23 NYCRR 500 Overview
23 NYCRR 500, also known as the NYDFS Cybersecurity Regulation, is a New York State law issued by the Department of Financial Services (NYDFS). It establishes mandatory cybersecurity requirements for financial institutions and regulated entities operating under NYDFS supervision.
The regulation aims to protect the confidentiality, integrity, and availability of information systems by ensuring that covered organizations implement a robust cybersecurity program capable of identifying, mitigating, and responding to evolving cyber threats.
Purpose of 23 NYCRR 500
The goal of 23 NYCRR 500 is to strengthen the cybersecurity posture of financial organizations and safeguard consumers’ non-public information (NPI). Unlike voluntary frameworks, it is a legally binding regulation requiring covered entities to maintain documentation, governance, and technical safeguards that meet the NYDFS standard.
The regulation emphasizes:
Governance and accountability through board-level oversight.
Risk-based programs tailored to each institution’s operations.
Incident response preparedness and rapid breach notification.
Continuous compliance through annual certification to NYDFS.
By enforcing these principles, 23 NYCRR 500 seeks to enhance resilience across New York’s financial sector and ensure that organizations can withstand and recover from cybersecurity events.
Scope and Applicability
The regulation applies to “covered entities” supervised by NYDFS, including:
Banks, credit unions, and trust companies.
Insurance companies and brokers.
Mortgage lenders and servicers.
Virtual-currency businesses and money transmitters.
Any other financial institutions regulated by the Department.
Third-party service providers that handle or process sensitive information on behalf of covered entities are also subject to specific vendor-management requirements.
What the Framework Covers
23 NYCRR 500 requires organizations to implement a comprehensive cybersecurity program that includes:
Cybersecurity Policy: Documented policies approved by senior management outlining data protection, incident response, and system monitoring.
CISO Appointment: Designation of a qualified Chief Information Security Officer responsible for the program’s oversight.
Risk Assessment: Periodic evaluations of internal and external risks to information systems.
Access Controls: Role-based access and multi-factor authentication.
Penetration Testing and Vulnerability Assessments: Regular evaluations to identify weaknesses.
Audit Trail Maintenance: Logging of activities and retention of records for regulatory review.
Third-Party Risk Management: Written policies for assessing and monitoring vendors.
Training and Awareness: Programs to educate employees on security responsibilities.
Incident Response and Notification: Procedures for detecting, responding to, and reporting events to NYDFS within 72 hours.
Certification and Enforcement
Covered entities must annually certify compliance with 23 NYCRR 500 to NYDFS by filing a certification of compliance or an acknowledgment of non-compliance with a remediation plan.
NYDFS conducts supervisory examinations and may impose civil penalties for violations. Maintaining documentation and evidence of compliance is essential for regulatory review.
Implementation and Continuous Compliance
Organizations must maintain a dynamic cybersecurity program that evolves alongside threats and business changes. This includes:
Conducting regular risk assessments and control reviews.
Testing business continuity and disaster recovery capabilities.
Updating policies as technology and regulations evolve.
Maintaining secure data retention and disposal practices.
Periodic reviews by the CISO and board ensure ongoing alignment with NYDFS requirements.
23 NYCRR 500 in DSALTA
DSALTA enables organizations to manage their 23 NYCRR 500 obligations through mapped controls, evidence tracking, and automated readiness monitoring.
Users can:
Assign ownership for NYDFS controls.
Upload risk assessments, penetration tests, and audit records.
Monitor evidence renewal dates and policy approvals.
Generate audit-ready reports aligned with regulatory expectations.
While DSALTA supports operational compliance tracking, organizations should work closely with their legal and compliance teams to ensure all NYDFS regulatory filings and governance obligations are met.