Privacy in Financial Services
Trading platforms handle some of the most sensitive data imaginable: financial transactions, trading strategies, account balances, and identity documents. My privacy policy isn't just a legal formality—it's a critical trust document.
Unlike general websites, trading platforms face multiple overlapping privacy regimes:
- General Privacy Laws - CCPA, state consumer privacy laws
- Financial Privacy Laws - Gramm-Leach-Bliley (GLBA), Reg S-P
- Industry Standards - SEC/FINRA requirements for data protection
- International - GDPR if I have EU users
⚠ Financial Privacy is Stricter
If I'm a registered RIA or BD, I'm subject to Regulation S-P under the SEC/FINRA. This is separate from and in addition to general consumer privacy laws like CCPA.
Applicable Privacy Laws
🇺🇸 Gramm-Leach-Bliley Act (GLBA)
Applies to "financial institutions" including investment advisers and broker-dealers.
- Requires privacy notice at account opening and annually
- Must describe information sharing practices
- Opt-out rights for sharing with non-affiliates
- Safeguards Rule for data security
📊 Regulation S-P (SEC/FINRA)
Implements GLBA for SEC-registered entities.
- Initial and annual privacy notices required
- Specific content requirements for notices
- Consumer opt-out rights
- Disposal rule for consumer information
🏳 California Consumer Privacy Act (CCPA/CPRA)
Applies to businesses meeting certain thresholds with California users.
- Right to know what data is collected
- Right to delete personal information
- Right to opt-out of "sale" of data
- Right to non-discrimination
- Financial incentive disclosures
🇪🇺 GDPR (If EU Users)
Applies if I process EU resident data.
- Lawful basis for processing
- Data subject rights (access, erasure, portability)
- Privacy by design requirements
- Data protection impact assessments
- Cross-border transfer restrictions
Data Trading Platforms Collect
My privacy policy needs to accurately describe all data I collect:
Identity Data
Name, DOB, SSN, government ID, photos for KYC
Contact Data
Email, phone, mailing address
Financial Data
Account balances, transactions, payment methods
Trading Data
Orders, positions, strategies, performance
Technical Data
IP address, device info, browser, API keys
Usage Data
Feature usage, session data, analytics
💡 API Keys & Strategies
If users connect exchange API keys or share trading strategies through my platform, these are highly sensitive data that deserve specific attention in my privacy policy.
Required Privacy Disclosures
For All Trading Platforms
| Disclosure | Description |
|---|---|
| Categories of data collected | What personal information I collect |
| Purposes of collection | Why I collect each category |
| Data sharing | Who I share data with and why |
| Retention periods | How long I keep data |
| Security measures | How I protect data |
| User rights | How to exercise privacy rights |
| Contact info | How to reach me with questions |
Additional Requirements for RIAs/BDs (Reg S-P)
- Categories of nonpublic personal information I collect
- Categories of affiliates and non-affiliates I share with
- Categories of former customer information I disclose
- Explanation of opt-out rights and how to exercise them
- Disclosure of whether I share with non-affiliated financial companies for marketing
CCPA-Specific Requirements
- Categories collected in last 12 months
- Categories of sources of data
- Business purpose for collection
- Categories of third parties data is shared with
- "Do Not Sell My Personal Information" link
- Financial incentives disclosure if applicable
Regulation S-P Deep Dive
If I'm SEC-registered, Reg S-P has specific requirements:
Initial Privacy Notice
Must be delivered to customers at time of establishing relationship. The notice must be:
- Clear and conspicuous
- Accurate in describing practices
- Delivered in a form the customer can retain
Annual Privacy Notice
Required annually (though a 2018 amendment provides an exception if practices haven't changed). Must be delivered to all customers who still have a relationship.
Opt-Out Requirements
Before sharing nonpublic personal information with nonaffiliated third parties, I must:
- Provide clear notice of the sharing
- Offer a reasonable means to opt out
- Give reasonable time to opt out before sharing
✅ Reg S-P Short-Form Option
I can use a simplified short-form initial notice if I don't share information with non-affiliates (other than as permitted by certain exceptions).
Data Security Requirements
Privacy policies should reflect actual security practices:
GLBA Safeguards Rule
Financial institutions must develop, implement, and maintain a comprehensive information security program:
- Designate employee(s) to coordinate the program
- Identify reasonably foreseeable internal and external risks
- Design and implement safeguards to control identified risks
- Regularly test and monitor safeguards
- Oversee service provider security
- Adjust the program as needed
What to Disclose About Security
- Encryption (at rest, in transit)
- Access controls
- Multi-factor authentication availability
- Monitoring and logging
- Incident response procedures
- Employee training
Common Data Sharing Scenarios
| Recipient | Purpose | Disclosure Needed |
|---|---|---|
| Clearing/Execution Brokers | Trade execution | Yes - necessary for service |
| KYC/AML Providers | Identity verification | Yes - security purpose |
| Analytics Providers | Usage analytics | Yes - describe what's shared |
| Cloud Providers | Infrastructure | Yes - as service providers |
| Regulators | Legal compliance | Yes - legal obligations |
| Affiliates | Cross-marketing | Yes - with opt-out if financial |
User Rights to Include
Depending on applicable laws, my policy should explain these rights:
| Right | CCPA | GDPR | Reg S-P |
|---|---|---|---|
| Access/Know | ✔ | ✔ | Limited |
| Deletion | ✔ | ✔ | ✘ |
| Correction | ✔ | ✔ | ✘ |
| Portability | ✔ | ✔ | ✘ |
| Opt-Out of Sale | ✔ | N/A | ✘ |
| Opt-Out of Sharing | Limited | Limited | ✔ |
| Non-Discrimination | ✔ | ✔ | ✘ |
Data Retention for Trading Platforms
Financial services have unique retention requirements:
- Reg S-P: Privacy notices and opt-out records retained as long as customer relationship exists
- Books and Records: Transaction records typically 5-7 years
- AML Records: 5 years after relationship ends
- Tax Records: At least 7 years
- Dispute Records: Until statute of limitations expires
💡 Retention Conflicts
CCPA gives users deletion rights, but financial regulations may require me to retain data. My policy should explain that deletion requests are subject to regulatory retention requirements.
Privacy Policy Structure
Recommended sections for a trading platform privacy policy:
- Introduction & Scope - What the policy covers
- Information Collected - Categories and sources
- How Information is Used - Purposes of processing
- Information Sharing - Who receives data and why
- Cookies & Tracking - Technical data collection
- Data Security - Protection measures
- Data Retention - How long data is kept
- Your Rights - Privacy rights and how to exercise
- Children's Privacy - Age restrictions
- International Transfers - If applicable
- Changes to Policy - Update procedures
- Contact Information - How to reach me
Privacy Notice Delivery
For Reg S-P
- Initial: At establishment of customer relationship
- Annual: Within 12 months of previous notice (with exceptions)
- Format: Written or electronic with consent
For CCPA
- Must be available at point of data collection
- Link in website footer
- Updated at least annually