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The Colorado Division of Securities has updated and streamlined rules that are set to take effect on Monday, July 17, 2017.
The Division is incorporating a rule concerning cybersecurity that firms must now consider. The rule outlines new requirements for broker-dealers and investment advisers to adopt reasonable policies to protect information stored electronically, including their client’s personal information. Firms must conduct routine risk assessments to determine the possibility of damage to business and client accounts, and must identify methods for preventing and/or address any security breaches.
Another rule that will take effect creates a requirement for succession planning that is particularly important for small or individual firms. With the provisions of the new rule, firms will be required to write and maintain procedures related to business continuity and succession. Plans should include items such as protections for books and records, alternate means of communication with clients, assignment of duties, and ways to minimize service disruptions and client harm in the event that an adviser or broker dies, is injured, or falls ill.