The world of finance and cybersecurity has entered a new chapter with the U.S. Securities and Exchange Commission’s (SEC) recent final rule on cybersecurity disclosure. Effective September 5, 2023, this new regulation requires public companies to enhance transparency around cybersecurity risks and incidents. We will delve into the details of the final rule, discuss its impact on registrants, and explore how companies can turn this regulatory requirement into a strategic advantage.

Understanding the SEC’s Cybersecurity Final Rule

The SEC’s final rule mandates that public companies must disclose material cybersecurity incidents on Form 8-K or Form 6-K, depending on their size and type. This move aims to standardize how companies report these incidents and to inform investors of potential risks to their investments.

Here’s what you need to know:

Effective Date: The new Item 1.05 of Form 8-K comes into effect on December 18, 2023, for most registrants, while smaller reporting companies have an additional 180 days to comply.

Scope of Disclosure: Companies must report material cybersecurity incidents, which are defined as unauthorized events that jeopardize the confidentiality, integrity, or availability of their information systems or data.

Reporting Timeline: An Item 1.05 Form 8-K must be filed within four business days after the company deems an incident material, although this can be delayed if immediate disclosure is considered a substantial risk to national security or public safety.

Exemptions: Smaller reporting companies and asset-backed issuers have certain exemptions or extended timelines for compliance.


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