Market regulators adopt identity theft rules
WASHINGTON (Reuters) - Stock and futures brokers, mutual funds and investment advisers will be required to establish programs to help detect identity theft under new rules adopted by the regulatory agencies for securities and derivatives on Wednesday.
The vote by theSecurities 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 CFTC announced later on Wednesday it had also adopted the joint rules in a closed-door vote. The CFTC's rules would apply to such firms as futures brokerages and commodity trading advisers.
The rules will go into effect 30 days after they are published in the Federal Register.
"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 and Alden Bentley)