NEWPORT BEACH, Calif. — A proposed change from the SEC regarding the Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information may have an impact on investment representatives' relationships with members, the National Association of Credit Union Service Organizations has discovered.

The SEC's proposed amendments would set forth more specific requirements for safeguarding information and responding to information security breaches. Under SEC's recommendations, the agency would permit a limited transfer of information to a nonaffiliated third party without the required notice and opt out when personnel move from one broker-dealer or registered investment adviser to another. The amendments would also broaden the scope of the information covered by Regulation S-P's safeguarding and disposal provisions extending them to natural persons associated with brokers, dealers and transfer agents registered with the commission.

Guy Messick, general counsel for NACUSO, said page 40 of the proposal describes the protocol when a registered representative leaves one brokerage firm for another. The bulk of a representative's business is referred to them by the bank and credit union and such information is often treated as trade secrets with the representative acknowledging that the representative does not own the book of business, he said.