Cybersecurity Disclosure Act of 2021

II 117TH CONGRESS 1ST SESSION S. 808 To amend the Securities Exchange Act of 1934 to promote transparency in the oversight of cybersecurity risks at publicly traded companies. IN THE SENATE OF THE UNITED STATES MARCH 17 (legislative day, MARCH 16), 2021 Mr. REED (for himself, Ms. COLLINS, Mr. WARNER, Mr. CRAMER, Ms. COR- TEZ MASTO, and Mr. WYDEN) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Securities Exchange Act of 1934 to promote transparency in the oversight of cybersecurity risks at publicly traded companies. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Cybersecurity Disclo- 4 sure Act of 2021’’. 5 SEC. 2. CYBERSECURITY TRANSPARENCY. 6 The Securities Exchange Act of 1934 (15 U.S.C. 78a 7 et seq.) is amended by inserting after section 14B (15 8 U.S.C. 78n–2) the following: 9 VerDate Sep 11 2014 04:36 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S808.IS S808 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 808 IS ‘‘SEC. 14C. CYBERSECURITY TRANSPARENCY. 1 ‘‘(a) DEFINITIONS.—In this section— 2 ‘‘(1) the term ‘cybersecurity’ means any action, 3 step, or measure to detect, prevent, deter, mitigate, 4 or address any cybersecurity threat or any potential 5 cybersecurity threat; 6 ‘‘(2) the term ‘cybersecurity threat’— 7 ‘‘(A) means an action, not protected by the 8 First Amendment to the Constitution of the 9 United States, on or through an information 10 system that may result in an unauthorized ef- 11 fort to adversely impact the security, avail- 12 ability, confidentiality, or integrity of an infor- 13 mation system or information that is stored on, 14 processed by, or transiting an information sys- 15 tem; and 16 ‘‘(B) does not include any action that sole- 17 ly involves a violation of a consumer term of 18 service or a consumer licensing agreement; 19 ‘‘(3) the term ‘information system’— 20 ‘‘(A) has the meaning given the term in 21 section 3502 of title 44, United States Code; 22 and 23 ‘‘(B) includes industrial control systems, 24 such as supervisory control and data acquisition 25 VerDate Sep 11 2014 04:36 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S808.IS S808 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 808 IS systems, distributed control systems, and pro- 1 grammable logic controllers; 2 ‘‘(4) the term ‘NIST’ means the National Insti- 3 tute of Standards and Technology; and 4 ‘‘(5) the term ‘reporting company’ means any 5 company that is an issuer— 6 ‘‘(A) the securities of which are registered 7 under section 12; or 8 ‘‘(B) that is required to file reports under 9 section 15(d). 10 ‘‘(b) REQUIREMENT TO ISSUE RULES.—Not later 11 than 360 days after the date of enactment of this section, 12 the Commission shall issue final rules to require each re- 13 porting company, in the annual report of the reporting 14 company submitted under section 13 or section 15(d) or 15 in the annual proxy statement of the reporting company 16 submitted under section 14(a)— 17 ‘‘(1) to disclose whether any member of the 18 governing body, such as the board of directors or 19 general partner, of the reporting company has exper- 20 tise or experience in cybersecurity and in such detail 21 as necessary to fully describe the nature of the ex- 22 pertise or experience; and 23 ‘‘(2) if no member of the governing body of the 24 reporting company has expertise or experience in cy- 25 VerDate Sep 11 2014 04:36 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S808.IS S808 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 808 IS bersecurity, to describe what other aspects of the re- 1 porting company’s cybersecurity were taken into ac- 2 count by any person, such as an official serving on 3 a nominating committee, that is responsible for iden- 4 tifying and evaluating nominees for membership to 5 the governing body. 6 ‘‘(c) CYBERSECURITY EXPERTISE OR EXPERI- 7 ENCE.—For purposes of subsection (b), the Commission, 8 in consultation with NIST, shall define what constitutes 9 expertise or experience in cybersecurity using commonly 10 defined roles, specialties, knowledge, skills, and abilities, 11 such as those provided in NIST Special Publication 800– 12 181, entitled ‘National Initiative for Cybersecurity Edu- 13 cation (NICE) Cybersecurity Workforce Framework’, or 14 any successor thereto.’’. 15 Æ VerDate Sep 11 2014 04:36 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S808.IS S808 pbinns on DSKJLVW7X2PROD with BILLS