Published April 10, 2013
WASHINGTON – Stock brokerages, mutual funds and investment advisers will be required to establish programs to help detect identity theft under new rules adopted by U.S. securities regulators on Wednesday.
The vote by the U.S. Securities and Exchange Commission at a public meeting marked the first official action by its new chairman, Mary Jo White, who was sworn in Wednesday morning.
The new rules stem from a requirement in the 2010 Dodd-Frank Wall Street reform law, and are not considered to be controversial.
The law amended the Fair Credit Reporting Act to give the SEC and the Commodity Futures Trading Commission authority to establish identity theft rules for the firms they regulate and to enforce them.
Previously, authority had been delegated to the Federal Trade Commission.
The SEC and CFTC first jointly proposed the rules in February 2012.
They require firms to create programs to set up red flags to spot potential identity theft, respond to cases of ID theft and periodically update their programs.
The joint rules become final after both the SEC and CFTC sign off. The CFTC's rules would apply to such firms as futures brokerages and commodity trading advisers.
"These rules are a common sense response to the growing threat of identity theft to all Americans," White said.
SEC Commissioner Luis Aguilar, a Democrat, said many financial firms already have programs in place. However, under the final rule, some investment advisers, such as those who advise hedge funds, will be covered for the first time.
(Reporting by Sarah N. Lynch; Editing by Jeffrey Benkoe)