Skip to main content

Customer Information Protection

Protection of financial and personal customer information is a key responsibility and obligation of FINRA member firms. Under the SEC’s Regulation S-P, firms are required to have policies and procedures addressing the protection of customer information and records. This includes protecting against any anticipated threats or hazards to the security or integrity of customer records and information and against unauthorized access to or use of customer records or information.  The rule also requires firms to provide initial and annual privacy notices to customers describing information sharing policies and informing customers of their rights.

Additionally, Regulation S-ID requires member firms that offer or maintain covered accounts to develop and implement written identity theft prevention programs.

Firms should be aware that customer information and records can be compromised in a variety of ways. This is especially true for firms that offer online, Web-based access to trading platforms and customer account information. Firms must understand and address the potential risks of brokerage account intrusions, whereby an unauthorized person gains access to a customer account and either steals available assets or misuses the account to manipulate the market.

Intrusions are generally accomplished through the theft of the login credentials of a customer or firm employee.  Accounts have also been breached through fake electronic instructions (e.g., email requests for funds transmittals).  Since this type of illicit activity can raise both investor protection and market integrity concerns, it is essential that firms use reasonable measures to protect customer information and assets. FINRA Rule 3110 specifically requires firms to adopt procedures concerning transmittals of customer funds that include a means of customer confirmation.


If a Customer's Account or Data is Compromised

  • Contact your FINRA Coordinator and the SEC immediately.
  • Review this Checklist to determine next steps.
  • You may need to contact state and other relevant regulatory authorities.  State laws may require specific reporting procedures
  • Consider whether or not the incident should be reported to FinCEN as a suspicious activity.

Contact OGC

FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see Interpreting the Rules for more information.

OGC staff contact:
Carrie Jordan
FINRA, OGC
Brookfield Place
200 Liberty Street
New York, NY 10281
(212) 858-4210

Related: Cybersecurity

  • Distributed Denial of Service (DDoS) Attacks on Member Firms
    06/19/2015
  • SEC Approves New Supervision Rules
    03/19/2014
  • SEC Requests Broker-Dealers Make SARs and SAR Information Available to FINRA
    02/10/2012
  • Verification of Emailed Instructions to Transmit or Withdraw Assets From Customer Accounts
    01/26/2012
  • Verification of Instructions to Transmit or Withdraw Assets from Customer Accounts
    11/13/2009
  • FINRA Clarifies Guidance Relating to SEC Regulation S-P under Notice to Members 07-06 (Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable Products)
    08/13/2007
  • SEC Approves Rule 2342 Setting Forth Requirements for Providing SIPC Information to Customers
    06/08/2007
  • NASD Reminds Members of Their Obligations Relating to the Protection of Customer Information
    07/28/2005
  • Members' Responsibilities When Outsourcing Activities to Third-Party Service Providers
    07/22/2005
  • Treasury Issues Final Suspicious Activity Reporting Rule for Broker/Dealers
    08/12/2002
  • Guidance
    The Anti-Money Laundering, Fraud and Sanctions topic of the 2024 FINRA Annual Regulatory Oversight Report (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
    January 09, 2024
  • Guidance
    The Cybersecurity and Technology Management topic of the 2024 FINRA Annual Regulatory Oversight Report (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
    January 09, 2024
  • Guidance
    FINRA poses several questions for firms to consider as they evaluate whether their supervisory systems are reasonably designed to address risks of their SPAC-related activities. These questions are based on FINRA’s observations to this point in our review. In addition, the Appendix notes additional guidance FINRA has provided regarding member firms’ relevant obligations.
    October 02, 2023
  • Guidance
    This follow-up to the September 2021 targeted exam (sweep) of firms’ practices related to their acquisition of customers through social media channels and their sharing of customers’ usage information with affiliates and non-affiliated third parties summarizes selected practices FINRA has observed firms implement to this point in the sweep.
    February 28, 2023
  • Guidance
    FINRA is conducting an assessment of firms’ approaches to managing cyber-security threats. FINRA is conducting this assessment in light of the critical role information technology (IT) plays in the securities industry, the increasing threat to firms’ IT systems from a variety of sources, and the potential harm to investors, firms, and the financial system as a whole that these threats pose.
    January 01, 2014
  • Compliance Tools
    What should your firm do after it discovers that customers’ accounts have been compromised?
  • Guidance
    FINRA has created this page to educate member firms on “Firm Identity Theft”.
  • Guidance
    The Red Flags Rule requires that each "financial institution" or "creditor" --which include most member firms--implement a written program to detect, prevent and mitigate identity theft in connection with the opening or maintenance of "covered accounts."
  • Investor Education
    Phishing scams typically involve emails that falsely claim to be from a financial institution, credit card company or other familiar organization or service. Most of these emails attempt to lure you into providing sensitive personal information by requesting that you reply to the email or click on a link that mimics a legitimate website.