Under SEC Regulation S-P, if a registered broker-dealer decides to change its privacy policy so that it can begin sharing nonpublic personal customer information with nonaffiliated third parties under terms not previously disclosed, which requirement must the firm satisfy before disclosing the information?
- Provide the customer with a revised privacy notice and a reasonable opportunity to opt out before the information is disclosed.Answer
- BObtain explicit written opt-in authorization from the customer prior to releasing any nonpublic personal information.
- CNotify the customer within 30 days after the information has been transmitted to the nonaffiliated entities.
- DIssue an updated privacy disclosure only upon the next scheduled annual notice delivery date.
Answer
Provide the customer with a revised privacy notice and a reasonable opportunity to opt out before the information is disclosed.
Under SEC Regulation S-P, if a broker-dealer changes its privacy policy to allow sharing of nonpublic personal information with nonaffiliated third parties not covered under a previous notice, it must provide a revised privacy notice and a reasonable opportunity to opt out before disclosing the information.
Step-by-Step Solution
Key Concept
Regulation S-P Revised Privacy Notice and Opt-Out Timing