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In July 2023, the U.S. Securities and Exchange Commission (SEC) introduced new cybersecurity incident disclosure rules, aiming to enhance cybersecurity transparency and mitigate risks for investors. With the introduction of these stringent rules, companies are under increasing pressure to ensure robust data protection measures. These regulations, while posing challenges, also present opportunities for organizations to improve their cyber resilience and establishproactive incident reporting and response. A crucial consideration to maintain compliance with these requirements lies in adopting Dynamic Access Control solutions centered around an Attribute-Based Access Control (ABAC)authorization model. This approach not only enhances security posture and visibility, but also simplifies compliance processes.

Understanding the SEC Cybersecurity Incident Disclosure Rules

First, let’s explore the SEC’s now 10-month-old Cybersecurity Incident Disclosure Rules. The rules mandate that companies must disclose any material cybersecurity incidents promptly. They are designed to enhance transparency and protect investors by ensuring they are informed about significant cyber risks and incidents that could negatively impact their investments. Key requirements for public companies and foreign private investors include:

  1. Timely Reporting: Within four days of a material incident, companies must file a Form 8-K or Form 6-K.
  2. Periodic Disclosure: Companies must periodically disclose their cybersecurity risk management strategy in annual reports.
  3. Incident Response: Organizations must outline their incident response procedures and maturity of capabilities.
  4. Board Oversight: Companies must describe their board oversight of cybersecurity risk, including the role of management and board committees.

The Challenge of Materiality

A significant challenge under the new SEC cyber rules is determining what constitutes a “material” incident. This ambiguity emphasizes the need for a deliberate process in assessing access control and data exposure risks and aligning them with business values. For instance, a cyber-attack-induced manufacturing shutdown could be deemed material due to its impact on finances, operations, reputation, or investor decision-making.

The Benefits of ABAC and Dynamic Access Control Solutions 

Dynamic Access Control solutions, particularly those based on ABAC, provide a robust framework for managing access to resources based on dynamic attributes and customizable policies. This enables a granular approach to access control that evaluates access requests based on customizable and dynamic policies. By considering a wide range of attributes, ABAC provides an adaptable and context-aware access control mechanism for unparalleled data security. Here’s how these solutions help in SEC Cyber Rule compliance:

  • Enhanced Data Security Through Granular Access Control: ABAC allows organizations to define access policies based on dynamic attributes such as user roles, location, time, and data sensitivity. This granular control ensures that only authorized personnel can access sensitive information, reducing the risk of unauthorized data exposure requiring SEC disclosure.
  • Dynamically Mask Sensitive Data: Dynamic Data Masking anonymizes sensitive data in production SAP environments based on the defined dynamic access control policies governed by the ABAC authorization model. This ensures that sensitive data is inaccessible or indecipherable to unauthorized individuals, eliminating the chance of a material incident or data breach.
  • Automated Compliance and Reporting: Dynamic access control solutions leveraging ABAC can automatically log access requests and decisions. These logs provide detailed records that are crucial for demonstrating compliance with the SEC Cyber Rules. This audit trail facilitates compliance reporting by showing that appropriate access controls are in place and are being effectively managed.
  • Improved Incident Response: ABAC systems can integrate with threat detection and response solutions to provide a more robust security posture. In the event of a cybersecurity incident, the solution can dynamically adjust access controls to contain the threat and prevent further damage. This proactive incident response capability is crucial for meeting SEC disclosure requirements related to incident response and mitigation.
  • Real-Time Adaptability and Simplified Policy Management: Managing access control policies can be complex, especially in large organizations with diverse user bases and resources. ABAC simplifies this by allowing policies to be defined based on attributes rather than specific users or roles. For instance, if an employee’s role changes, their access rights can be automatically updated based on the new role’s attributes. This makes it easier to maintain and update policies, ensuring that they remain effective and compliant with evolving regulatory compliance requirements.

Easily Implement Dynamic Access Controls for Automated SEC Compliance with Pathlock

The Dynamic Access Controls (DAC) module from Pathlock is built on an ABAC security model. This enables a customizable and scalable, policy-based approach to data security and access control. The module’s centralized ABAC policy administration capabilities ensure that you can easily define and apply granular, dynamic access control policies without the need for redundant policy administration efforts on a per-role basis. Since the access control policies are centrally managed and highly adaptable, data security is maintained even during shifting security or compliance requirements.

Additionally, the DAC module delivers comprehensive session logging and integrates with Pathlock’s Threat Detection and Response module to track user activities within SAP systems, automating incident analysis and response, audit trails, and other access-related forensic investigations. Since the module enables automated reporting and real-time visibility, it is effortless to demonstrate that access controls are being effectively governed to maintain data security. This is invaluable to quickly understand and report the source, scope, and impact of a potential security incident or material breach, ensuring your organization is compliant with the SEC Cyber Rules.

Dynamic Access Controls from Pathlock for SAP

Ready to see how Pathlock can ensure your organization is compliant with the SEC Cyber Rule requirements? Sign up for a demo today to see how Dynamic Access Controls from Pathlock can streamline regulatory compliance, protect your sensitive data, and improve your cybersecurity posture and visibility.

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