Navigating the SEC's New Cyber Rules: A Comprehensive Overview

Starting from December 18, publicly-owned companies in the U.S. must comply with new SEC rules requiring them to disclose "material" cyber incidents within 96 hours. The regulation aims to increase visibility into cybersecurity governance and provide consistent disclosure for investors. Breached organizations must describe the incident's nature, scope, timing, and material impact, but are not required to disclose ongoing remediation efforts. Smaller companies have a 180-day extension, and larger organizations can delay disclosure if it poses a risk to national security or public safety. Non-compliance can result in financial penalties, legal liabilities, reputational damage, loss of investor confidence, and regulatory scrutiny. Some companies have expressed concerns about the short reporting window and the SEC's definition of "material incidents." Hackers have already abused the new rules by filing an SEC complaint against a victim for failing to report a breach.