrypted email and files
✓ Encryption at rest and in transit

Vendor Management

✗ No vendor risk assessment
✓ Formal vendor due diligence

Incident Response

✗ No incident response plan
✓ Tested, documented procedures

Training

✗ No cybersecurity training
✓ Annual training and testing

Testing

✗ No security testing
✓ Vulnerability scans and pen tests

Why Financial Firms Choose Pylon

SEC Examination Experience

Our CTO serves as technology liaison during SEC examinations, providing expert representation and examination support.

Regulatory Expertise

17+ years supporting RIAs and broker-dealers through successful SEC and FINRA examinations without technology deficiencies.

Due Diligence Support

We regularly participate in institutional investor due diligence, understanding exactly what investors need to see.

Proactive Compliance

We monitor SEC Risk Alerts and FINRA notices, proactively preparing clients for new regulatory expectations.

Prepare for Your Next Examination

Schedule a Free Compliance Assessment with our SEC compliance experts.

Call: (203) 930-3410 Email: info@pylontechnology.com