NY DFS Cybersecurity Assessment
Frequently Asked Questions
Answers for GCs, compliance officers, and CISOs at New York-licensed financial institutions about Law & Forensics' 23 NYCRR Part 500 assessment and remediation practice — including the 2023 Second Amendment requirements. Contact us for a confidential consultation.
NY DFS 23 NYCRR Part 500 Assessment
What 23 NYCRR Part 500 requires after the Second Amendment, who is covered, what the CISO must certify, and what an enforcement-grade assessment looks like.
Who is subject to 23 NYCRR Part 500?
Every entity operating under a license, registration, charter, or similar authorization from the New York Department of Financial Services — banks, insurers, mortgage lenders, money transmitters, and virtual currency companies.
The Second Amendment (effective November 2023) added a Class A Companies tier — covered entities with at least $20M in NY revenue and either 2,000+ employees or $1B+ in gross global revenue — with heightened requirements including independent audits, privileged-access management, and endpoint detection.
What does Law & Forensics' NY DFS assessment cover?
Every requirement in Part 500 — risk assessment, cybersecurity program, written policies, CISO designation, penetration testing and vulnerability assessments, access privileges, MFA, training, third-party service provider security, and incident notification.
For Class A Companies we also assess independent audit posture, endpoint detection and response (EDR), privileged access management (PAM), and the password-policy and asset-inventory enhancements added by the Second Amendment.
What is the annual CISO certification, and how do you support it?
Section 500.17(b) requires either a Certification of Material Compliance or a written Acknowledgment of Non-Compliance with a remediation plan, signed by the CISO and the highest-ranking executive, filed with DFS by April 15 each year.
We build the documentary record that supports either filing — control evidence, gap analysis, remediation tracking, and board minutes — and advise on whether a Material Compliance certification is defensible or whether an Acknowledgment is the safer path. False certifications have driven recent DFS enforcement actions.
What are the NY DFS cybersecurity event notification requirements?
72 hours for a reportable cybersecurity event, plus 24 hours for a ransom payment notification and 30 days for a follow-up payment-justification report.
Section 500.17(a) defines "cybersecurity event" broadly — it includes attacks on third-party providers and unsuccessful attacks that should reasonably have been reported to a regulator or third party. Our incident response team coordinates the DFS notification alongside parallel state, federal, and law-enforcement reporting.
How does the NY DFS rule treat third-party service providers?
Section 500.11 requires a written third-party service provider security policy covering due diligence, access controls, encryption, MFA, incident notification, and periodic reassessment.
Recent DFS enforcement has focused heavily on third-party-driven breaches — including the LastPass-related cases. Our vendor due diligence service is calibrated to Part 500.11 requirements.
How often does Part 500 require penetration testing and vulnerability assessment?
Annual penetration testing, automated vulnerability scans on a continuous basis, and manual review at a frequency informed by your risk assessment.
The Second Amendment specifically requires penetration testing by a "qualified internal or external party." We coordinate with your testing provider or perform the work ourselves, then translate findings into Part 500-aligned remediation plans suitable for the CISO's annual report to the board.