SEC chair eyes tougher cyber rules to protect investors against hackers
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Before a hearing of the Senate Banking, Housing, and Urban Affairs Committee on September 14, 2021, in Washington, Gary Gensler, chairman SEC, testifies.
Evelyn Hockstein-Pool/Getty Images
Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said Monday that he is looking at tougher cybersecurity regulations to help protect investors from financial losses and data theft by hackers.
A top agency official has been considering tighter requirements to a wide range of financial institutions, such as publicly traded companies and financial advisors. He also considers trading houses, brokers, trading systems, custody clients assets, and other firms.
Gensler noted that the economic consequences of cyberattacks could reach into the trillions or even billions of dollars. He said that hackers from both the state and the non-state try to take data and intellectual property, as well as money, and lower the confidence of the financial system. This can also disrupt economics.
Gensler: “All of this places our financial accounts and savings at risk.” saidMonday at Northwestern Pritzker School of Law, Annual Securities Regulation Institute.
He added that “the financial sector is still a real target for cyberattacks.” “It’s embedded more deeply in the critical infrastructure of society,” he added.
Are there new rules?
Gensler stated that the SEC commissioners are expected to discuss whether new cyber standards will be proposed for Treasury trading platforms at a Wednesday meeting.
Specifically, the agency would bring the platforms under the umbrella of an existing rule — Regulation Systems Compliance and Integrity — which currently covers entities like stock exchanges and clearinghouses. Gensler explained that this measure would ensure companies have robust technology programs and backups.
Staff were also requested by the bureau chair to suggest reforms in other areas.
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Gensler, for example, suggested that rules be implemented to lower risk in investment firms, advisors, and broker-dealers through improvements in cybersecurity hygiene and reporting incidents.
Gensler suggests that the agency consider updating financial advisors’ and brokerages’ disclosures to customers after a breach. Gensler stated that the agency might also review cyber risk disclosures made by public companies to investors and their practices in general.
Gensler stated that investors and companies would both benefit from consistent and comparable information about publicly traded companies.
Finally, he requested staff to assess whether there were any stricter requirements for financial service providers (custodians and fund administrators).
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