Looking Back on Year One of the SEC’s Cybersecurity Disclosure Rules

Just a year ago, the U.S. Security and Exchange Commission (SEC) adopted rules requiring registrants to provide annual enhanced and standardized disclosures regarding “cybersecurity risk management, strategy, governance, and incidents.” This ruling aims to bring greater transparency and accountability to how public companies handle cybersecurity threats, which have become increasingly sophisticated and prevalent. The consistency and transparency dictated by this ruling benefit investors, the company itself, and the greater market connecting them.

As we are coming up on the ruling’s first anniversary, it’s important to reflect on its impact throughout cybersecurity and governance.

The Impact of the SEC Cybersecurity Disclosure Rules

The SEC’s transparency ruling, effective July 26, 2023, marked a significant shift in the regulatory landscape for public companies. The rules mandate that registrants must have a comprehensive understanding of their position within the threat landscape. Specifically, companies are required to manage their cybersecurity risk through well-defined policies and procedures that identify and address cybersecurity threats. They must also develop and implement a cybersecurity strategy that integrates cybersecurity considerations into their overall business strategy, financial planning, and capital allocation.

Governance is a top priority under this ruling, as companies must disclose information about their board’s oversight of cybersecurity risk, including the expertise of their board members and their roles in managing these risks. Finally, companies are required to provide a timely and accurate disclosure of any cybersecurity incidents, detailing their impact on the company’s operations and financial performance.

Over the past year, these requirements have prompted companies to re-evaluate and enhance their cybersecurity frameworks, ensuring that they are robust, effective, compliant, and transparent to stakeholders.

The Challenges of the Ruling

While the SEC’s ruling is a significant step forward in protecting investors and the broader market from cyber risks, compliance and continuous transparency can be challenging due to the many moving parts involved. Registrants must maintain ongoing vigilance, continuously monitoring and updating their cybersecurity practices to stay ahead of evolving threats.

How Thrive Helps Businesses Stay Compliant Under SEC Demands

At Thrive, we understand the intricacies of regulatory compliance under the demands of the SEC. Our mission is to empower businesses to excel in these conditions. With Thrive by your side, you will have 24x7x365 access to:

• Managed Cybersecurity Solutions: Our comprehensive cybersecurity suite is an all-encompassing set of solutions designed to help businesses identify vulnerabilities and swiftly implement effective risk management strategies.
• Incident Response and Reporting: In the event of a cybersecurity incident, Thrive provides Incident Response and Remediation Services to mitigate damage and support recovery in the face of unexpected disasters, enabling you to promptly disclose the incident and ensure that you meet regulatory requirements while maintaining stakeholder trust.
• Consulting Services: It’s important to have the team and expertise in place to stay in line with extensive regulations. Thrive addresses any gaps that may exist in your organization by providing a variety of expert professional and consultative services. Long story short, Thrive has your back.
• Compliance Regulation: Our goal is to help you meet the stringent requirements set forth by the SEC while ensuring that your risk management framework is both comprehensive and compliant.

Looking Ahead

As we look back on the first year of the SEC’s cybersecurity disclosure rules, it’s clear that public companies are now made more accountable for their cybersecurity practices and are required to be transparent about their efforts to protect themselves and their stakeholders.

At Thrive, we are committed to helping businesses navigate this new chapter of cybersecurity regulations. Our comprehensive suite of managed services ensure that your organization will comply with the SEC’s requirements while also building a resilient and secure foundation for the future.

Let Thrive be your partner in cybersecurity excellence. Contact us today to learn more about how we can help your business succeed in the face of the SEC’s evolving regulations.