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The
rules from the New York State Department of Financial Services
are being closely because they lay out unprecedented
requirements on steps that financial firms must take to protect
their networks and customer data from hackers and disclose cyber
events to state regulators.
"Many organizations are going to have a lot of work to do to
come into compliance with these revised regulations," said Jed
Davis, a partner with law firm Day Pitney and former U.S.
federal cyber crimes prosecutor.
The state revised the rules in response to more than 150
comments on its initial proposed regulations.
The New York Insurance Association in one letter called the
regulation "too much of a 'one size fits all' rule" that was
overly specific and too broad. A New York Bankers Association
letter warned of unintended consequences that would "hamper
efforts to protect the public and may defy its purpose of
preventing cyber attacks."
The revised regulations include easing some timelines and
requirements, including standards for encrypting data and
authenticating access to networks. They also provide more time
for compliance, expanding the transition from six months to as
long as two years.
The agency said it would finalize the rules after a 30-day
comment period.
"This updated proposal allows an appropriate period of time for
regulated entities to review the rule before it becomes final
and make certain that their systems can effectively and
efficiently meet the risks associated with cyber threats,"
Financial Services Superintendent Maria Vullo said in a
statement.
The American Bankers Association, a critic of the original
draft, praised the revisions.
"Some good work has been done," association Senior Vice
President Doug Johnson said in a phone call. "Once we have
in-depth conversations with our membership, there may still be
some operational concerns we will want to express."
Reuters first reported on the agency's plan to delay the
regulations last week.
(Reporting by Jim Finkle in Boston; Editing by Richard Chang and
Lisa Shumaker)
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