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Cybersecurity Tutorial

This tutorial provides a set of industry standards and best practices to help manage cybersecurity risks.

The guidance provided herein offers companies the ability to customize and quantify adjustments to their cybersecurity programs using cost-effective security controls and risk management techniques. For smaller companies, this can help in understanding how to provide basic security for computer systems and networks.1 For larger companies, this provides a cost-effective approach to securing computer systems based on business needs, without placing additional regulatory requirements on the business.

Key points in this report include:

  • A sound governance framework with strong leadership is essential to effective enterprisewide cybersecurity. Board-level and senior management-level engagement is critical to the success of firms’ cybersecurity programs, along with a clear chain of accountability.
  • A well-trained staff can serve as the first line of defense against cyber attacks. Effective training helps to reduce the likelihood of a successful attack by providing well-intentioned staff with the knowledge to avoid becoming inadvertent attack vectors (for example, by unintentionally downloading malware).
  • The level of sophistication of technical controls employed by an individual firm is highly contingent on that firm’s individual situation. While a smaller firm may not be positioned to implement the included controls in their entirety, these strategies can serve a critical benchmarking function to support an understanding of vulnerabilities relative to industry standards.
  • Companies use third-party vendors for services, which requires vendor access to sensitive firm or client information, or access to firm systems. At the same time, the number of security incidents at companies attributed to partners and vendors has risen consistently, year on year. Firms should manage cybersecurity risk exposures that arise from these relationships by exercising strong due diligence and developing clear performance and verification policies.

This Cybersecurity Best Practices Guide describes common practices and suggestions which may not be relevant or appropriate in every case. It is not intended as a minimum or maximum standard of what constitutes appropriate cybersecurity practices. Effective management of cyber risk involves a contextual analysis in the circumstances of each Dealer Member

The customers, employees, and current and/or potential partners of your company have an expectation that their sensitive information will be respected and given adequate and appropriate protection. Moreover, companies have certain legal obligations to safeguard personal information.

The document is not intended to create new legal or regulatory obligations or modify existing ones, including existing requirements. The information in this guide is provided for general information purposes only and is not guaranteed to be accurate or complete, nor does it constitute legal or other professional advice. Companies seeking further guidance should consult a cybersecurity professional for specific advice about their cybersecurity program.

Purpose and Applicability

The purpose of this publication is to provide an understanding of the specific, standards-based security controls that make up a best practice cybersecurity program.

Implementation of controls is expected to vary between Companies subject to different threats, different vulnerabilities, and different risk tolerances. Investment industry members can determine activities that are important to critical service delivery and can prioritize investments to maximize the impact of each dollar spent.

Specific objectives that follow from this publication are:

  • Establishing and maintaining a robust and properly implemented cybersecurity awareness program, and ensuring that end-users are aware of the importance of protecting sensitive information and the risks of mishandling information;2
  • Facilitating a consistent and comparable approach for selecting and specifying security controls for Dealer Member computer systems.
  • Providing a catalog of security controls to meet current information protection needs and the demands of future protection need based on changing threats, requirements, 3 and technologies; and,
  • Creating a foundation for the development of internal assessment methods and procedures for determining security control effectiveness.

This best practices framework is intended to function as a living document and will continue to be updated and improved as the industry provides feedback on implementation. Lessons learned from the early distribution of this framework to companies will be integrated into future versions. This will ensure that the document continues to meet the needs of companies in an environment of dynamic threats and innovative solutions.

Cybersecurity awareness is a critical component of a comprehensive cybersecurity program. This will be discussed more extensively in subsequent sections, but fundamentally, cybersecurity awareness requires policies and training to enforce
awareness (e.g. clean desk policy to avoid breaches through facility support staff such as janitors or security guards, mandatory annual training for all employees, etc.) 3 Some of these information protection categories (e.g. exposure or loss of significant client information) have special, more restrictive regulatory requirements for information security protection. Failure to properly protect this information can result in significant fines and penalties.


This guide is applicable to companies of all sizes and budgets but specifically targeted at small and mid-sized firms.

The structure of the publication facilitates communication of cybersecurity activities and outcomes across a Dealer Member enterprise – from the implementation/operations level to the executive level. The document is intended to serve a diverse audience, including senior level management, auditors, end-users, information security professionals, information technology management, and field personnel.

Staff who may benefit from a review of the security controls in this document include:

  • Individuals that have access to systems, including end users.
  • Individuals with the information system, security, and/or risk management and oversight responsibilities (e.g., chief information officers, senior information security officers, information system managers, information security managers);
  • Individuals with information system development responsibilities (e.g., program managers, system designers and developers, information security engineers, systems integrators);
  • Individuals with information security implementation and operational responsibilities (e.g., mission/business owners, information system owners, common control providers, information owners/stewards, system administrators, information system security officers); and
  • Individuals with information security assessment and monitoring responsibilities (e.g., auditors, system evaluators, assessors, independent verifiers/validators, analysts, information system owners).

Defining Cybersecurity

There is a wide range of currently accepted cybersecurity definitions: The Committee on National Security Systems (CNSS-4009) defines cybersecurity as the ability to protect or defend an enterprise’s use of cyberspace from an attack,
conducted via cyberspace, for the purpose of disrupting, disabling, destroying, or maliciously controlling a computing environment/infrastructure; or, destroying the integrity of the data or stealing controlled information.

The National Institute of Standards and Technology defines cybersecurity as “the
process of protecting information by preventing, detecting, and responding to attacks.” Similar to financial and reputational risk, cybersecurity risk affects a company’s bottom line. It can drive up costs and impact revenue. It can harm an organization’s ability to innovate and to gain and maintain customers.

The International Organization for Standardization defines cybersecurity or cyberspace security as the preservation of confidentiality, integrity and availability of information in the Cyberspace. In turn, “the Cyberspace” is defined as “the complex environment resulting from the interaction of people, software and services on the Internet by means of technology devices and networks connected to it, which does not exist in any physical form.”

Cybersecurity is not hard, it is merely complex. The Australian Signals Directorate (ASD) has articulated a set of the top 35 strategies required to protect computer networks. ii Of these, the ASD stresses that implementing just the Top 4 cybersecurity strategies will mitigate at least 85 percent of targeted cyber intrusions. Those top four controls are:

  1. Application whitelisting – permitting only those applications that have been approved to do so to operate on networks.
  2. Applications Security Patching – enforcing effective practices to deploy new security patches in a timely fashion.
  3. Operating System Security Patching – same practice as above, but for the operating system.
  4. Limiting Administrative Privileges – allowing only trusted personnel to configure, manage, and monitor computer systems.

The challenge is to accomplish these and other related tasks in a complete and comprehensive manner while facilitating the essential operating functions of a successful business.

This document aids in that effort by providing a readable guide for security professionals, business executives, and employees to understand the cybersecurity threat to their businesses, and to develop an effective program to guard against cyber-threats.

Cybersecurity is not only an IT problem, but it is also an enterprise-wide problem that requires an interdisciplinary approach, and a comprehensive governance commitment to ensure that all aspects of the business are aligned to support effective cybersecurity practices.

Figure 1 provides a conceptual framework upon which to understand all aspects of cybersecurity, including discussions, solutions, and services.

  • The industry is guided by both Government Policies that shape cyber-defenses, and the Regulatory Environment that sets standards for conduct.
  • Business Requirements drive the specific cybersecurity elements that are necessary to achieve business objectives.
  • Threat Intelligence gleaned from newspapers, governments, industry partners, security vendors, internal efforts, or a combination of all these sources, establishes the landscape that security measures must be ready to respond to, both today and in the future.
  • Corporate Security activities related to cybersecurity, physical security, and personnel security, collectively provide the integrated elements of an effectively protective solution.
  • Finally, Cybersecurity Technology underpins but does not drive an effective cybersecurity policy. Too often, technology is viewed as the solution rather than merely a component of a broader strategy.

A comprehensive approach that integrates these six elements into an adaptive cybersecurity strategy will frame top priorities and focus actions to mitigate cyber risks to assets, systems, and information.

Threat Landscape

The investment industry faces a variety of rapidly evolving cybersecurity threats, including hackers penetrating systems, insiders compromising firm or client data for commercial gain, nation-states that may acquire information to advance national objectives, and hacktivists whose objectives may be to disrupt and embarrass an organization.

Depending on the environment in which an information system or network is located, and the type of information it is designed to support, different classes of threats will have an interest in attempting to gain different types of information or access.

Among the most significant and challenging threats are the sophisticated attacks perpetrated by Advanced Persistent Threats (APTs). APTs involve activity largely supported, directly or indirectly, by a nation-state. APTs target carefully selected, high-value data in every industry, from aerospace to wholesalers, education to finance.

Firms need to understand which threats are both most likely and most dangerous to their unique situation to effectively develop and implement their cybersecurity strategy.

Firms need to understand which threats are both most likely and most dangerous to their unique situation to effectively develop and implement their cybersecurity strategy.

Purpose and Applicability

A cybersecurity framework is a set of cybersecurity activities, desired outcomes, and applicable references that are common across critical infrastructure sectors. These frameworks can present industry standards, guidelines, and practices in a manner that allows for communication of cybersecurity activities and outcomes across the Dealer Member – from the executive level to the implementation/operations level.

The NIST Cybersecurity Framework consists of five concurrent and continuous Functions: Identify, Protect, Detect, Respond, Recover. When considered together, these Functions provide a high-level, strategic view of the lifecycle of an organization’s management of cybersecurity risk. The NIST Framework then identifies underlying key Categories and Subcategories for each Function. It further indexes each Subcategory with example Informative References, such as: existing standards, guidelines, and practices.

Relationship to Other Security Control Publications

This document draws on a variety of sources, including security controls from the defense, audit, financial, industrial/process control, and intelligence communities, as well as controls defined by national and international standards organizations. The guidelines have been developed from a technical perspective to create a sound and broadly applicable set of security controls for computer systems and companies.

The following documents, principles, and best practices constitute foundational references:

  1. SANS Top 20 Critical Security Controls – A recommended set of actions for cyber defense that provide specific and actionable ways to thwart the most pervasive attacks.
  2. Small Business Information Security: The Fundamentals (NISTIR 7621) – Outlines the actions that are absolutely necessary for a small business to take to protect its information, systems, and networks.
  3. NIST Cybersecurity Fundamentals For Small Business Owners
    Best practices recommended by the National Institute of Standards and Technology to help small businesses protect the safety and security of information of their customers and their employees.
  4. Security and Privacy Controls for Federal Information Systems and Organizations (NIST 800-53r4) –  The international standard for security controls covering 17 areas, including access control, incident response, business continuity, and disaster recoverability.
  5. Government of Canada’s Information Technology Incident Management Plan – Addresses cyber-related threats, vulnerabilities, and incidents that affect service to Canadians, government operations, security or privacy of information, or confidence in the government.

Management, Operational, and Technical Controls

The catalog of security controls in this publication can be effectively used to manage information security risk at three distinct tiers – the organization level, the mission/business process level, and the information system level.

Organizations have the responsibility to select the appropriate security controls, to implement the controls correctly, and to demonstrate the effectiveness of the controls in satisfying established security requirements. This publication is intended to complement and does not replace, an organization’s cybersecurity risk management processes. Users with existing cybersecurity programs can leverage the document to identify opportunities to align with industry best practices, while companies without an existing cybersecurity program can use the document as a reference to establish one.

Governance and Risk Management

Cybersecurity is not solely an IT issue. It is a multifaceted challenge that requires an enterprisewide approach to its management. Total protection from cyber threats is unattainable. Rather, a best practice is a risk-based approach that implements a comprehensive strategy to deliberately avoid, mitigate, accept, or transfer risks posed by cyber threats. Companies need to establish and maintain an appropriate governance and risk management framework to identify and address risks for communications networks and services.

Governance Framework

The first step board or executive team should take is to determine who within the company should be involved in the development of a cybersecurity program. Key initial steps include identifying known risks and established controls. A best practice is to establish a cross-organizational committee of senior executives that brings together the full range of enterprise knowledge and capabilities. This should include IT and corporate security, as well as business owners.

Leadership is key. Selecting an executive with broad cross-functional responsibilities such as the Chief Financial Officer or Chief Operating Officer to lead this committee can help ensure that the effort remains focused upon enterprise-wide concerns, rather than siloed within one reporting chain without the benefit of broader corporate adoption. This effort should report to a specialized committee, such as the Auditor the Risk Committees, or in some cases, to the board itself.

Figure 2 – Cybersecurity Framework Implementation Steps


The NIST Cybersecurity Framework provides a proven process upon which to establish and manage cybersecurity program development. Figure 2 above outlines the steps that boards should direct senior management to implement and report progress upon.

A best practice is to consider appointing a Chief Information Security Officer (CISO) with responsibilities for information security to oversee the cybersecurity efforts within a company. Regardless of who is appointed to oversee cybersecurity efforts, cybersecurity is a shared responsibility across the entire enterprise, including senior management, staff, consultants, partners, and clients. Cybersecurity awareness needs to reach all those constituencies.

The program should begin with the identification of what types of information the company has and where it is located. Information is often duplicated across multiple locations with different controls in place to protect it. A risk-based approach emphasizing critical and mission-critical systems as focal points will concentrate efforts on the highest impact areas first. Companies should create an accurate inventory of:

The focus of the effort should be to identify the company’s “crown jewels” and to prioritize remaining data and systems. Once this is completed, the company can move forward with a risk-based cybersecurity program that allocates the highest level of protection to the most valuable data. The company should create a current profile of its cybersecurity protections.

Cybersecurity efforts should be oriented towards threats specific to the industry and similarly situated companies. Companies should conduct threat risk assessments specific to the prioritized systems, with the intention of creating a risk-based understanding of priorities. The operational environment needs to be constantly reviewed to determine the likelihood of a cybersecurity event and the impact that the event could have. This is a continual and iterative process shaped by changes to the company’s IT environment, as well as evolutions in its business model.

Based on knowledge gleaned from the risk assessment, companies should identify the target profile that addresses the company’s desired cybersecurity outcomes. This should extend beyond the company’s own systems to consider those of external stakeholders upon which they rely, to include sector entities, customers, and business partners.

Upon completion of the target profile, companies need to compare that target profile with the current profile and determine gaps. Those gaps should be prioritized into a roadmap plan that addresses the gaps based upon factors unique to the company, specifically the business requirements, system configurations, and resources available to close gaps. Each company is different; thus, developing an achievable plan with adequate resourcing should be the goal.

Implementing the action plan and monitoring the progress needs to become a core business function. Given today’s environment, cybersecurity is not a one-time project but rather an ongoing responsibility for senior management and boards – for companies of all sizes. Senior management needs to monitor its implementation plan and report regularly to the board on progress in achieving its target end-state. While the NIST Cybersecurity Framework provides an excellent set of tools to guide the implementation of a cybersecurity program, each company should determine which standards, guidelines, and practices work best for its needs.

Board and Senior Management Involvement

The National Association of Corporate Directors (NACD) cites five cybersecurity principles for boards. The principles state:

Directors need to understand and approach cybersecurity as an enterprise-wide risk management issue, not just an IT issue.

Boards should recognize that cybersecurity extends beyond the company’s networks to suppliers, partners, affiliates, and clients.

There is a need to understand the entire ecosystem and ensure that senior leadership is comprehensive in its security approach.

Directors should understand the legal implications of cyber risks as they relate to their company’s specific circumstances.

High-profile cyber-attacks have spawned a range of lawsuits. Boards should understand the contours of liability, and adequately protect against those threats.

Directors should ask management to solicit external counsel’s point of view on potential disclosure considerations in the event of a breach and incorporate that into breach plans.

Boards should have adequate access to cybersecurity expertise, and discussions about cyber-risk management should be given regular and adequate time on the board meeting agenda.

Directors should seek regular advice on cybersecurity including “deep dive” briefings from internal sources and external experts, including cybersecurity firms, government agencies, industry associations, and peer institutions.

Directors should set the expectation that management will establish an enterprise-wide cyber-risk management framework with adequate staffing and budget.

Directors should ensure that cybersecurity is a cross-departmental function led by a senior executive with cross-departmental authority, such as the CFO or COO.

Directors should expect regular reporting from management with metrics that quantify the business impact of cyber-threat risk management efforts reported.

Directors should ensure that a specific cybersecurity budget tied to the execution strategy is established so that the program is not exclusively tied to one department.

Board and management discussion of cyber risk should include identification of which risks to avoid, accept, mitigate, or transfer through insurance, as well as specific plans associated with each approach.

Total cybersecurity is an unrealistic goal; concentration of resources upon the most critical data assets is a best practice.

Directors should look to ensure that the company adopts a clear strategy with layered approaches that best fit the specific business needs of the company.

Directing the implementation of a comprehensive cybersecurity program as discussed above is incumbent upon all boards – regardless of company size.

Best Practice Recommendations: Small- to Mid-Sized Dealer Members

Protecting your organization’s assets requires a focus on the following three fundamental goals: iii


Any important information you have that should be kept confidential. This information should only be accessed by people (or systems) that you have given permission to do so.


Maintain the integrity of information assets to keep everything complete, intact, and uncorrupted.


Maintain the availability of systems, services, and information when required by the business or its clients.

Achieving these goals can be accomplished by performing the Cybersecurity Framework functions outlined below: iv

Personnel Screening and the Insider Threat

Organizations typically focus primarily on external threats. They implement technical solutions, such as installing antivirus programs to protect their computer systems from malicious software, or firewalls to help protect them from Internet-based threats.

A 2012 survey by cybersecurity vendor, Cyber-Ark, found that 71% of 820 IT managers and C-level professionals interviewed considered insider threats to be their priority cybersecurity concern.v

An insider threat is defined as “a current or former employee, contractor, or other business partners who has or had authorized access to an organization’s network, system, or data, and intentionally exceeded or misused that access in a manner that negatively affected the confidentiality, integrity, or availability of the Dealer Member’s information or computer systems.” vi

Some of the risks posed from insider threats in the financial sector are outlined below: vii
Undesired disclosure of confidential customer and account data – jeopardizing an organization’s most valuable relationships
Loss of intellectual property
Disruption to critical infrastructure
Monetary loss
Regulatory repercussions
Destabilization, disruption, and destruction of financial institutions’ cyber assets
Embarrassment, and public relations/reputational risk issues

According to the Carnegie Mellon’s CERT Insider Threat Center, the employees who pose the greatest insider threat risk are the following:
Disgruntled employees who feel disrespected and are seeking revenge.
Profit-seeking employees who might believe that they can make more money by selling stolen intellectual property.
Employees moving to a competitor or starting a business who, for example, steal customer lists or business plans to give themselves a competitive advantage.
Employees who believe they own the intellectual property that they help develop. As a result, they take the intellectual property with them when they leave the organization.

The following are recommendations for addressing the insider threat: viii

By recognizing the potential harm posed by current or departing employees, an organization can help to mitigate the damage that may arise from insider threats.

Physical and Environmental Security

The physical security of IT assets is a cybersecurity first line of defense. The effect of a stolen laptop or smartphone can be just as disruptive to an organization as a cyber attack. As a result, cybersecurity safeguards such as passwords and PINS need to be complemented by other security measures, such as locks that keep laptops from being stolen, or the use of an Uninterruptible Power Supply (UPS) to protect an information system during a power outage.

Physical security encompasses defensive mechanisms to the following threats:

Human treats

Intentional or unintentional damage caused by people, for example, an intruder accessing a restricted area or an employee error.

Environmental threats

Damage caused by the weather such as rain, fires, floods, etc.

Supply system threats

Damage caused by an interruption in energy supply that negatively impacts an information system.

The following are recommendations for physical and environmental security:

Cybersecurity Awareness and Training

The risk of a cyber attack to financial institutions continues to grow, as our highly connected world creates more opportunities for cybercriminals. Because financial institutions rely on online tools to help them communicate with stakeholders, they remain the constant target of cybercriminals who want to steal their intellectual property and confidential information. Price Waterhouse Coopers’ 2015 Global State of Information Security® Survey suggests that businesses that have a security awareness program report significantly lower average financial losses from cybersecurity incidents. It also points out that an effective security awareness program requires adequate funding. ix

Many organizations invest heavily in technical controls to protect their computer systems and data. However, most of these technical controls are rendered useless because employees lack cybersecurity awareness training. Employees take risks online and this greatly increases cyber-related risks to their organization. Risky activities by employees include opening suspicious emails and not protecting sensitive information stored on, or transmitted from, their computers. The 2015 Cyberthreat Defense Report Survey reports that low-security awareness among employees remains the greatest inhibitor to defending against cyber threats. x

Participants in the survey were asked to rate issues that inhibit the defense against cyber threats.

On a scale of 1 – 5 (with 5 being the highest) survey participants were asked to rate how each of the following issues inhibits their organizations from adequately defending themselves against cyber threats

Low-security awareness ranked number one. This result highlights the importance of security awareness training as the principal activity that an organization can undertake in order to improve its cyber defenses. Employees should be informed about good cybersecurity practices, and understand that they play a crucial role in safeguarding their organization’s information assets. With proper training, employees are the first line of defense against cyber threats.

The following are recommendations for cybersecurity awareness and training:

Assessing Threats and Vulnerabilities

Cybercriminals continue to take advantage of basic security vulnerabilities in computer systems. These include unpatched Windows Operating Systems, weak passwords, and a lack of end-user education. Organizations that do not scan for vulnerabilities and proactively address information system weaknesses face an increased likelihood of having their systems compromised. In order to protect information assets against the growing threat of cyber attacks that target information system vulnerabilities, more organizations have included vulnerability assessments as a component of their cybersecurity programs. Vulnerability assessments are useful for identifying vulnerabilities in computer systems. Assessment results assist the organization in understanding where cyber-related business risks lie. xi

The following are recommendations for assessing threats and vulnerabilities:


Network Security

An organization’s constant connectivity to the Internet exposes it to a hostile environment of rapidly evolving threats. In addition, employees can intentionally or unintentionally threaten the network because of their actions.

Network security refers to any activities designed to protect the confidentiality, integrity, and availability of the network, as well as the information assets that rely upon it. In general, network security has three fundamental objectives: xii
To protect the network itself;
To reduce the susceptibility of computer systems and applications to threats originating from the network; and,
To protect data during transmission across the network.

Cybercriminals are continuously searching for weaknesses in an organization’s Internet-facing network protection devices (e.g. firewalls). These devices protect an organization from threats that emanate from the Internet. Without a firewall at the network perimeter to protect an organization’s network from Internet-based threats, cybercriminals could easily steal intellectual property and sensitive information.

A multi-layered defense comprised of the next-generation firewall will substantially reduce the number of successful Internet-based attacks on an organization’s internal network.

The following are recommendations for network security:

Wireless Network Security

While wireless connectivity has the advantage of increased mobility and productivity, it also introduces a number of critical security risks and challenges. In many high profile cases, thefts of intellectual property and sensitive information have been initiated by attackers that gained wireless access to organizations from outside the physical building. Because wireless signals typically broadcast outside a building’s physical infrastructure, they bypass traditional wired security perimeter safeguards such as firewalls and Intrusion Protection Systems.

In some cases, cybercriminals have gained unrestricted access to an organization’s internal network by installing hidden, unauthorized wireless access points on the network. Disgruntled employees or other personnel with malicious intent, under the guise of cleaning staff or a security guard, are typically responsible for planting these devices. Wireless networks have made it exponentially easier for cybercriminals to penetrate organizations without physically stepping foot inside a building. As a result, it is critical that strong security safeguards be implemented to mitigate these risks.

The following are recommendations for wireless network security:

Remote Access

A variety of technologies are available today that provide secure remote access to an organization’s computer systems. Much like wireless technologies, it is critical that remote access is continuously managed and maintained in order to keep unauthorized users from accessing your organization’s network.

The following are recommendations for secure remote access: xiii

Remote Access Endpoint Security

Employees accessing organization resources using a secure VPN should do so using company-owned equipment. In addition to the guidance outlined in the upcoming Information System Protection section, remote access users should follow the advice outlined below.xiv

Ensure that the anti-malware solution is up to date so that it continuously monitors for malicious activity.

Do not transfer information to unauthorized destinations (e.g., unauthorized storage devices, Hotmail, Gmail, DropBox)

Do not plug unauthorized devices into company computers (e.g., smartphones, personal memory sticks and hard drives).

Do not plug company-owned USB keys into unapproved devices (e.g., Laptops, Computers, Smart TV’s, etc.).

Be suspicious of any phone calls, visits, or email messages from individuals asking about employees, their families, and sensitive business matters.

Do not answer suspicious emails or click on any links in suspicious emails.

Do not leave your laptop or related materials unattended in a public workspace, even for a moment.

Make sure that you guard confidential information on your screen from curious onlookers.

• Avoid unknown, unfamiliar, and free Wi-Fi connections unless they are secured with a password and encryption

Information System Protection

While it is critical to secure the perimeter of an organization’s network from threats that stem from the Internet, it is equally important that the computer systems themselves be protected from attempts to hack them. Similarly, company computers that are used to access company resources remotely should have the same security controls as those that are used onsite.

The following are recommendations for information system protection from cyber threats such as ransomware and viruses:

Vendors such as Norton and McAfee sell all-in-one endpoint security solutions for personal, small business, and enterprise computer systems at a very reasonable price.

Bring Your Own Device

The Bring Your Own Device (BYOD) concept has been a growing trend in business. It refers to the policy that allows employees to bring personally-owned devices – including laptops, smart phones and tablets – to their workplace and to use those devices to access the company’s applications and data. While real business benefits can be derived from BYOD in the workplace, it does carry significant risks. For example:

The employee may lose a personal device that contains business information.
The employee may unintentionally install applications that are malicious in nature.
The employee may unintentionally disclose business information, for example, by allowing family members or friends to use a laptop containing sensitive business information.
The BYOD implementation, itself, may be in breach of applicable laws and regulations wherein an improper BYOD implementation may be in violation of data privacy laws and regulations.

A firm should conduct a risk assessment and seek legal advice before deciding whether or not they should allow BYOD and if they can manage the associated risks. If deciding to move forward with BYOD, a firm should implement a series of mitigating actions and controls. Given that BYOD in the workplace has resulted in significant data breaches, xv it is important that firms consider instituting a comprehensive BYOD policy. At a minimum, the BYOD policy should cover the following: xvi

Who the policy applies to (e.g., staff, contractors)
Which devices can be used (e.g., laptops, tablets)
What services or information can be accessed (e.g., email, calendars, contacts)
The responsibilities of the employer and staff members (including for security measures that need to be adopted)
Which applications (apps) can and cannot be installed (e.g., for social media browsing, sharing, or opening files, etc.)
How business applications and data are accessed
o Ideally, untrusted devices should access business applications and information via a virtual desktop. Citrix and               VMware are examples of companies with virtual desktop products that are well suited for secure BYOD                                  implementations.
What help and support is available from IT staff; and,
The penalties for non-compliance (e.g., loss of BYOD privileges and other disciplinary procedures).

Backup and Recovery

A backup plan is essential for any organization in order to prepare for a disaster. It is at risk of losing intellectual property and sensitive information without one. Backups ensure that an organization can recover quickly by restoring lost or damaged files.

For small- and mid-sized business, the following backup options are available:
Portable or desktop USB hard drive
o An automated process can backup each information system on a regular basis.

o Important user data can be backed up on a server that is connected to the network. An automated process on the               server then backs up the user data on a regular basis.

The following are recommendations for backup and recovery.


User Account Management and Access Control

Access controls determine how employees read their email, access their documents, and connect to other network-based resources. Properly implemented access controls help ensure intellectual property and sensitive data are protected from unauthorized use, disclosure, or modification.

The following are recommendations for user account management and access control:


Asset Management

Managed control of computer systems and software plays a critical role in keeping an organization secure. It is critical to identify and manage all computer systems so that only authorized systems are permitted access to the network. It is just as important to ensure that only authorized software is installed and that unauthorized software is prevented from being executed. Unauthorized, and often insecure, systems and applications typically do not have the latest patches or security updates installed. As a result, they are typically more vulnerable to exploitation.

The following are recommendations for asset management:


Incident Response

Planning and preparing for a cybersecurity incident is one of the greatest challenges faced by any organization. When a cybersecurity incident occurs, it is time to take action and mitigate – as quickly as possible – any threat to the confidentiality, integrity, and availability of an organization’s information assets.

Cyber incident management helps mitigate the risks associated with internal and external threats, as well as helping an organization maintain regulatory compliance where required. An organization must be prepared to handle incidents that may originate from a variety of sources. Sources for cybersecurity incidents include insiders who act with malicious intent, trusted insiders whose acts cause damage by mistake, and attacks from cybercriminals.

The complexity of malware and the sophistication of cyber criminals’ techniques continue to increase rapidly and, as a result, cybersecurity incidents are becoming more commonplace. Organizations face an uphill battle against cyber criminals who, given enough time and money, can breach the most sophisticated safeguards. Organizations need to perform due diligence and take reasonable measures to respond appropriately in the event of a cybersecurity incident. A poorly executed incident response has the potential to cause an organization significant financial losses, ruin its reputation, and perhaps even drive it out of business altogether. xvii

Therefore, creating and implementing an incident response plan is necessary to quickly detect incidents, minimize loss and destruction, mitigate information system weaknesses, and recover from a potential cybersecurity incident.

The following are some of the objectives of cybersecurity incident management:

Avoid cybersecurity incidents before they occur
Minimize the impact of cybersecurity incidents to the confidentiality, availability, or integrity of the investment                   industry’s services, information assets, and operations
Mitigate threats and vulnerabilities as cybersecurity incidents are occurring
Improve cybersecurity incident coordination and management within the investment industry
Reduce the direct and indirect costs caused by cybersecurity incidents
Report findings to executive management

Cybersecurity Key Terms

The definitions below are based on the International Standard for Information Security Incident Management (ISO/IEC 27035).xviii

Cybersecurity Event

A single or a series of unwanted or unexpected information security events that have a significant probability of compromising business operations and threatening information security.

Cybersecurity Incident

A single or a series of unwanted or unexpected information security events that have a significant probability of compromising business operations and threatening information security.

Cybersecurity Incident Management

The processes for detecting, reporting, assessing, responding to, dealing with, and learning from cybersecurity incidents.

Cybersecurity Incident Response

The actions are taken to protect and restore the normal operating conditions of an information system and the information stored in it when a cybersecurity incident occurs.

Cybersecurity Incident Response Team (IRT)

A team of appropriately skilled and trusted members of the organization that handles incidents during their lifecycle. Once you have detected a cyber incident, immediately contact your legal counsel for guidance on initiating these ten steps: xx

1. The first phase involves Planning and Preparing for a cybersecurity incident so that your organization is prepared for a cybersecurity incident when one arises.

2. The Detect and Report phase involves the continuous monitoring of information sources, the detection of a cybersecurity event, and the collection and recording of information associated with the event.

3. The Assess and Decide phase involves assessing cybersecurity events and deciding whether or not an actual cybersecurity incident has occurred.

4. The Respond phase involves containing, mitigating, and recovering from a cybersecurity incident.

5. The Post-Incident Activity involves learning from the incident and making changes that improve the organization’s security and processes.

Information Sharing and Breach Reporting

Privacy Breach Notification

In almost all countries governments required to organizations to notify of “any breach of security safeguards involving personal information under the organization’s control, if it is reasonable in the circumstances to believe that the breach creates a real risk of significant harm to an individual.” Governments provide fines about knowing violations of the breach notification requirements, and the requirement that organizations keep and maintain a record of every breach of security safeguards involving personal information under the organization’s control.

Information sharing

Cyber-threats are global in nature and not restricted to any one company, industry, or market. Information sharing is an essential element of an effective cybersecurity program. Increasingly within the financial sector, cybersecurity is viewed by market participants as a collective good. Doubts about the integrity of one market participant can quickly shift to others. There is a willingness to participate in the sharing of cyber best practices and threat intelligence among members of the financial sector.

The Digital Privacy Act also contains more permissive language than prior statutes to enable organizations to share information amongst themselves for the purposes of detecting or suppressing fraud that is likely to be committed. It is also more permissive for sharing information in furtherance of an investigation a breach of an agreement or a contravention of the international laws that has been or is reasonably expected to be, committed. While prior legislation required the existence of an accredited investigation body, this legislation appears to permit industries to more effectively exchange relevant cybersecurity as well as other security-related information to protect their interests. The Canadian securities industry as well placed to follow the banking and life insurance industries to establish both ad hoc and structured information sharing arrangements to support companies’ cybersecurity programs.

Information sharing is an essential tool for mitigating cyber threats. It spans strategic, tactical, operational, and technical levels, as well as all phases of the cyber incident response cycle. It crosses the boundary of public and private domains. Finally, it can concern sensitive information, which can be potentially harmful for one organization, while being very useful to others.xxi

For companies, there are a variety of opportunities and forums for engaging in proactive cyber information sharing. Almost all governments have some kind of Cyber Incident Response Centre for the express purpose of facilitating cyber information exchange across the industry and with the government. This kind of centers can provide invaluable assistance to companies that have encountered a cyber threat.

The Financial Services Information Sharing and Analysis Center (FS-ISAC) is a global information sharing resource focused upon cyber and physical threats to the international financial community. FS-ISAC is continually looking for threat data, from its members and which might affect its members, in order to proactively warn of potential threats.

The foregoing examples are just two of a variety of communities operating to effectively share cybersecurity information and best practices. These information sharing communities operate on the principle that effective cybersecurity is a collective good and one institution’s security incident is the community’s early warning report. Companies are encouraged to support these communities with relevant incident reports and to leverage information received through information sharing to optimize their cybersecurity programs.

Microsoft makes the following eight recommendations for information sharing.xxii

1. Develop a strategy for information sharing and collaboration.

a.    An information sharing strategy can help organizations: identify priorities,
establish shared values, and plan to build effective information sharing processes.

b.   The information sharing strategy should contain answers to the following questions:

i. Who needs to share information, and who can resolve the issues that emerge?

ii. What information is being shared, and what is the purpose of sharing it?

iii. What is the impetus behind information sharing? Is it shared voluntarily or a regulated requirement?

iv. What is the organizational structure for sharing information?

v. How is the information actually shared securely?

vi. How is an information exchange structured to ensure that it delivers the greatest value?

2. Design with privacy protections in mind.

Information sharing efforts must respect privacy, and should be designed with the aim of protecting this to the highest degree.

3. Establish a meaningful governance process.
Ensuring that members follow information sharing rules is essential to the credibility of the effort and builds trust. A meaningful governance process should include appropriate management of the data shared, from its creation and release to its use and destruction.

4. Focus sharing on the actionable threat, vulnerability, and mitigation information.  Sharing actionable      information empowers organizations to improve their defense of networks and mitigate threats.

5. Build interpersonal relationships.
Building trust between information sharing participants, along with trust in the program itself, is critical. The more that information sharing participants act in good faith, the more likely other participants are to share information on threats and vulnerabilities.

6. Require mandatory information sharing only in limited circumstances.
In some instances, such as in the case of national security and public safety, there may be a need for mandatory incident reporting. Such mandatory approaches should be narrowly defined and implemented through trusted mechanisms.

7. Make full use of information shared, by conducting analyses on long-term trends.
An analysis of trends gleaned from shared information can help build knowledge of long-term trends, giving network defenders a better understanding of emerging cyber threats and helping them defend against or prevent future threats.

8. Encourage the sharing of best practices.
The exchange of best practices with peer organizations can allow organizations to play a proactive role, by engaging with each other as well as external organizations.

Cyber Insurance

Coverage for data breaches under traditional commercial policies has become increasingly uncertain. In the early 2000s, insurers began to offer insurance policies specifically geared towards protecting against financial losses from data breaches.

Types of risks and potential losses include:
• Identify theft
• Business interruption
• Damage to reputation and goodwill
• Investigation and remediation costs
• Restoration of property costs
• Theft of digital assets
• Malware and viruses
• Human error
• Litigation costs

Insurance coverage for certain losses may be available under existing traditional insurance policies:
• Directors and Officers (D&O)
• Errors and Omissions (E&O) / Professional Liability
• Crime / Theft
• Property
• Commercial General Liability (CGL)

In many cases, traditional insurance coverage does not cover the full range of risks and potential losses posed by cyber risks. When reviewing potential insurers, it is important to be aware that this sub-specialty remains in the formative stages, thus there are no standard policy terms within the industry.

A best practice is to carefully review existing company and D&O insurance policy provisions as they relate to data breach and privacy claims, and ensure that such claims are not excluded. As part of a comprehensive cybersecurity strategy, determine the type and extent of coverage that best serves the interests of the firm, and seeks a tailored package of insurance that covers the full range of potential exposure to which a cyber-incident would subject the firm.

Retroactive coverage is a key consideration. Cyber-breaches can go months if not years without detection, thus members should consider that they may have already been the victim of an undetected breach at the time that they are seeking coverage. In some cases, insurers may be willing to provide retroactive coverage for up to two years before writing the policy. This feature is highly dependent upon the unique risk profile of the potential insured party and the nature of their pre-existing cybersecurity program.

Typical coverage offered within cyber policies currently may include:

Vendor Risk Management

The number of security incidents at companies that are attributed to client systems, partners and vendors have risen from 20 percent in 2010 to 28 percent in 2012. xxiii Perhaps the best-known example of vendor risk was the massive 2013 data breach at Target Corp, where hackers gained access to Target’s credit card data through third-party heating and air conditioning contractor. Up to 40 million credit and debit card numbers were exposed in that breach.

The essential elements of a vendor risk management program include risk ranking vendors, developing clear policies which vendors are expected to adhere to, making conditions explicit within contracts, and establishing a program to verify the performance of vendors.

It is virtually impossible to find a business today that does not rely on third-party vendors. Given the cyber risks that third-party vendor relationships pose, firms impute the security practices of those vendors into their own risk profile. The U.S. Office of the Comptroller of the Currency (OCC) developed an excellent framework upon which to develop an effective vendor risk management program (see Figure 6 above). This lifecycle model highlights the key preliminary planning, diligence, and negotiations steps to ensure that vendors adhere to the firm’s security policies. While ongoing monitoring is critical, so too is planning for the termination of the
relationship to ensure that access to networks is severed and confidential data is returned.

A best practice is to approach vendor risk management in a tiered fashion with highest risk relationships approached first. Vendor Stratificationxxiv can be approached with the following considerations:

Service Risks:

The volume of financial transactions processed
Concentration associated with service
Sensitivity risk of the data to which the vendor could potentially have access
Compliance and regulatory risk related to the service
Customer and financial impact

Vendor Risks:

Location of the vendor (subject to multinational laws, regulations, etc.)
Previous data or security breaches
The extent of outsourcing performed by the vendor
Performance history

Common Deficiencies with 3rd Party Vendors: 

  • Incident Response Management Plan
  • Inadequate Security Awareness
  • Data Loss Prevention
  • Encryption for data at rest and in transit
  • Administrator Privilege Lockdown
  • Vulnerability testing or penetration testing

Common Approaches to Evaluating Third Party Vendors Include:

  • Questionnaires incorporated into RFPs
    • See Appendix B for a Sample Vendor Assessment Questionnaire.
  • Requests for documentation from potential vendors
    • For examples of types of documentation, see Appendix B for a Sample Vendor Assessment Questionnaire.
  • Desk assessments to evaluate requested information
  • On-site visits as appropriate by either in-house or contacted experts
  • Penetration tests of potential vendors

To be successful, vendor risk management should be an element of an enterprise risk management program with established, repeatable processes in place that are consistent for all areas within the firm.

Cloud Computing

In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of on a computer hard drive.xxv While there are many advantages to cloud-based computing, it carries with it risks that are similar to those associated with outsourcing to third-party vendors; however, unlike third-party vendors, a cloud vendor’s primary business is the storage of critical applications and sensitive data. As a result, security and data privacy are the top concerns of most firms considering their use. Firms should consider the risks and threats involved, in addition to the amount of risk that they are willing to accept. Risks include data or application unavailability, data loss, theft, and the unauthorized disclosure of sensitive information.

In addition to the risk mitigation guidance outlined in the Vendor Management section, firms considering the use of cloud services should look for a provider with the following characteristics: xxvi

• A significant history in the cloud services industry who can provide solid business references
• The provider clearly outlines its mitigating controls for handling risk – controls related to security, availability,                   processing integrity, confidentiality, and privacy
• They allow auditing and the verification of controls
• They are certified or recognized by one or more security standards authorities
• Their backup procedures, business continuity plans, and disaster recovery plans meet your firm’s requirements

Cyber Policy

A cybersecurity program is defined by its underlying policy. The firm’s security policy is the articulation of the organization’s objectives agreed upon by management that establish those requirements that must be followed. Rather than guidance, the policy establishes mandatory conduct.

Creating a security policy requires management to articulate what they believe is necessary and what risks they are willing to accept. Rather than merely “downloading” a security policy template, a best practice is to engage firm leadership in an education process regarding security risks in order to develop an informed consensus amongst firm leadership and with it, the authority upon which to develop and deliver the cybersecurity strategy.

Security policy, as opposed to cybersecurity policy, is a term deliberately used. Security comprises physical security, personnel security, cybersecurity, as well as supporting business continuity practices. While this guide is focused upon cybersecurity, effective cybersecurity cannot be achieved absent an integration of the other security disciplines.

Key elements of a policy include:

• Scope – all information, systems, facilities, programs, data networks, and all users of technology in the organization (both internal and external), without exception
• Information classification – should provide content-specific definitions, rather than more generic “confidential” or “restricted”
• Management goals for secure handling of information in each classification category
• Placement of the policy in the context of other management directives and supplementary documents
• References to supporting documents, including industry standards and guidelines
• Specific instruction on organization-wide security mandates (e.g. no sharing of passwords)
• Specific designation of established roles and responsibilities
• Consequences for non-compliance (e.g. up to and including dismissal or termination of contract) xxvii

The implementation of a policy is not a single event, but rather an iterative process revisited as business models, relationships, and technology changes. Absent policy, there can be no effective governance of the cybersecurity program as there can be no clear guidance upon which to make program decisions.

Appendix A – Cybersecurity Incident Checklist

These following are the processes and procedures that need to be in place before, during, and after a cybersecurity incidentxxviii:


  • Record the issues and open an incident report.
  • Convene the Incident Response Team.
  • Convene a teleconference with requisite stakeholders to discuss what must be done in order to restore operations.
  • Convene a management teleconference with requisite stakeholders in order to provide situational awareness to                  executive management.
  • Triage the current issues and communicate to executive management.
  • Identify the initial cause of the incident and activate the specialists to respond to the current issues to restore operations.
  • Retain any evidence and follow a strict chain of evidence to support any needed or
    anticipated legal action.
  • Communicate to affected third parties, regulators, and media (if appropriate).


  • Update the incident report and review exactly what happened and at what times.
  • Review how well the staff and management performed in during the incident.
  • Determine whether or not the documented procedures were followed.
  • Discuss any changes in process or technology that are needed to mitigate future incidents.
  • Determine what information was needed sooner.
  • Discuss whether any steps or actions taken might have inhibited the recovery.
  • Determine which additional tools or resources are needed to detect, triage, analyze, and mitigate future incidents.
  • Discuss what reporting requirements are needed (such as regulatory and customer).
  • If possible, quantify the financial loss caused by the breach.

Appendix B – Sample Vendor Assessment

Adapted from the University of British Columbia’s Third-Party Assessment Questionnairexxix.

The original copy is available at the following
address: ecurity%20Assessment%20Questionnaire%20V1.4.xlsx

Additional sources:
• ISACA’s Vendor Management using COBIT 5xxx and
• Cloud Security Alliance’s Consensus Assessments Initiative Questionnaire V3.0.1 xxxi

Appendix C – Glossary

In the following we provide the reader with an understanding of the key terms used in this document.

  • Assets: Any items belonging to or held by the business with some value (including information, in all forms and computer systems).
  • Attack: An attempt to gain unauthorized access to business or personal information, computer systems or networks for (normally) criminal purposes. A successful attack may result in a security breach or it may be generically classified as an “incident.”
  • Authentication: A security practice implemented (usually through software controls) to confirm the identity of an individual before granting them access to business services, computers or information.
  • Backup: The process of copying files to a secondary storage solution, so that those copies will be available if needed for a later restoration (e.g., following a computer crash).
  • Breach: A security breach is a gap in security that arises through negligence or deliberate attack. It may be counter to policy or the law, and it is often exploited to foster further harmful or criminal action.
  • Cyber: Relating to computers, software, communications systems and services used to access and interact with the Internet.
  • Encryption: Converting information into a code that can only be read by authorized persons who have been provided with the necessary (and usually unique) “key” and special software so that they can reverse the process (e.g., decryption) and use the information.
  • Firewall: A firewall is a type of security barrier placed between network environments. It may be a dedicated device or a composite of several components and techniques. Only authorized traffic, as defined by the local security policy, is allowed to pass.
  • Identity Theft: Copying another person’s personally identifying information (such as their name and Social Insurance Number) and then impersonating that person to perpetrate fraud or other criminal activity.
  • Malware: Malicious software created and distributed to cause harm. The most common instance of malware is a “virus.”
  • Patch: An update to or repair for any form of software that is applied without replacing the entire original program. Many patches are provided by software developers to address identified security vulnerabilities.
  • Password: A secret word or combination of characters that is used for authentication of the person that holds it.
  • Phishing: A specific kind of spam targeting one or more specific people while pretending to be a legitimate message, with the intent of defrauding the recipient(s).
  • Risk: Exposure to a negative outcome if a threat is realized.
  • Safeguard: A security process, physical mechanism or technical tool intended to counter specific threats. Sometimes also referred to as a control.
  • Server: A computer on a network that acts as a shared resource for other network-attached processors (storing and “serving” data and applications).
  • Spam: Email that has been sent without the permission or request of you or the employee it has been sent to.
  • Threat: Any potential event or action (deliberate or accidental) that represents a danger to the security of the business.
  • VPN: Virtual Private Network.
  • Vulnerability: A weakness in software, hardware, physical security or human practices that can be exploited to further a security attack.
  • Wi-Fi: A local area network (LAN) that uses radio signals to transmit and receive data over distances of a few hundred feet.


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