Cybersecurity Regulations: Protecting Against Emerging Threats
Introduction
In today’s digital age, cybersecurity is more crucial than ever. With the increasing reliance on technology and the rising number of cyber threats, it is essential for companies to prioritize the security of their systems and data. The Securities and Exchange Commission (SEC) has recently introduced a set of cybersecurity regulations aimed at ensuring transparency and accountability in the industry. While these regulations have been met with mixed opinions, they serve as an important step towards protecting against emerging threats.
The Need for Cybersecurity Regulations
Cyberattacks by state-sponsored actors have become a growing concern for both industry and government. These attacks, often carried out by countries like Russia and China, highlight the vulnerability of our digital infrastructure and the potential risks associated with it. The SEC’s new regulations are a response to these threats and the need for increased transparency in the industry.
By requiring companies to publicly disclose incidents and report regularly on governance, the SEC aims to create awareness and ensure that organizations take cybersecurity seriously. This increased transparency will not only benefit individual companies but will also drive discussions around cyber risk at a broader level, which is essential in the current geopolitical landscape.
Challenges with the New Regulations
While the intentions behind the SEC’s cybersecurity regulations are commendable, there are some concerns regarding their implementation. One of the main challenges is the redundancy and potential flaws in the new incident reporting obligations. Congress has already directed the Cybersecurity and Infrastructure Security Agency (CISA) to develop incident notification regulations for the industry. The duplication of reporting requirements to both CISA and the SEC may cause confusion and additional administrative burdens for companies.
Furthermore, the regulations could lead to premature information release, which could be exploited by attackers. Requiring companies to disclose information about vulnerabilities before a patch is available puts users at risk and may give attackers an advantage. Balancing the need for transparency with the need for timely and secure disclosures is a challenge that needs to be addressed.
A Comprehensive Approach to Cybersecurity
While the SEC’s regulations are a step in the right direction, a more comprehensive approach is needed to address the complexities of cybersecurity. The current landscape is fragmented, with multiple agencies and departments responsible for different aspects of cybersecurity. This fragmentation makes it difficult for companies and individuals to navigate and collaborate with the government effectively.
To overcome these challenges, three key actions are necessary:
- Suspending Incident Reporting Requirements: The SEC should consider suspending the incident reporting requirements and defer future cybersecurity mandates to Congress and CISA. This would enable a more coordinated and consolidated approach to incident reporting, streamlining the process for companies and reducing duplication of efforts.
- Establishing Select Committees on Cybersecurity: Congress should establish select committees on cybersecurity in both houses. These committees would have primary jurisdiction over technology risk issues and would ensure a more focused and unified approach to cybersecurity policy-making.
- Considering Liability Regimes: Congress must also consider liability regimes that incentivize technology developers to prioritize security. Releasing products and services with preventable fundamental defects puts users at risk and undermines their trust. By implementing liability regimes, companies would be motivated to ensure their products are safe by design.
These actions, when taken together, would create a more cohesive and efficient national cybersecurity strategy. A central civilian agency dedicated to digital risk management, similar to the Department of Homeland Security established after 9/11, could provide the necessary oversight and coordination.
An Integrated Approach to Cybersecurity
As technology continues to advance, our dependence on it increases exponentially. It is clear that relying solely on government regulations is insufficient to protect against emerging threats. Smarter regulation, focusing on reducing overlaps and conflicts, is needed to effectively address cybersecurity risks.
Companies should take a proactive approach to cybersecurity by implementing robust security measures, regularly updating software and systems, and educating employees about best practices. Collaboration between government and private sector entities is crucial in sharing information, identifying vulnerabilities, and developing effective defense mechanisms.
Additionally, investing in research and development of advanced technologies, such as artificial intelligence and machine learning, can enhance our ability to detect and respond to cyber threats. By leveraging these technologies, companies can identify patterns, detect anomalies, and mitigate risks more effectively.
Conclusion
Cybersecurity regulations play a vital role in protecting against emerging threats in today’s interconnected world. The SEC’s recent regulations are a significant step towards ensuring transparency and accountability in the industry. However, challenges remain, and a more comprehensive approach is needed to address the complexities of cybersecurity.
By suspending incident reporting requirements, establishing select committees on cybersecurity, and considering liability regimes, the government can create a cohesive and efficient national cybersecurity strategy. Additionally, companies should take a proactive approach to cybersecurity, investing in robust security measures and collaborating with government entities to enhance collective defense against cyber threats.
With the increasing reliance on technology and the ever-evolving nature of cyber threats, it is essential to stay informed and proactive in ensuring the security of our digital infrastructure. By embracing a comprehensive and integrated approach to cybersecurity, we can better protect ourselves, our businesses, and our nation.
Summary
The Securities and Exchange Commission (SEC) has recently announced new cybersecurity regulations that aim to enhance transparency and accountability in the industry. While these regulations are a step in the right direction, there are challenges that need to be addressed. The duplication of incident reporting requirements and the potential premature release of information pose risks that must be mitigated.
To create a more comprehensive approach to cybersecurity, three key actions are necessary: suspending incident reporting requirements and deferring future mandates, establishing select committees on cybersecurity, and considering liability regimes. These actions would enable a more coordinated and unified national cybersecurity strategy.
However, it is important to remember that regulation alone is not sufficient to protect against emerging threats. Companies must take a proactive approach to cybersecurity by implementing robust security measures, collaborating with government entities, and investing in advanced technologies. By embracing a comprehensive and integrated approach, we can effectively address the complexities of cybersecurity and safeguard our digital infrastructure.
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The author is a partner at the Krebs Stamos Group and a former director of the US Cybersecurity and Infrastructure Security Agency
The Securities and Exchange Commission (SEC) recently announced a highly anticipated set of cybersecurity regulations, requiring companies to publicly disclose incidents and report regularly on governance. At first glance, these new rules make sense and are even overdue, particularly after a series of high-profile attacks by Russia, China and their proxies. These have shaken industry and government alike, highlighting our reliance on tech companies and their vulnerable products.
The increased transparency will surely drive much-needed awareness across the industry. Corporate discussions around cyber risk are crucial at a time when geopolitics and technology are inextricably linked. But not all SEC additions are positive.
The new incident reporting obligations are redundant and flawed. Congress last year directed the Cybersecurity and Infrastructure Security Agency (CISA) to develop incident notification regulations for the industry. Congress has been clear: CISA is the lead civilian cybersecurity agency, and incident reporting should go there. The new rule now requires companies to report incidents to two federal regulators: CISA and the SEC.
The SEC regulations also encourage companies to release information prematurely that could allow attackers to sneak in, evade responders, and cause long-term damage. More worryingly, a company may be required to release information about a vulnerability before a patch is available, leaving customers using that vulnerable software defenseless against attacks from newly-enhanced attackers.
We’ll soon have a mess of computer reporting on our hands. Due to jurisdictional battles and the absence of a unified electoral college, Congress lacks a clear strategy for improving US cybersecurity. Leadership remains fragmented and subject to the whims of multiple committees.
Over the past decade, lawmakers have enacted a hodgepodge of laws and authorized an endless stream of organizations. Nearly every major executive department has an information security office, unnecessarily reducing resources and staffing. This excessive bureaucratization has made it harder, not easier, to work with the government. I hear regularly: “who do I call to talk about this problem? CISA, FBI, NSA, Department of Energy, White House? Why can’t there be a one stop shop for working with the government on cyber issues?”
This is exactly what I sought to achieve by working with Congress in 2018 to establish CISA. But while CISA has successfully established itself, it still lacks a cohesive national IT organizational structure.
How do we get out of this constraint? Three things are needed: First, the SEC should suspend incident reporting requirements and defer future cybersecurity mandates to Congress and CISA. The remaining regulations may remain in effect, although the SEC should evaluate industry feedback on the practical aspects of their implementation.
Second, Congress should establish select committees on cybersecurity in both houses. These would have primary jurisdiction over technology risk issues, initially cybersecurity, but possibly artificial intelligence as well.
Finally, Congress must consider liability regimes that ensure technology developers introduce products and services that are safe by design. We are faced with intelligent enemies busy breaking into key services. But we continue to see products released with preventable fundamental defects. Developers must be taken into consideration.
In the long term, select committees should designate a central civilian agency lead on digital risk management issues. This could be created by repurposing an existing agency such as CISA or through a new organization that draws on elements of existing agencies across government. There is a precedent for such a reorganization: The Department of Homeland Security was created in the wake of 9/11, and regardless of your views on DHS, we are safer today because of its creation.
It is clear that our dependence on technology is accelerating at a rate that exceeds our ability to intervene. More government is not the answer. Smarter regulation can be achieved by reducing overlaps, conflicts and counterproductive regulatory agendas. We need to think of grander solutions rather than constant incremental adjustments.
Maybe the SEC did us a favor by going overboard with its new rule. Congress should now reassert itself to put national cybersecurity policy on the right track.
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