In the last 30 years, how many weather events can you remember? Maybe some recent “super storms” come to mind – Hurricane Sandy (2012), and Winter Storm Juno (2015) are probably at the top of your list. How prepared for these storms was your firm?
A 2007 study by the National Association of Insurance Commissioners (NIAC) found that more than 90% of small businesses interviewed had property/liability coverage while less than half (48%) of firms with annual revenues of more than $1 million have business interruption insurance.
It may not come as a surprise then that, following disasters such as these, many small business (20-40%) are forced to shut down, according to an Institute for Business & Home Safety (IBHS) report. It is important to understand the losses that can affect businesses and prepare accordingly. These losses can include: disruption of critical supplies and inability to move product, utility outages and power failures, employee transportation issues or remote access problems, and connectivity issues, just to name a few.
We recently hit our 500th post here on Hedge IT! To commemorate, we are hosting our annual blog awards! We've gathered the most thought-provoking, popular articles according to our readers and included a few of our personal favorites, as well.We hope you enjoy!
Two months into 2015 and already there have been changes within the financial service industry. From global security breaches, to the demands for increased investor transparency, to start-up funds launching and competing with their enterprise counterparts, the hedge fund landscape is as turbulent as ever. From a hedge fund technology perspective, there are a couple major trends that have started and will definitely continue to play out during the rest of 2015.
Zeroing in on these trends, today we released our new whitepaper aptly titled Four Trends Shaping Hedge Fund Technology. Read on for a sneak-peak of the topics covered in the paper and be sure to download the complete paper HERE.
In case you missed it, earlier this week we hosted a webinar during which our resident cybersecurity expert and SVP of Technology, Steve Schoener, answered questions regarding the results of the recent SEC cybersecurity exams and identified the top takeaways with meaning to hedge funds and investment management firms. Here’s a look at our Top 10 Takeaways from the recent exam findings. If video is more your style, you can watch the full webinar replay here.
1. WISPs are well adopted.
A WISP, or Written Information Security Policy, was found to be employed by 93% of broker-dealers and 83% of registered investment advisers. What is typically included in a WISP document? Similar to business continuity plans, WISPs identify scenarios firms need to be aware of from a security perspective as well as preparedness measures to address those scenarios. Both administrative and technical safeguards are identified, giving firms a complete picture of what to protect and the processes in place to do so.
In this Opalesque.TV video interview, Bob Guilbert and Vinod Paul from Eze Castle Integration discuss the cybersecurity landscape of the investment community, specifically the risks facing hedge funds and alternative investment managers in 2015. Both spend the majority of their time educating their client base on internal and external risks, protecting them against the “Activist Hacktivists” looking for any means of entry into funds.
These hackers will spend weeks, months, and sometimes even years trying to get access, most often with the goal of triggering illicit wire transfers out of the fund.
Today, the usual efforts of employees to avoid clicking links or opening files and password protocoling aren't enough. Everyone should be aware of new techniques employed by hackers like “spearfishing” and “whaterhole” attacks which, with more institutional dollars flowing into hedge funds, will become more frequent. Unless funds have the right Written Information Security Policy (WISP) and processes in place, together with true intrusion detection that monitors what is coming into the firm and what data and information is going out of the firm, they can be at risk of a cybersecurity attack.
This month (February 2015) The Financial Industry Regulatory Authority (FINRA) issued a Report on Cybersecurity Practices to assist firms in responding to the growing threats of cyberattacks. The report centered on seven (7) “key points” as defined by FINRA.
Our team regularly counsels clients on how to address these cybersecurity practices. So in the interest of sharing, here is a high level snapshot of how Eze Castle Integration addresses the key points in the report.
Key Point 1: A sound governance framework with strong leadership is essential. Numerous firms made the point that board- and senior-level engagement on cybersecurity issues is critical to the success of firms’ cybersecurity programs.
Eze Castle Integration has an appointed Chief Information Security Officer and an established Computer Security Incident Response Team (CSIRT). CSIRT members have predefined roles and responsibilities, which can take priority over normal duties. The CSIRT team is overseen by the Chief Information Security Officer (CISO), and comprised of individuals from various groups such Network Operations, Client Services, Cloud Services, Project Management, and Human Resources.
In its 2015 priorities, the SEC’s Office of Compliance Inspections and Examinations (OCIE) listed cybersecurity as a key focus area in its risk-based assessments. Then on February 3, 2015, OCIE released summary findings from its Cybersecurity Examination Sweep.
OCIE’s sweep focused on written documentation for their assessment and conducted "limited testing" of the accuracy of the responses. They did not review the technical sufficiency of the firms’ programs either. OCIE’s reliance on documentation highlights the importance of complete Written Information Security Policies.
Following are noteworthy items Eze Castle Integration observed in reviewing the findings.
Most firms adopted written information security policies, but 43% of advisers did not conduct periodic audits to determine compliance with these information security policies and procedures.
49% of advisers did not discuss mitigating the effects of a cybersecurity incident and/or outline the plan to recover from such an incident in their written business continuity plans.
The vast majority of examined firms conduct periodic risk assessments, on a firm-wide basis, to identify cybersecurity threats, vulnerabilities, and potential business consequences. However, only 32% of advisers require cybersecurity risk assessments of vendors with access to their firms’ networks.
In the Written Information Security Plans (WISP) Eze Castle Integration creates for clients, we include service provider risk assessments as a standard element.
Valentine’s Day is just around the corner, and Eze Castle is taking heed of this opportunity to spread the love.
For the fifth consecutive year, we are hosting a "Like for Life" Campaign with the intent to spread awareness and raise donations for a charitable cause. This year, we will be supporting School on Wheels, an organization that strives to educate and empower underprivileged children impacted by homelessness. The group’s mission is to augment the educational opportunities available to more than the 1.6 million homeless children in the United States.
Winter Weather Preparedness: Considerations for Keeping Your Firm and Employees Operational This Winter
Anyone who lives in a region that regularly receives snow knows (and expects) that every winter brings the potential for experiencing disruption, delays, cancelations and closures to roads, buses, trains, boats and subways that transport people to and from work. (If you’re in the Boston area, you’re experiencing this today with the MBTA shutting down all rail service to clean up from more than 70 inches of snow in the last three weeks.) Snow storms don’t just affect transportation though; weather events can cause power outages, force evacuations, impact deliveries, and as we saw recently with Winter Storm Juno, can cause entire states to ban travel.
Impacts of heavy snow if traveling to work
Let’s consider some of the issues firms can face even if a travel ban isn’t in place and employees must attempt to make their way to the office.
Most people who commute to work know that adverse weather can have a major impact on their travel to and from the office. Regardless of the manner of transportation (car, rail, subway, boat, bus, etc.), all will most likely experience delays and present challenges for commuters during a snow storm. Delays, breakdowns, cancellations, and longer commuting times are very common throughout a storm and can still impact travel days after a storm concludes, leaving employees largely unable to work effectively if at all.
With a new year comes new regulations for hedge funds and investment firms. Earlier this week, Eze Castle Integration hosted a webinar during which Ricardo Davidovich, partner at Haynes & Boone LLP shared his insight into the Securities and Exchange Commission’s (SEC) new examination priorities as well as reoccurring themes firms should expect to see play out through the year.
What’s New in 2015
One priority for examinations this year is the focus on retail investors. Davidovich says that “hedge funds, which in [the SEC’s] mind have historically been an exclusive and private club, are being sold to the retail and consumer client base.” Meaning they will be taking a closer look at the types of fees being sold, the sales practices and the suitability analysis. Firms should focus on making sure no information released is misleading and that there are provisions against fraud. There should be a real emphasis on policies to create guidelines that can be shown and proven to the SEC.