Wall Street regulator to mandate listed companies spell out cyber risks -Breaking
By Katanga Johnson
WASHINGTON (Reuters), Wall Street’s watchdog has announced Wednesday a new rule that will improve how companies can disclose breaches of security and the time they do it.
According to the Securities and Exchange Commission’s (SEC) proposed regulations, companies would need to state when they experience a risk and which strategies it used to mitigate it.
These rule changes are open to public comment. They will also need to analyze how cyber risk could affect financial statements. According to the SEC, this will allow investors to more accurately assess risks and find them faster.
These changes are coming at a time when regulators have become more concerned about the impact cyber security could have on investors and markets. For example, regulators have warned of Russian cyberattacks in retaliation to western sanctions.
The administration of President Joe Biden also increased its attention to the matter following a string of highly publicized cyber attacks against U.S.-based firms.
Gary Gensler (SEC chair) stated that when companies are under an obligation to reveal material information to investors they have to be accurate and complete.
He added, “Their disclosures should also be timely.”
The agency stated that Wednesday’s measures would require periodic updates to provide investors with more information about cybersecurity incidents previously disclosed.
According to a spokesperson for the agency, these proposals will build upon existing SEC guidance on cyber risks, which will remain in place despite new regulations.
The official said that it was important to consider how a company may think about the breach’s impact on management’s analysis and discussion of financial condition.
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