SEC Cybersecurity Disclosure Rule (2023)

Why it Matters

The SEC Cybersecurity Disclosure Rule enhances accountability incybersecurity risk management and transparency around materialincidents for publicly traded companies.

Key benefits include:

• Strengthen board oversight

Improve executiveengagement by requiring the board and management to overseecybersecurity strategy and risk management processes.

• Enhance investor transparency

Ensure investorsreceive timely, consistent disclosures about cybersecurity incidentsthat may impact financial performance or operations.

• Support regulatory compliance

Align informationsecurity practices with SEC requirements, reducing risks ofenforcement actions and reputational harm.

• Improve incident response accountability

Mandate formalincident response planning and reporting, which leads to moreeffective organizational response and recovery from cyber events.

• Promote risk-informed governance

Integratecybersecurity risk assessments into overall governance structures,supporting more robust decision-making and resource allocation.

How it Works

The SEC Cybersecurity Disclosure Rule (2023) structures itsrequirements around governance, risk management, and incidentdisclosure obligations for publicly traded companies. The frameworkfocuses on regulatory requirements mandating that registrantsdisclose their cybersecurity risk management strategies, oversightmechanisms, and any material cybersecurity incidents. It integratesgovernance domains by emphasizing board and management involvement,as well as ongoing processes for identifying, assessing, andaddressing cybersecurity risks.

Organizations implement the SEC Cybersecurity Disclosure Rule byestablishing robust security practices, such as conducting riskassessments, documenting cybersecurity policies, and aligningsecurity controls with regulatory requirements. Compliance teamscollaborate with IT and executive leadership to monitor ongoingcybersecurity posture, prepare for disclosure reporting, and developincident response plans that support timely and accurate regulatoryfilings. Regular reviews of risk management activities and governancemeasures ensure continued adherence to the rule.

With SmartSuite, companies can operationalize the SEC CybersecurityDisclosure Rule through capabilities such as maintaining a controllibrary mapped to SEC requirements, using risk registers to documentand track cybersecurity risks, and centralizing policy governance.Evidence collection tools support compliance tracking, whileautomated workflows assist with incident disclosure and remediation.Reporting dashboards enable ongoing monitoring, audit readiness, andcomprehensive oversight of regulatory compliance efforts.

Key Elements

• Cybersecurity Incident Disclosure Processes

Specifiesmechanisms for identifying, assessing, and publicly reportingmaterial cybersecurity incidents in regulatory filings.

• Risk Management and Assessment Framework

Describesstructured methods for evaluating, managing, and documentingorganizational cybersecurity risks on an ongoing basis.

• Board Oversight and Governance

Establishesleadership responsibilities and accountability structures foroverseeing cybersecurity risk and regulatory compliance.

• Cybersecurity Strategy Documentation

Outlines howorganizational approaches to cyber threats and data protection areformulated and communicated to stakeholders.

• Disclosure Policies and Procedures

Defines formalprocesses for preparing, reviewing, and submitting requiredcybersecurity disclosures to the SEC.

• Annual Review and Reporting Cycle

Providesguidelines for periodic updates on cybersecurity risk managementpractices within mandatory annual reports.

Framework Scope

The SEC Cybersecurity Disclosure Rule (2023) is used by domestic andforeign public companies registered with the U.S. Securities andExchange Commission. It governs the disclosure of materialcybersecurity incidents, risk management strategies, and boardoversight for information systems, supporting regulatory compliance,improving cyber risk transparency, and enhancing investor assurancethrough consistent disclosure practices.

Framework Objectives

SEC Cybersecurity Disclosure Rule (2023) enhances transparency incybersecurity risk management, governance, and compliance for publiccompanies.

Strengthen board oversight of cybersecurity and data protectionmeasures

Improve transparency of material cybersecurity incidents and riskmanagement practices

Support regulatory compliance with SEC disclosure and reportingrequirements

Promote robust governance structures for cybersecurity risk andincident response

Enhance investor confidence through consistent cybersecuritydisclosures

Enable effective assessment of cybersecurity controls and operationalresilience The SEC Cybersecurity Disclosure Rule complements existingsecurity and governance frameworks—commonly mapped to NISTCybersecurity Framework, ISO/IEC 27001, and COSO Internal Control—tohelp organizations standardize risk disclosures. Firms implement itfor regulatory compliance, governance alignment, incident reporting,and to demonstrate controls and processes to investors, auditors, andregulators.

Common Framework Mappings

Organizations map these established frameworks to the SECCybersecurity Disclosure Rule to align technical controls,governance, incident response, and financial-reporting controls,enabling consistent disclosures, auditability, and regulatorycompliance.

Mapped frameworks include:

CIS Critical Security Controls

COSO Internal Control — Integrated Framework

ISO/IEC 27001

NIST Cybersecurity Framework

NIST SP 800-53

NYDFS Cybersecurity Regulation (23 NYCRR 500)

Sarbanes-Oxley Act (SOX)

SOC 2

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