On December 4, 2015, President Obama signed into law the Fixing America’s Surface Transportation Act (FAST Act). Although the overall purpose of the FAST Act is not securities regulation, it has one very important impact on investment firms: every registered investment adviser, mutual fund, and broker-dealer currently distributing privacy notices is impacted by Section 75001 of the Act.
The FAST Act contains a provision that modifies the Gramm-Leach-Bliley Act (GLBA).
In summary, the provision allows for financial institutions covered under GLBA to be exempt from the annual delivery of privacy notices to customers as long as two basic conditions are met:
- The financial institution only provides nonpublic personal information about its customers to nonaffiliated third parties that require the information in order to perform specific services and functions on behalf of the financial institution, and the third party is contractually required to maintain the confidentiality of customer information; and
- The financial institution has not changed its privacy policies since the last distribution of privacy notices to customers.
The new exception is effective immediately so before you send out those year-end annual notices… think again.
View FAST Act Section 75001, “Eliminate Privacy Notice Confusion.”