Regulation S-P has direct bearing on customer information when a representative quits one firm and moves to another. The first thing the rep thinks about is how to transfer his customers from his old firm to his new one. The temptation is to copy all the names of customers, their telephone numbers, their social security numbers and personal confidential financial information, and resume business with these customers from the person's new firm. However, before a person carries or discloses confidential customer information to a new firm, he or she must afford customers an opportunity to opt out. The new firm is considered an outside "unaffiliated third party," and unless a customer must receives notice and a chance to stop the transfer, any transfer or disclosure would constitute a serious violation of both federal law and the SEC's Regulation S-P.
Thursday, August 29, 2013
SERIES 6 CANDIDATES SHOULD KNOW PROVISIONS OF SEC REGULATION S-P ON CONFIDENTIALITY OF CUSTOMER DATA
The Series 6 exam asks questions about safeguarding customer information obtained when opening the account. Specifically, the Series includes questions Regulation S-P, the privacy regulation of the SEC.
Regulation S-P has direct bearing on customer information when a representative quits one firm and moves to another. The first thing the rep thinks about is how to transfer his customers from his old firm to his new one. The temptation is to copy all the names of customers, their telephone numbers, their social security numbers and personal confidential financial information, and resume business with these customers from the person's new firm. However, before a person carries or discloses confidential customer information to a new firm, he or she must afford customers an opportunity to opt out. The new firm is considered an outside "unaffiliated third party," and unless a customer must receives notice and a chance to stop the transfer, any transfer or disclosure would constitute a serious violation of both federal law and the SEC's Regulation S-P.
Regulation S-P has direct bearing on customer information when a representative quits one firm and moves to another. The first thing the rep thinks about is how to transfer his customers from his old firm to his new one. The temptation is to copy all the names of customers, their telephone numbers, their social security numbers and personal confidential financial information, and resume business with these customers from the person's new firm. However, before a person carries or discloses confidential customer information to a new firm, he or she must afford customers an opportunity to opt out. The new firm is considered an outside "unaffiliated third party," and unless a customer must receives notice and a chance to stop the transfer, any transfer or disclosure would constitute a serious violation of both federal law and the SEC's Regulation S-P.
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