U.S. Securities and Exchange Commission policymaker Kara Stein made some bold statements about the agency’s responsibility to help companies both prevent and recover from cyber attacks, the Financial Times reported over the weekend.
Stein, an SEC commissioner, told FT the regulator needs to step up its efforts to encourage businesses to establish significant cybersecurity defenses in order to keep up with the growing number of cybercrime threats facing companies across the globe.
“We should play a much more active role in trying to help companies better protect themselves against an increasing number of cybersecurity issues in a world in which we’re all increasingly connected,” Stein explained to FT. “To some degree we’re only as strong as our weakest player.”
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According to FT, Stein, along with other left-leaning critics of the SEC, claim the regulator is not using the authority it has to force change in the securities industry as strongly as it should.
Cybersecurity threats have continued to climb to the top of agendas for both private entities and the national government, resulting in shareholders becoming “increasingly concerned about the risk of catastrophic cybersecurity breaches that inflict serious financial damage,” Nick Mizaur of Beacon Policy Advisors in Washington told FT.
“[Attacks] are coming from all over the world and they’re coming from within our own country,” Stein told FT when asked about Chinese hacking.
“Regardless of the source, we want to be able to prevent it from happening in the first place. If it happens, [we want to] help firms get back up and running quickly. And in a market situation, [we want to] make sure there is not a disruption to the larger market.”
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One particular criticism Stein noted was the SEC’s decision to not hold many securities companies accountable for adhering to technology rules, known as Regulation SCI, instituted last year to strengthen security in the markets.
Stein said that while these rules were a step in the right direction, she would have expanded it to include intermediaries who are directly connected to investors or the market.
“We basically left out over 4,000 broker dealers [and] alternative trading venues,” she explained, referring to broker-run trading platforms known as “dark pools” that have exacerbated the spread of high-frequency trading, FT reported.
In a response to Stein’s comments, an SEC spokesperson said cybersecurity remains a high priority for the agency, pointing to its active efforts to address cyber-related issues in the business community, law enforcement and financial regulators.
“The cyber threat is constantly evolving, and we and other regulators around the world, together with the private sector, must evolve with it in order to continually enhance our capacity to protect investors and our markets,” the unidentified SEC spokesperson stated.
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