# Control 3.9: Microsoft Sentinel Integration

**Control ID:** 3.9<br>
**Pillar:** Reporting<br>
**Regulatory Reference:** FINRA Rule 4511 (books and records), SEC Rules 17a-3 / 17a-4 (recordkeeping, WORM), NYDFS 23 NYCRR 500.06 (audit trail) / 500.16 (incident response plan) / 500.17 (notification), FFIEC IT Examination Handbook (Audit; Information Security), OCC Bulletin 2026-13 (formerly OCC Bulletin 2011-12) / Federal Reserve SR 26-2 (formerly SR 11-7) (Model Risk Management — monitoring obligations on AI agents), CISA BOD 22-09 (event logging — informative benchmark for private-sector firms), FINRA RN 24-09 + Rule 3110, SOX 404<br>
**Last UI Verified:** May 2026<br>
**Governance Levels:** Baseline / Recommended / Regulated<br>

---

## Objective

Integrate AI agent monitoring with Microsoft Sentinel SIEM/XDR capabilities for enterprise-grade security visibility, automated threat detection, and centralized incident response. This control supports proactive security monitoring of agent behavior patterns and rapid response to anomalies through connector-based ingestion, KQL analytics, workbooks, and Logic Apps playbooks.

!!! warning "Scope Limit — Operational Monitoring, Not Books-and-Records"
    Microsoft Sentinel and Azure Monitor support security monitoring, alerting, investigation, and incident-response evidence retention. They should **not** be treated as a substitute for **Microsoft Purview** retention / eDiscovery or for any **immutable books-and-records controls** required under **FINRA Rule 4511** and **SEC Rules 17a-3 / 17a-4**. Sentinel alerts and workbook evidence complement — but do not replace — supervisory review (Control 2.12), model risk management (Control 2.6), incident reporting (Control 3.4), orphaned-agent remediation (Control 3.6), and content-level retention (Control 1.7 / Pillar 4).

---

## Why This Matters for FSI

- **FINRA Rule 4511 / SEC 17a-3 / 17a-4:** Sentinel ingested data supports reconstruction of supervisory events and access anomalies, but the firm's immutable books-and-records retention must be satisfied through Purview retention, WORM-backed archives, or an approved SEC 17a-4(f) vendor — not through Sentinel's operational retention alone.
- **NYDFS 23 NYCRR 500.06 (audit trail) / 500.16 (incident response) / 500.17 (notification):** Sentinel analytics, Logic Apps playbooks, and workbook evidence help satisfy audit-trail, incident-response program, and 72-hour notification requirements for covered entities.
- **FFIEC IT Examination Handbook (Audit / Information Security):** Examiners expect centralized logging, timely detection, and documented response — Sentinel is a primary pattern for meeting those expectations across M365, Entra, Power Platform, and Defender signals.
- **OCC Bulletin 2026-13 (formerly OCC Bulletin 2011-12) / Fed SR 26-2 (formerly SR 11-7) (Model Risk Management):** Continuous monitoring of AI agents (anomalous prompts, data exfiltration, tool-use drift) supports the ongoing-monitoring obligations in Fed SR 26-2 (formerly SR 11-7) §VI — monitoring findings should feed MRM re-validation in Control 2.6.
- **FINRA RN 24-09 (Generative AI / LLM Guidance):** Applies existing supervisory and recordkeeping obligations to AI tools on a technology-neutral basis; centralized telemetry in Sentinel is a primary surface for evidencing supervisory monitoring of AI agents.
- **CISA BOD 22-09 (event logging):** Informative benchmark — the Binding Operational Directive applies to federal civilian agencies, but its EL1–EL3 logging maturity levels are a useful yardstick for private-sector FSI firms.
- **SOX 404:** IT general controls for financial-reporting systems must include security monitoring with documented evidence of alert-to-resolution cycles.

---

!!! info "No companion solution by design"
    Not all controls have a companion solution in [FSI-AgentGov-Solutions](https://github.com/judeper/FSI-AgentGov-Solutions); solution mapping is selective by design. This control is operated via native Microsoft admin surfaces and verified by the framework's assessment-engine collectors. See the [Solutions Index](../../reference/solutions-index.md#coverage-scope) for the catalog and coverage scope.


## Control Description

Microsoft Sentinel integration provides advanced security analytics for AI agents through data connectors, custom analytics rules, automated response playbooks, and proactive hunting capabilities.

!!! info "Integration Options (February 2026)"
    The **primary integration pattern** for ingesting agent-related telemetry into Sentinel is **connector-based ingestion into Log Analytics** using Microsoft 365, Entra, Defender, Power Platform, and optional Application Insights / custom telemetry — governed by KQL analytics rules, workbooks, and Logic Apps playbooks. **Sentinel MCP Server** (GA November 2025) is an **optional analyst/SOC augmentation path** that enables natural-language queries over Sentinel data; it is not a foundational monitoring architecture and is not required.

    | Integration Path | Role | Log Analytics Table |
    |-----------------|------|---------------------|
    | **Power Platform Admin Activity** (primary) | Monitor agent admin events, DLP changes, environment actions | `PowerPlatformAdminActivity` |
    | **Microsoft 365 / Purview Unified Audit Log** (primary) | Copilot interactions, XPIA/jailbreak detections, resource access | `OfficeActivity` (CopilotInteraction) |
    | **Entra ID sign-in + audit** (primary) | Human sign-ins in `SigninLogs`; **agent / service-principal sign-ins in `AADServicePrincipalSignInLogs`** (distinct table — do not assume `SigninLogs` covers workload identities); directory changes in `AuditLogs` | `SigninLogs`, `AADServicePrincipalSignInLogs`, `AuditLogs` |
    | **Microsoft 365 Defender / Defender for Cloud Apps** (primary) | XDR alerts, AI-SPM detections, cloud app activity | `AlertInfo`, `DeviceEvents`, `CloudAppEvents` |
    | **Microsoft Copilot connector** (primary) | Copilot-specific telemetry (prompt/response metadata), anomaly signals | Defender portal > Data connectors |
    | **Application Insights** (optional) | Custom telemetry, conversation transcripts (when enabled), CSAT | `AppTraces`, `AppRequests`, custom tables |
    | **Sentinel MCP Server** (optional augmentation) | Analyst natural-language queries against Sentinel data lake | Sentinel data lake |

| Capability | Description |
|------------|-------------|
| **Data Connectors** | Ingest logs from M365, Power Platform, Entra ID |
| **Analytics Rules** | Detect unusual agent behavior patterns |
| **Workbooks** | Visualize agent security posture |
| **Automation** | Respond to threats automatically |
| **Hunting** | Proactive threat investigation |

**Key Detection Scenarios:**

| Scenario | Detection Method | Response |
|----------|------------------|----------|
| Unusual data access | Baseline deviation | Alert + review |
| DLP violation | Policy match | Alert + suspend |
| After-hours activity | Time-based rule | Alert + log |
| Mass data download | Volume threshold | Alert + block |
| Runtime protection block | XDR alert from Defender/AI-SPM | Alert + investigate |

---

## Key Configuration Points

- Deploy Microsoft Sentinel workspace in dedicated resource group
- Connect data sources: M365 Defender, Entra ID, Microsoft 365, Defender for Cloud Apps
- Enable **Power Platform Admin Activity** connector for administrative events
- Create analytics rules for agent anomalies: unusual access, DLP violations, after-hours activity
- Build workbooks for agent activity visualization and security metrics
- Configure automation rules for high-severity alerts (suspend agent, notify security)
- Develop hunting queries for proactive investigation
- Integrate incident management with Control 3.4

### Three Data Ingestion Pathways

Organizations have three primary pathways for ingesting agent-related telemetry into Sentinel:

| Pathway | Best For | Data Coverage | Setup Complexity |
|---------|----------|---------------|------------------|
| **Power Platform Admin Activity** | Administrative oversight | Environment changes, DLP policy events, agent metadata | Low |
| **Purview Unified Audit Log** | Compliance and interaction monitoring | CopilotInteraction events, XPIA/Jailbreak detections, resource access | Medium |
| **Defender CloudAppEvents** | Security operations | Runtime threat detections, cloud app activity, alert correlation | Medium |

!!! tip "Pathway Selection"
    Most FSI organizations implement all three pathways: Power Platform Admin Activity for governance, Purview UAL for compliance evidence (FINRA 4511), and CloudAppEvents for security operations (OCC Heightened Standards).

### Available Data Sources for Agent Monitoring

| Data Source | Connector | Log Analytics Table | What's Captured |
|-------------|-----------|---------------------|-----------------|
| **Power Platform Admin Activity** | Power Platform Admin Activity | `PowerPlatformAdminActivity` | Admin actions, DLP changes, environment events, agent metadata changes |
| **Purview Unified Audit Log** | Microsoft 365 | `OfficeActivity` (CopilotInteraction) | Agent interactions, XPIA/Jailbreak detections, resource access status, policy blocks |
| **M365 Defender** | Microsoft 365 Defender | `DeviceEvents`, `AlertInfo` | XDR alerts including AI-SPM detections |
| **Entra ID** | Entra ID | `SigninLogs`, `AADServicePrincipalSignInLogs`, `AuditLogs` | Human sign-ins (`SigninLogs`); **agent / workload-identity sign-ins (`AADServicePrincipalSignInLogs`)**; directory and consent-grant changes (`AuditLogs`) |
| **Defender for Cloud Apps** | Defender for Cloud Apps | `CloudAppEvents` | Cloud app activity, shadow IT detection, UPIA/XPIA flags |
| **Application Insights** | Custom (Log Analytics workspace link) | `AppTraces`, `AppRequests` | Agent telemetry, conversation logs, CSAT (requires custom setup) |

### Microsoft Copilot Data Connector (GA)

Microsoft Sentinel now includes a dedicated **Microsoft Copilot** data connector that ingests Copilot-specific telemetry without requiring manual configuration of individual data sources. This connector provides:

- Copilot prompt and response metadata (not content)
- Agent interaction telemetry
- Copilot usage patterns and anomaly detection signals
- Integration with Sentinel analytics rules for automated threat detection

Configure at the **Defender portal** (security.microsoft.com) > **Microsoft Sentinel** > **Data connectors** > **Microsoft Copilot**.

### Sentinel MCP Server Integration (Optional AI-Assisted Query Augmentation)

The Sentinel MCP (Model Context Protocol) Server provides an **optional** natural-language analyst augmentation for SOC teams. It is **not the foundational monitoring path** — connector-based ingestion with KQL analytics, workbooks, and Logic Apps playbooks remains the primary pattern.

**Configuration Steps:**

1. Navigate to **Microsoft Copilot Studio** > Select agent > **Tools**
2. Add the **Sentinel** tool collection from available MCP servers
3. Configure Microsoft Entra authentication for the Sentinel workspace
4. Test with natural language queries (e.g., "Find the top 3 users at risk")

**Capabilities:**

| Feature | Description |
|---------|-------------|
| Natural language queries | Translate security questions to optimized data lake queries |
| Incident investigation | Agent assists with threat analysis and triage |
| Alert summarization | AI-powered summaries of security incidents |
| Hunting assistance | Guided threat hunting with Copilot |

!!! warning "Requirements"
    Sentinel MCP Server requires Microsoft Entra authentication and incurs AI model costs. Data residency follows the connected Sentinel workspace region.

### Custom Integration for Comprehensive Telemetry

For organizations requiring conversation-level monitoring beyond administrative events:

```
Copilot Studio Agent
       ↓
Application Insights (custom telemetry)
       ↓
Log Analytics Workspace
       ↓
Microsoft Sentinel (analytics rules, workbooks)
```

**Implementation Steps:**

1. Configure Application Insights in Copilot Studio agent settings
2. Enable sensitive activity property logging (see warning below)
3. Link Application Insights to Log Analytics workspace
4. Create custom analytics rules against `AppTraces` and custom event tables
5. Build Sentinel workbooks for conversation metrics and CSAT trends

!!! warning "Conversation transcript capture — legal, privacy, and records review required"
    By default, Copilot Studio's Application Insights integration sends **sanitized telemetry** — event metadata without conversation text. Some supervisory or evidence-collection scenarios may require capturing conversation content (prompts, responses, user IDs). Enabling this **may be necessary for certain monitoring or evidence-collection scenarios, subject to legal, privacy, and records-governance review**; it does not by itself satisfy FINRA Rule 4511 / SEC 17a-4 books-and-records obligations, which should be met through Purview retention, supervisory review workflow (Control 2.12), and firm records policy.

    Where the firm determines that transcript capture is appropriate and legally supported:

    1. **Copilot Studio** > Agent > Settings > Advanced > Application Insights > enable **"Log sensitive activity properties"** — includes PII and conversation text in telemetry payloads
    2. **Power Platform Admin Center** > Environments > [Your Environment] > Settings > Product > Features > enable **"Allow conversation transcripts"** — tenant-level prerequisite that can block downstream telemetry if disabled

    Without these settings, the `customEvents` table in Application Insights will show event occurrences (e.g., `BotMessage`, `UserMessage`) but with **empty `text` fields**.

    **PII Governance Note:** Enabling sensitive properties routes PII into Application Insights. Ensure the Application Insights resource has appropriate access controls, data retention policies aligned with zone requirements (see Control 1.7), approved records classification, and is included in the organization's data governance scope.

---

### Retention and Recordkeeping Boundary

Sentinel retention is an **operational monitoring / investigation** control and is **not** a replacement for immutable books-and-records retention under FINRA Rule 4511 and SEC Rules 17a-3 / 17a-4 where applicable. A common FSI operating pattern is:

| Tier | Typical Target | Purpose |
|------|----------------|---------|
| **Interactive / Hot** | ~180 days | Active investigation, KQL analytics, workbook dashboards, near-real-time alerting |
| **Archive / Long-term** | Up to 12 years per table (Sentinel) or exported to firm-approved archive | Retrospective investigation, incident reconstruction, regulatory inquiry response |
| **Records-scope retention** | ≥ 6 years WORM (FINRA 4511 / SEC 17a-4(b)(4); first two years immediately accessible) | **Immutable books-and-records** — maintained in **Purview retention** and/or an SEC 17a-4(f) vendor archive; **not** in Sentinel |

Exact retention depends on workspace/table settings, cloud availability, cost approvals, and firm records schedule. Document the chosen pattern in the firm's written supervisory procedures (Control 2.12) and records policy.

---

### Example AI-Specific Analytics Rules

The table below is a starting catalog; each rule should be tuned to the firm's environment and formalized in the Sentinel workspace with KQL, severity, and Logic Apps playbook wiring.

| Detection Scenario | Signal / Source | Logic Apps Playbook Response |
|--------------------|-----------------|------------------------------|
| Prompt injection / jailbreak attempt | `OfficeActivity` (CopilotInteraction with XPIA / jailbreak flag), Defender AI-SPM alert | Tag incident, notify SOC + Agent Owner, attach transcript context to Control 2.12 supervisory queue |
| Anomalous connector / plugin / MCP tool use | `PowerPlatformAdminActivity`, `CloudAppEvents` | Open incident, enrich with Agent Registry metadata (Control 1.2), block connector if high-severity |
| After-hours privileged agent activity | `AADServicePrincipalSignInLogs` + `AuditLogs` with time-of-day condition | Alert + require sponsor attestation (Control 2.26) |
| DLP policy changes or bypass attempts | `PowerPlatformAdminActivity` with DLP policy delta, `CloudAppEvents` DLP alerts | Revert + alert Compliance Officer |
| Unusual consent grants / service principal changes | `AuditLogs` (consent grant, app role assignment) | Alert + feed Control 2.8 access-review queue |
| Orphan / shadow agent signals | Agent Registry delta vs `PowerPlatformAdminActivity` / `AADServicePrincipalSignInLogs` | **Cascade to Control 3.6 remediation register** |
| Mass data download by agent | `AADServicePrincipalSignInLogs` + `OfficeActivity` volume threshold | Suspend agent, notify Agent Owner + SOC |

---

!!! warning "Sovereign cloud availability (GCC / GCC High / DoD)"
    Microsoft Sentinel exists across commercial and government clouds, but **connector and preview-feature parity varies by cloud**. Preview features, Copilot-specific connectors, the Microsoft Copilot connector, certain Defender data types, and Sentinel MCP Server may lag or be unavailable in **GCC High** or **DoD** tenants. Organizations should:

    - Verify current Microsoft Learn support tables before depending on a given connector or preview feature
    - Maintain a **separate feature / connector catalog per cloud**
    - Document unavailable capabilities as **product unavailability**, not as policy exceptions or compensating controls
    - Use parallel patterns in Controls [2.25](../pillar-2-management/2.25-agent-365-admin-center-governance-console.md) and [3.6](3.6-orphaned-agent-detection-and-remediation.md) for sovereign-cloud evidence discipline

---

## Zone-Specific Requirements

| Zone | Requirement | Rationale |
|------|-------------|-----------|
| **Zone 1** (Personal) | Basic logging; monthly review | Low-risk, minimal monitoring |
| **Zone 2** (Team) | Analytics rules; weekly workbook review | Team data exposure |
| **Zone 3** (Enterprise) | Full detection suite; real-time alerting; automated response | Customer-facing, highest security need |

---

## Roles & Responsibilities

| Role | Responsibility |
|------|----------------|
| Sentinel Admin | Workspace deployment, connector configuration, analytics rule authoring, workbook deployment |
| Entra Security Admin | Ensure Entra sign-in (`SigninLogs`, `AADServicePrincipalSignInLogs`) and audit-log connectors are healthy; Identity Protection signal wiring |
| SOC Analyst / Security Operations | Monitor alerts, triage incidents, run Logic Apps playbooks, investigate agent anomalies |
| Purview Compliance Admin / Purview Audit Admin | Ensure Sentinel alerts and evidence align with Purview retention and eDiscovery holds; preserve books-and-records separately under 4511/17a-4 |
| AI Governance Lead | Define AI-specific detection requirements, review workbooks quarterly, approve KQL rule changes |
| Power Platform Admin | Ensure `PowerPlatformAdminActivity` ingestion is healthy; feed agent metadata for enrichment |
| Compliance Officer | Map Sentinel evidence to FINRA / SEC / NYDFS obligations; coordinate with Designated Principal on supervisory incidents |
| CISO | Approve Zone 3 detection posture, sovereign-cloud compensating patterns, retention schedule |

---

## Related Controls

| Control | Relationship |
|---------|--------------|
| [1.7 - Audit Logging](../pillar-1-security/1.7-comprehensive-audit-logging-and-compliance.md) | Data source for Sentinel; Sentinel complements but does not substitute for Purview / books-and-records retention |
| [1.8 - Runtime Protection](../pillar-1-security/1.8-runtime-protection-and-external-threat-detection.md) | Threat signals integration (Defender XDR, AI-SPM) |
| [1.9 - Data Retention and Deletion Policies](../pillar-1-security/1.9-data-retention-and-deletion-policies.md) | Books-and-records retention governed here; Sentinel retention is operational, not immutable |
| [1.24 - AI-SPM](../pillar-1-security/1.24-defender-ai-security-posture-management.md) | AI security alerts, attack paths, and posture signals feed Sentinel analytics |
| [2.6 - Model Risk Management](../pillar-2-management/2.6-model-risk-management-sr-26-2.md) | Fed SR 26-2 (formerly SR 11-7) ongoing monitoring — Sentinel findings feed MRM re-validation |
| [2.12 - Supervision and Oversight (FINRA Rule 3110)](../pillar-2-management/2.12-supervision-and-oversight-finra-rule-3110.md) | Supervisory incidents surfaced via Sentinel feed the designated-principal review queue |
| [3.4 - Incident Reporting and Root Cause Analysis](3.4-incident-reporting-and-root-cause-analysis.md) | Sentinel incidents are the primary trigger for 3.4 IR/RCA workflow and NYDFS 500.17 notification timer |
| [3.6 - Orphaned Agent Detection and Remediation](3.6-orphaned-agent-detection-and-remediation.md) | Sentinel signals for ownerless, abandoned, or anomalous agents cascade into the 3.6 remediation register |
| [3.7 - Security Posture](3.7-ppac-security-posture-assessment.md) | Complementary security view — posture metrics and alerting workbooks |
| [3.14 - Agent 365 Observability SDK](3.14-agent-365-observability-sdk.md) | Observability SDK telemetry is a parallel data source and can be routed to Sentinel for unified alerting |

---

## Implementation Playbooks

!!! info "Step-by-Step Implementation"

    This control has detailed playbooks for implementation, automation, testing, and troubleshooting:

    - [Portal Walkthrough](../../playbooks/control-implementations/3.9/portal-walkthrough.md) — Step-by-step portal configuration
    - [PowerShell Setup](../../playbooks/control-implementations/3.9/powershell-setup.md) — Automation scripts
    - [Verification & Testing](../../playbooks/control-implementations/3.9/verification-testing.md) — Test cases and evidence collection
    - [Troubleshooting](../../playbooks/control-implementations/3.9/troubleshooting.md) — Common issues and resolutions

!!! tip "Agent Usage & Performance Workbook"
    The [Agent Usage & Performance Workbook](../../playbooks/advanced-implementations/agent-usage-workbook/index.md) uses Application Insights as its data source — the same telemetry pipeline that feeds Sentinel integration. Organizations using both tools gain complementary visibility: the workbook provides operational dashboards while Sentinel handles security alerting and incident response. See the [Telemetry Schema Reference](../../playbooks/advanced-implementations/agent-usage-workbook/telemetry-schema.md) for data field mappings.

---

## Verification Criteria

Confirm control effectiveness by verifying:

1. All required data connectors show "Connected" status with recent data (M365, Entra sign-in + `AADServicePrincipalSignInLogs`, Power Platform Admin Activity, Microsoft Copilot, Defender, optional App Insights)
2. Analytics rules for agent anomalies are enabled and generating alerts (prompt injection/jailbreak, anomalous connector/MCP use, after-hours privileged activity, DLP change, consent-grant anomaly, mass-download)
3. Workbooks display agent activity and security posture without errors; reviewed on documented cadence (weekly Z2, real-time Z3)
4. Logic Apps automation playbooks execute successfully on test alerts with signed incident evidence
5. Hunting queries return results from recent agent activity
6. Incidents integrate with incident-tracking system (cascades to Control 3.4); NYDFS 500.17 72-hour notification timer wired where applicable
7. Orphan / shadow agent signals cascade into Control 3.6 remediation register
8. Retention schedule documented: interactive (~180d) vs archive (up to 12y) vs books-and-records (≥6y WORM via Purview / 17a-4(f) archive, **not** Sentinel)
9. Sovereign cloud parity verified for the deployment cloud (Commercial / GCC / GCC High / DoD); unavailable connectors documented as product unavailability
10. Quarterly evidence package signed by Sentinel Admin + AI Governance Lead + Compliance Officer

---

## Additional Resources

!!! info "Portal Transition Update (February 2026)"
    Microsoft extended the Sentinel Azure portal deprecation timeline. Sentinel will no longer be supported in the Azure portal after **March 31, 2027** (previously July 2026). Organizations should plan their transition to the Microsoft Defender portal accordingly.

- [What is Microsoft Sentinel](https://learn.microsoft.com/en-us/azure/sentinel/overview)
- [Microsoft Sentinel Data Connectors](https://learn.microsoft.com/en-us/azure/sentinel/connect-data-sources)
- [Create Custom Analytics Rules](https://learn.microsoft.com/en-us/azure/sentinel/detect-threats-custom)
- [Microsoft Sentinel Workbooks](https://learn.microsoft.com/en-us/azure/sentinel/monitor-your-data)
- [Automation Rules](https://learn.microsoft.com/en-us/azure/sentinel/automate-incident-handling-with-automation-rules)

---

*Updated: May 2026 | Version: v1.6.2 | UI Verification Status: Current*
