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Defense primes, specifically those on U.S Capital markets face a much bigger problem than CMMC when it comes to stakeholders, that is the SEC final cyber rule.
There is no doubt that the DoD is a critical customer to defense primes, and DFARS 252.204-7012, NIST SP 800-171 compliance is important. However the SEC cyber rule directly targets boards and security professionals of covered entities, setting broader cybersecurity compliance requirements for defense firms than DFARS.
The clock is ticking for the SEC cyber rule, with compliance starting in December 2023. The rule amongst other things requires covered firms to disclose ‘Whether the registrant has processes to oversee and identify material risks from cybersecurity threats associated with its use of any third-party service provider.’ That has similarities to DFARS.
Whilst Defense firms rely on SEC securities markets. They also rely on other financial markets for securities, FX, fix income and liquidity. As demonstrated recently with the MGM, Caesars and Clorox hacks shares price was negatively affected. Potentially having a knock on effect across other financial markets.
While DFARS and cyber compliance is important. Failing to comply to the SEC final cyber rule could result in a board and/ or security professional facing civil or criminal liabilities. As we saw last week when the SEC charged SolarWinds and its CISO.
Ted Dziekanowski Brian D. McCarthy Bob Dix Rachel V. Rose, JD, MBA
#paravasecuritysolutions #cybersecurity #dfars #cyberriskmanagement
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