Cybersecurity Systems and Risks Reporting Act

Summary: Cybersecurity Systems and Risks Reporting Act This bill amends the Sarbanes-Oxley Act of 2002 to apply to cybersecurity systems and cybersecurity systems officers the same requirements regarding corporate responsibility for financial reports and managements assessments of internal control structures and procedures for financial reporting as apply to public companies subject to oversight by the Securities and Exchange Commission (SEC). The SEC shall issue rules to define cybersecurity expert and require each issuer of securities to disclose whether or not (and if not, the reasons why) the issuer's audit committee has at least one member who is a cybersecurity expert. The SEC shall review an issuer's information systems and cybersecurity systems statements. In scheduling the such reviews the SEC shall consider, among other things, issuers that have issued cybersecurity risks disclosures.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cybersecurity Systems and Risks 
Reporting Act''.

SEC. 2. CYBERSECURITY AND INFORMATION SYSTEM REQUIREMENTS.

    (a) Definitions.--Section 2(a) of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7201(a)) is amended--
            (1) in paragraph (2), by inserting after ``financial 
        statements'' the following: ``and information systems'';
            (2) in paragraph (3)(A), by striking ``and financial'' and 
        inserting ``, financial, and cybersecurity systems'';
            (3) in paragraph (10)(B), by inserting after ``quality 
        control policies and procedures,'' the following: 
        ``cybersecurity systems standards and practices,''; and
            (4) by adding at the end the following:
            ``(18) Information system.--The term `information system' 
        means a set of activities, involving people, processes, data, 
        or technology, which enable the issuer to obtain, generate, 
        use, and communicate transactions and information to maintain 
        accountability and measure and review the issuer's performance 
        or progress towards achievement of objectives.
            ``(19) Cybersecurity system.--The term `cybersecurity 
        system' means a set of activities or state, involving people, 
        processes, data or technology, whereby the protection of an 
        information system of the issuer is secured from, or defended 
        against, damage, unauthorized use or modification, 
        misdirection, disruption or exploitation.
            ``(20) Cybersecurity risk.--The term `cybersecurity risk' 
        means a significant vulnerability to, or a significant 
        deficiency in, the security and defense activities of a 
        cybersecurity system.''.
    (b) Corporate Responsibility.--Section 302 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7241) is amended--
            (1) in the heading of such section, by inserting after 
        ``reports'' the following: ``and information systems''; and
            (2) in subsection (a)--
                    (A) by striking ``and the principal financial 
                officer or officers,'' and inserting ``, the principal 
                financial officer or officers, and the principal 
                cybersecurity systems officer or officers'';
                    (B) in paragraph (4), by striking ``internal 
                controls'' each place such term appears and inserting 
                ``internal controls and cybersecurity systems'';
                    (C) in paragraph (5)--
                            (i) in subparagraph (A)--
                                    (I) by inserting after ``operation 
                                of internal controls'' the following: 
                                ``and cybersecurity systems''; and
                                    (II) by inserting before the 
                                semicolon the following: ``and any 
                                significant cybersecurity risks in 
                                issuer's information systems''; and
                            (ii) in subparagraph (B), by inserting 
                        before the semicolon the following: ``, 
                        cybersecurity systems, or information 
                        systems''; and
                    (D) in paragraph (6)--
                            (i) by striking ``internal controls'' each 
                        place such term appears and inserting 
                        ``internal controls, cybersecurity systems, or 
                        information systems''; and
                            (ii) by striking ``significant 
                        deficiencies'' and inserting ``cybersecurity 
                        risks, significant deficiencies,''.
    (c) Management Assessment.--Section 404 of the Sarbanes-Oxley Act 
of 2002 (15 U.S.C. 7262) is amended--
            (1) in the heading of such section, by inserting after 
        ``controls'' the following: ``and information systems'';
            (2) in subsection (a)--
                    (A) by inserting after ``contain an internal 
                control'' the following: ``and information systems'';
                    (B) in paragraph (1), by striking ``an adequate 
                internal control structure and procedures for financial 
                reporting'' and inserting ``adequate internal control 
                and cybersecurity systems structures and procedures for 
                financial and information systems reporting''; and
                    (C) by amending paragraph (2) to read as follows:
            ``(2) contain assessments, as of the end of the most recent 
        fiscal year of the issuer, of the effectiveness of--
                    ``(A) the internal control structure and procedures 
                of the issuer for financial reporting; and
                    ``(B) the cybersecurity systems structure of the 
                issuer.''; and
            (3) in subsection (b)--
                    (A) in the heading of such subsection, by inserting 
                after ``Internal Control'' the following; ``and 
                Cybersecurity Systems''; and
                    (B) by striking ``internal control assessment'' and 
                inserting ``internal control and cybersecurity system 
                structure assessments''.
    (d) Disclosure of Expert.--Section 407 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7265) is amended--
            (1) in the heading of such section, by striking ``expert'' 
        and inserting ``and cybersecurity systems experts'';
            (2) in subsection (a)--
                    (A) in the heading of such subsection, by striking 
                ``Expert'' and inserting ``and Cybersecurity Experts''; 
                and
                    (B) by striking ``, as such term is defined by the 
                Commission'' and inserting ``and at least 1 member who 
                is a cybersecurity systems expert, as such terms are 
                defined by the Commission in consultation with the 
                Secretary of Homeland Security and the Secretary of 
                Commerce''; and
            (3) by striking subsection (c) and inserting the following:
    ``(c) Considerations With Respect to Cybersecurity Experts.--In 
defining the term `cybersecurity expert' for purposes of subsection 
(a), the Commission shall, in consultation with the Secretary of 
Homeland Security and the Secretary of Commerce, consider whether a 
person has, through education or experience as an information 
technology officer or information systems security officer, or from a 
position involving the performance of similar functions--
            ``(1) an understanding of generally accepted principles, 
        practices, and law relating to computer security, computer 
        network security, and data security and privacy;
            ``(2) experience in--
                    ``(A) the preparation of information systems audits 
                for cybersecurity risk discovery; and
                    ``(B) the maintenance, implementation, and 
                monitoring of information systems and their 
                cybersecurity systems;
            ``(3) experience with information systems aspects of 
        internal accounting controls; and
            ``(4) an understanding of audit committee functions.''.
    (e) Enhanced Review.--Section 408 of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7265) is amended--
            (1) in subsection (a), by striking ``financial statement'' 
        and inserting ``financial, information systems, and 
        cybersecurity systems statements''; and
            (2) in subsection (b)--
                    (A) in paragraph (5), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (6) as paragraph 
                (7); and
                    (C) by inserting after paragraph (5) the following:
            ``(6) issuers that have issued cybersecurity risks 
        disclosures; and''.
    (f) Clerical Amendment.--The table of contents in section 1(b) of 
the Sarbanes-Oxley Act of 2002 is amended--
            (1) in the item relating to section 302, by inserting after 
        ``REPORTS'' the following: ``AND INFORMATION SYSTEMS'';
            (2) in the item relating to section 404, by inserting after 
        ``CONTROLS'' the following: ``AND INFORMATION SYSTEMS''; and
            (3) in the item relating to section 407, by striking 
        ``EXPERT'' and inserting ``AND CYBERSECURITY SYSTEMS EXPERTS''.