Establishing a reporting infrastructure that sheds light on what, how, and when security incidents are disclosed is important for the industry at large and is a huge step toward having cybersecurity seen as a business-wide issue.
In 2024, that ambiguity must be cleared up: without clear guidance, companies may over-disclose information to the point of creating noise that masks truly material incidents.
Cybersecurity incidents are highly diverse and continuously evolving, posing a unique challenge for companies.
When handling larger-scale data breaches, companies often err on the side of caution, opting for comprehensive disclosure to mitigate legal risks.
Naturally, companies are hesitant to become test cases for these definitions.
This ambiguity may prompt businesses to over-communicate with the SEC, ensuring exhaustive compliance with the immediate disclosure requirements.
Investors relying on a company's 8-K filings for insights into the impact of a cyber incident might consequently overlook critical details amid the information overload. To counter this, the SEC needs to engage in proactive dialogues to clarify disclosure requirements, particularly regarding the frequency and extent of details needed.
Not all cybersecurity incidents require public disclosure.
Determining the materiality of an incident is another ambiguous mandate in the SEC's rules.
Companies will have four business days to disclose an incident determined to be material, unless immediate disclosure poses a risk to national security or public safety.
If everything gets reported out of fear, the intention of the disclosure regulation may be devalued.
There's a pressing need to define more clearly what constitutes a material breach, including its impact on those affected, its influence on a company's operations, and its future implications.
Not all incidents warrant public disclosure; many can be managed internally, without significant disruption to normal operations.
It consumes significant resources to assess the materiality of a breach, particularly under the pressure of regulatory compliance.
In the absence of clear guidelines, resources that could be better used in addressing the breach and bolstering overall security may be redirected towards compliance activities.
Proactive guidelines from regulatory bodies are crucial not only for external stakeholders, but also for strengthening the company's future security posture.
Clear action and guidance from regulators are imperative in this context.
It's important to recognize that cybersecurity incidents are a common occurrence for companies, but not all warrant public disclosure.
This Cyber News was published on www.helpnetsecurity.com. Publication date: Mon, 22 Jan 2024 06:13:05 +0000