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FTC Approves Amendment to Safeguards Rule

The Federal Trade Commission (“FTC”) has announced new amendments to the Safeguards Rule to go into effect 180 days after publication in the Federal Register. Over the last few years we have reported on amendments to the Safeguards Rule. See, e.g. our Alerts dated Nov. 17, 2021 and Oct. 5, 2022. Notably in 2021 the FTC amended the Safeguards Rule to, among other things, expand the definition of “financial institution” to include entities engaged in activities the Federal Reserve Board determines to be incidental to financial activities, which adds “finders”—companies that bring together buyers and sellers of a product or service—within the scope of the Rule. The 2021 amendments also added provisions to provide more guidance on how to develop and implement aspects of an information security program, such as access controls, authentication and encryption. Most of the 2021 amendments went into effect in December 2022. Read More