SEC Rules for Cyber Security Disclosure

In May 2011, Senator Jay Rockfeller requested to the Securities and Exchange Commission that it should advice public companies on the time when disclosure of cybersecurity risk to investors is compulsory. On October 13^th, the Division of Corporate Finance at the SEC issued a Disclosure Guidance that for the first time advises registrants to evaluate their cybersecurity risks and if found necessary these risks should be disclosed to investors. The companies which ignore the suggestion of Division of corporate finance and fail to disclose important cybersecurity risks do so at their own risk and are liable to regulatory and legal action.

Irrespective of their area of business, be it banking retail or defense industry, companies are facing diverse array of cyber security risks, on a daily basis, from the cyber criminals who attempt on stealing the important and vulnerable information or corrupt data.