SEC's Stein Wants More Cyber Rules for Advisors, BDs

She's asked Clayton to prioritize what she calls Regulation SCI 2.0.

The securities regulator has long encouraged written policies and procedures, voluntary frameworks and codes of conduct to deal with cyber threats — but the industry is now facing a "cyber war," Stein says.

The cost of cybercrime to businesses: The World Economic Forum states it will climb over the next five years to $8 trillion per year.

Nonbinding guidance and advice to market participants is helpful, Stein said, but "both government and businesses are in a new world."

What's needed? A more comprehensive take on "the cyber wars going on. All need to up their game to protect our critical systems, personal data and economy from cyber threats. Tepid responses from government and businesses are invitations that cybercriminals simply cannot ignore."

We've heard of fintech – financial services firms that serve clients via technology — and even regtech. Now there's "techfin": technology companies that are beginning to enter the financial services space.

Stein points to a paper, "From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance," that zeros in on new entrants to the financial sector — such as pre-existing technology and e-commerce companies — that have large pre-existing customer bases outside of financial services.

Loosely termed "techfins," these firms have the capacity to "leverage the data gathered in their primary business into financial services."

In other words: "Techfins represent an Uber moment in finance," the paper asserts, with the "shift from financial intermediary (fintech) to data intermediary (techfin) raises implications for incumbent financial services firms, fintech startups and regulators."