United States: Incident Response Plans Form An Essential Part Of Cybersecurity Frameworks

Cybersecurity has increasingly moved into the spotlight in recent years, with regulators and financial firms alike clambering to keep pace with rapidly changing demands as threats continue to evolve.

While much of the attention is justifiably focused on proactive prevention, equal emphasis must also be given to adequate reaction following a cyber incident. Increasingly, regulators are demanding companies have a detailed incident response plan (IRP) that is regularly practiced and updated on an ongoing basis. Such a plan is essential for clearly delineating responsibilities and processes for responding to a cyberattack, as well as proving to regulators and clients the firm has a plan to return to or maintain its normal operations in the event of a serious incident or breach.

Regulators are placing added emphasis on IRPs in their guidelines, tool kits and regulations. For example, when the New York Department of Financial Services (NYDFS) released its final cybersecurity rules for financial services companies in January, it required each covered entity's cybersecurity policy to include a written IRP that must be "designed to promptly respond to, and recover from, any Cybersecurity Event materially affecting the confidentiality, integrity or availability of the Covered Entity's Information Systems or the continuing functionality of any aspect of the Covered Entity's business or operations."

Similarly, the Securities and Exchange Commission (SEC) has long emphasized the importance of IRPs. In an April 2015 guidance, its Division of Investment Management stated that a cybersecurity strategy should include, among other elements, the development of an incident response plan. The agency's Office of Compliance Inspections and Examinations highlighted IRPs as an area of focus as part of its Cybersecurity Examination Initiative the same year, listing its inclusion of IRP reviews in OCIE examinations under "Key Takeaways" and indicating that examiners would review IRP integration into "regular personnel and vendor training."

Meanwhile, the Commodity Futures Trading Commission's (CFTC) September 2016 System Safeguards Testing Requirements regulations demand the creation of a "written plan documenting the derivatives clearing organization's policies, controls, procedures, and resources for identifying, responding to, mitigating, and recovering from security incidents, and the roles and responsibilities of its management, staff, and independent contractors in responding to security incidents." Other bodies, including the Federal Trade Commission, the National Institute of Standards and Technology and the Financial Industry Regulatory Authority (FINRA) have also underscored the importance of IRPs as part of a greater cybersecurity effort.

Cybersecurity is firmly within regulators' sights, and they have communicated to their regulated industries that IRPs are an important part of their expectations.

What Should Your IRP Include?

Although IRPs will vary depending on each firm's specific structure, risks and other factors, there are common general elements that should be incorporated. The NYDFS regulations provide an effective overview of what should be included. The regulations state an IRP should outline:

  • The internal processes for responding to a cybersecurity event.
  • Goals of the IRP.
  • Definition of clear roles, responsibilities and levels of decision-making authority.
  • External and internal communications and information sharing.
  • Documentation and reporting of cybersecurity events and related incident response activities.
  • Evaluation and revision, as necessary, of the IRP following a cyber event.

Identifying and halting the source of a breach is the primary priority, and these procedures and roles must be established prior to a breach to ensure a firm can react promptly and efficiently in order to minimize the damage incurred and return to normal operations as quickly as possible. To that end, an IRP should include communications and information-sharing processes, both within an organization, to improve reaction, and externally. The role of internal and/or external legal counsel in the IRP should be well delineated and defined. Depending on the nature of the breach and type of business affected, various government, law enforcement and regulatory bodies may need to be informed – such as the SEC, NYDFS, FBI, IRS and state attorneys general, or even the Department of Homeland Security. If clients' or consumers' data has been affected, a company would also be required to notify those clients or consumers of the breach. A company must also be prepared with a coordinated marketing and communications effort to mitigate any potentially negative publicity resulting from a cyberattack and have at least a general understanding of what their breach notification obligations would be – to regulators, law enforcement, and affected individuals such as clients or customers.

Finally, an IRP should detail steps taken immediately following a breach to ensure the same vulnerability cannot be exploited again. This should include identifying the requirements for remediation of any identified weaknesses in their systems and associated controls, as well as the evaluation and revision, if necessary, of the IRP itself in order to improve any shortcomings or failures that emerged during the incident. Overall, firms must demonstrate they are reacting with the appropriate level of seriousness.

Practice, Practice, Practice

Once the IRP is established, it cannot simply sit on the shelf until needed; the plan must become a functional aspect of a firm's ongoing operations. In addition to continuously evaluating emerging threats and vulnerabilities to adjust the IRP as required, a firm must not underestimate the importance of practicing or simulating a breach scenario in order to test the effectiveness of the IRP. Such run-throughs provide the opportunity to test the procedures laid out in the plan, and also give employees important training and experience in handling their responsibilities and operating within the prescribed chain of command. It also allows a firm to identify any weaknesses within its plan that can then be corrected – before a real cyber event takes place.

Rehearsing IRPs is more than merely best practice – some regulators expect it as an ongoing part of cybersecurity efforts. In its 2015 cybersecurity guidance, the SEC suggested that "routine testing of strategies could also enhance the effectiveness of any strategy." The SEC has also indicated it would examine a firms for information regarding its "process for conducting tests or exercises of its incident response plan, including the frequency of, and reports from, such testing and any responsive remediation efforts taken, if applicable." Meanwhile, FINRA suggests "involvement in industrywide, and firm-specific simulation exercises" may be an appropriate element of a firm's plan, as appropriate to the role and scale of a firm's business.

Cybersecurity has become an ever-present concern for businesses. Understandably, the focus has often been on prevention. However, even with the best planning, not every cyber event can be avoided, and a thorough, up-to-date and well-practiced IRP is an essential component of any cybersecurity plan.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.