2023-12-11
FBI Publishes Guidance for SEC Incident Reporting Rule
The US Securities and Exchange Commission’s (SEC’s) new rule for security breach reporting takes effect on Monday, December 18. The rule requires companies to report “material“ breaches to the SEC within four working days. The FBI has outlined procedures for organizations that want to delay reporting.
Editor's Note
The SEC has been using the same definition of a “material event” for over 20 years now – no publicly traded company can complain that is not clear enough. No word yet on how the FBI plans to assure that using email for disclosure delay requests that are chock-full of sensitive information will be done safely and securely – it cries out for the use of encryption and strong authentication.
John Pescatore
Four business days is pretty generous considering your other regulators may have shorter timelines of 72 or 48 hours. Regardless of the reporting interval, you may consider the disclosure detrimental to your business. In this case the FBI is giving an option to delay, but not eliminate, the 8k filing, but you have to engage them immediately upon determination you need to file the 8K. The good news is that the SEC hasn't changed the definition of a "material" breach in a long time. While you're looking at, and updating your SEC reporting requirements, make sure the information on reporting as required by any other regulators is current, to include knowing what and how to file/report, how the information is protected, and who in your management needs to be onboard.
Lee Neely
Basically, notify us immediately ‘upon determination,’ but within the four-day window, otherwise request denied. The questions the FBI is asking are all reasonable: the who- what- when- where-and-how sort that one asks when trying to determine what happened. The onus is still on the victim to determine what constitutes a ‘material’ breach and whether to notify, but it’s clear, the government wants to be alerted as soon as possible. From my lens, that’s not a bad thing.