Continuous, timely information availability underlies a number of stringent statutory requirements for the financial services industry. Yet, information is vulnerable to disasters; and if systems are unavailable for any reason, it can render the requisite data inaccessible within the time frames specified in the regulations. Further, in todays electronic world, data represents assets; and if data is lost, assets are lost. For these reasons, consumers, governments, regulatory agencies and financial services organizations take the availability of financial data extremely seriously. While data protection has always been a fiduciary responsibility for financial services executives, the regulatory pressure in this area has increased over the past decade. The September 11, 2001 attack on New York Citys financial district led to new laws that require increased data protection. In addition, the accounting scandals that came to light in 2001 and 2002 provided the impetus for new laws that require all public companies, including (but not exclusively limited to) financial services firms to ensure the timely availability of corporate data.
Among the regulations that apply to financial services firms are the Gramm-Leach-Bliley Act, the Sarbanes-Oxley Act, Basel II, the Interagency Paper on the U.S. Financial System, and the Health Insurance Portability and Accountability Act. With the exception of Basel II, which is a global agreement affecting large banks, these acts are applicable only to companies based or with operations in the United States. However, because of globalization, this typically includes many of the largest financial institutions, even if their headquarters are elsewhere. Regulatory environments are not static. New legislation is enacted from time to time, and existing regulations are occasionally modified. Old laws may be rescinded, or sunset clauses may automatically terminate them. Considering recent economic conditions and the spotlight those conditions have placed on the financial services industry, it is prudent to keep abreast of and anticipate revisions and additions to financial services firms regulatory obligations.
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