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CheckRed Editorial

Compliance
11 January 2024

The impact of SEC regulations on MSPs and MSSPs

The Securities and Exchange Commission (SEC) has enacted a landmark cybersecurity disclosure rule. This new legislation mandates increased transparency around cyber risk, placing the onus on public companies to disclose vulnerabilities, incidents, and their mitigation strategies.

What does this mean for Managed Service Providers (MSPs) and Managed Security Service Providers (MSSPs)? As trusted security partners to numerous public companies, the expertise and services of MSPs and MSSPs are suddenly pushed into the spotlight. The role these providers play has expanded beyond proactive defense to becoming an integral part of building and demonstrating their clients’ cyber resilience.

The demand for robust security solutions and expert guidance is poised to skyrocket. By embracing this shift and aligning offerings with the new regulatory landscape, MSPs and MSSPs can solidify their positions as vital contributors to clients’ cyber security posture.

SEC-MSP

Key SEC regulations impacting MSPs and MSSPs

The SEC has recently greenlit a groundbreaking rule mandating publicly traded companies to swiftly report significant cyberattacks within four business days. The 3-2 vote approval highlights the commitment to ensuring consistent and timely reporting, particularly when an incident holds material importance for shareholders.

The rule is not just about reacting to incidents. Public companies must annually disclose cybersecurity risk management, strategy, and governance details in their Form 10-K filings. This includes outlining processes for identifying and handling cybersecurity risks, along with highlighting board oversight and management expertise.

In addition to the recent cybersecurity disclosure rule, it’s essential to acknowledge the broader regulatory landscape that impacts cybersecurity practices, particularly for publicly traded companies. For MSPs and MSSPs, compliance with SEC regulations offers a dual advantage. Firstly, it demonstrates a commitment to comprehensive security practices beyond just regulatory requirements. Secondly, it showcases expertise in implementing and maintaining stringent controls, fostering a sense of trust and reliability among clients.

By aligning cybersecurity practices with broader regulatory frameworks, MSPs and MSSPs not only meet compliance standards but also position themselves as security leaders. In addition to building credibility, it also opens avenues for additional business opportunities as organizations increasingly prioritize partners with proven security expertise. As such, understanding and adhering to these interconnected regulations becomes a strategic advantage.

Challenges faced by MSPs and MSSPs

  • Increased compliance burden and potential penalties: Publicly traded companies are now facing heightened compliance requirements with the SEC’s stringent new rule. For MSPs and MSSPs, this translates into an increased burden to ensure clients adhere to reporting requirements, with potential penalties for non-compliance.
  • Shifting client expectations: Client expectations are evolving rapidly, with a growing demand for demonstrably robust security practices. MSPs and MSSPs must adapt to meet these changing expectations, aligning their offerings with the need for comprehensive cybersecurity measures. This shift necessitates constant vigilance and adjustment to stay ahead of evolving security requirements.
  • Evolving threat landscape and continuous improvement: The dynamic nature of the threat landscape poses a continuous challenge. MSPs and MSSPs must remain agile and proactive in the face of emerging cyber threats. The need for ongoing improvement in security measures is critical, requiring constant adaptation to emerging risks and the implementation of state-of-the-art defenses.

Practical tips for MSPs and MSSPs:

Ensuring robust cybersecurity practices and compliance in the wake of the SEC’s new regulations requires strategic measures. Here are practical tips for MSPs and MSSPs:

  • Review internal security practices and policies: Begin by conducting a thorough review of internal security practices and policies. Ensure alignment with the latest industry standards and regulatory requirements. Identify areas for improvement and implement necessary updates to fortify your own cybersecurity posture.
  • Invest in advanced security tools and expertise: Stay ahead of the cybersecurity curve by investing in advanced SSPM solutions and cloud security platforms posture management tools. Leverage cutting-edge technologies like CheckRed that can effectively identify, alert, and assist in mitigating risks.
  • Develop efficient incident response protocols and reporting procedures: Craft efficient incident response protocols tailored to the requirements of the new SEC regulations. Define clear reporting procedures to ensure timely and accurate disclosure of cybersecurity incidents.
  • Proactively offer compliance-focused security services: Anticipate the needs of your clients by proactively offering compliance-focused security services. Position yourself as a valuable partner in ensuring regulatory adherence. Tailor your services to assist clients in meeting the specific cybersecurity standards mandated by the SEC, showcasing your commitment to their success.
  • Stay informed about evolving regulations and the threat landscape: Maintain a vigilant stance by staying informed about evolving regulations and the dynamic threat landscape. It is important to update and adapt to changing compliance requirements and emerging cyber threats. Proactive information gathering ensures you are well-equipped to navigate the complexities of the cybersecurity landscape effectively.

CheckRed: Elevating your cloud security posture

CheckRed, an all-encompassing SaaS Security Posture Management (SSPM) and Cloud Security Posture Management (CSPM) solution, is designed to fortify your organization’s cloud security. Here’s why CheckRed stands out as a crucial asset in your cybersecurity arsenal:

  • Real-time SaaS and cloud security monitoring: CheckRed excels in real-time risk detection and monitoring, swiftly identifying and alerting users to potential risks before they escalate, ensuring a proactive defense against cyber threats.
  • Streamlined compliance management: Simplify adherence to industry regulations with CheckRed. It facilitates compliance management, allows customization of frameworks, and generates insightful reports, showcasing your commitment to various standards.
  • Guided incident remediation: In the face of an incident, CheckRed expedites incident response with remediation workflows, helping minimize potential damage and reducing downtime.

With CheckRed, MSPs and MSSPs save valuable time and resources, redirecting efforts to other critical tasks. CheckRed’s proactive approach enhances security posture management, effectively assisting in the mitigation of risks. For MSPs and MSSPs, having CheckRed as a security partner ensures peace of mind.

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