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News December 13, 2004 Issue

SEC Finalizes Disposal and Safeguarding Rules

The SEC has published the final version of the new Reg. S-P "disposal rule," as well as final amendments to the existing Reg. S-P "safeguard rule." As a result, there are two more items to add to your compliance to-do list:

  • Determine whether your firm is subject to the disposal rule, and if so, adopt disposal procedures by July 1, 2005.
  • Make sure that you’ve memorialized your safeguarding procedures (required under Reg. S-P since 2000) in writing by July 1, 2005.

In response to concerns raised by the ICAA and others, the SEC clarified that the term "consumer report information," as used in the disposal rule, does not include information that not identifying individuals (i.e., aggregate information or blind data). The SEC also noted that advisers may obtain a client’s consumer information in connection with providing financial planning services. (More on these topics in an upcoming IM Insight article.)