World-Class Cybersecurity Leads to Strong FINRA Compliance

Kaytuso has a comprehensive and well-documented process for helping financial firms approach FINRA with clarity and confidence.

Kaytuso: Comply+ for FINRA To Help Financial Institutions Achieve Regulatory Compliance Required By The United States Financial Industry Regulatory Authority, Inc.

The Financial Industry Regulatory Authority (FINRA) is an independent, nongovernmental organization that writes and enforces rules that govern the securities industry. FINRA non-compliant firms not only increase their cybersecurity risk but also face stiff penalties from regulators.

But for small and midsized firms, achieving FINRA compliance can be a daunting prospect. As networks embrace technologies like cloud computing and mobile devices, the skills and time required to align network technology with FINRA requirements increases, overwhelming the ability of even a highly skilled IT team.

Kaytuso designed its FINRA service to take the doubt and pain out of compliance. Since the formal inception of FINRA in 2007, we’ve helped broker-dealers, financial advisors, and other securities firms enforce the highest standards for ethics and transparency, achieving seamless FINRA compliance with confidence.


The NIST Cybersecurity Framework is a Perfect Foundation for FINRA Compliance

FINRA’s regulations — especially those designed for small and midsized firms — are greatly informed by the National Institute for Standards and Technology (NIST) Cybersecurity Framework, a federal resource originally designed to help protect national infrastructure from cyber threats.

NIST is a comprehensive system for managing cybersecurity risk, which outlines five distinct phases for effective risk management.

  • Identify

    Find the vulnerabilities of your physical and digital assets

  • Protect

    Control access to those assets with appropriate safeguards

  • Detect

    Maximize visibility over your network and identify threats quickly

  • Respond

    Contain cybersecurity events with a response plan

  • Recover

    Restore damaged services with a clearly defined action plan and set of tools

We combine our experience implementing the NIST Cybersecurity Framework with our FINRA-specific knowledge to provide comprehensive regulatory compliance solutions. Here are some of the FINRA and SEC rules that we can help you comply with:

  • FINRA Rule 3110

    Standards for supervisory practices and documentation, branch office supervision, and human resource needs.

  • FINRA Rule 4530(b)

    Requirements for the reporting of financial irregularities and violations, including security self-assessments.

  • 17 CFR §248.201-202

    Policies and procedures to protect customer information from cyberattacks.

  • 17 CFR §248.1-100

    Explains the firm’s responsibility in the detection and prevention of identity theft.

FINRA Steps up Protections Against Phishing Attacks

With its Report on Cybersecurity Practices in late 2018, FINRA has made it clear that addressing the threat of phishing attacks is of maximum importance. Did you know that financial firms are up to 300 times more likely to experience a cyberattack than other industries? Because phishing is the most popular method of attack used by hackers today, it makes sense that regulators would prioritize phishing protections.

Kaytuso combines technical controls and employee awareness training to help businesses achieve FINRA compliance and stay safe from phishing.

  • We’ll train your staff to identify phishing attack red flags in email addresses, web addresses, and other types of correspondences.
  • Implement confirmation policies for transaction requests and ensure that they’re enforced uniformly across your entire organization.
  • Run regular phishing simulations to gauge the level of real-world preparedness at your company. You can read more about our phishing simulations here.
  • Isolate customers and other critical assets in your network to reduce the impact of a potentially successful phishing attack.

The proactivity and prudence Kaytuso solutions provide are key, as firms tend to get lax with their phishing protections as time passes. This is especially true at firms that employ lots of temporary workers or contract staff.

Penetration Testing Service Delivers Maximum Insight and Security

Depending on your organization’s unique cybersecurity risks, it may be beneficial to run annual or semi-annual penetration tests. During a penetration test, the security experts at Kaytuso will assume the role of a malicious hacker and use the latest hacking techniques to try to break into your network.

White Box Testing

In this test, our team is given access to limited information about your network. The goal is to see if, by leveraging that information, we can exfiltrate valuable data or do (virtual) damage to your network.

Black Box Testing

A more difficult test, the Kaytuso team approaches your network with no knowledge —other than what’s publicly available — and sees how deep they can get into your systems.

Stronger Cybersecurity and Compliance for Branch Offices

FINRA outlines several requirements for the proper supervision of staff, hiring practices, and the registration of trading personnel, each of which has ramifications for your IT systems. These complexities intensify with each branch office you add, whether those branches are independent contractors or a part of your organization.

We can help ensure that your branch offices stay compliant with FINRA, so you don’t have to worry.

  • Design a clear cybersecurity policy for the branch office that covers software controls, data security, vendor management, and more.
  • Assist in-branch examinations and the use of automated tools to verify branch cybersecurity protections are functioning optimally.
  • Implement security controls like end-to-end encryption for in-transit financial data, the protection of wireless networks, and the deployment of multi-factor authentication (MFA).

Expertise in Data Archiving to Meet FINRA Needs

FINRA has several regulations regarding the archiving of data, including SEC Rule 17a-3, 17a-4, and FINRA Rule 4511. These require that all firm communications, including email, text messages, collaboration, and instant messaging applications, meet strict standards for retention.

  • Archive all records on non-renewable, non-erasable formats
  • Meet requirements for record format, quality, and availability
  • Keep archived data safe for at least seven years

The Role of Cloud Computing in Financial Services

The latest version of FINRA has revised standards for cloud security, requiring every firm that wishes to adopt cloud services have a clear plan to govern those applications with the same rigor that they manage traditional on-premise solutions.

Kaytuso guides financial firms through the FINRA cloud vendor management process

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    Establish a relevant set of controls based on a careful evaluation of cloud vendor service level agreements (SLAs)

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    Ensure strong FINRA compliance throughout the cloud vendor lifecycle, including security event notification, audits, testing, and more.

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    Proper removal and destruction of protected data once your relationship with a cloud vendor has ended.

Kaytuso Takes the Complexity Out of FINRA Compliance

Don’t let FINRA compliance become a liability. The experts at Kaytuso have been providing the financial services industry with FINRA compliance service for two decades and are eager to help new clients discover a deeper sense of confidence when facing compliance challenges.

Want to ask our FINRA experts a question? Contact us anytime at or 212-792-9932 to speak with one of our experts. We look forward to speaking with you.

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