Iosco, the International organization of Securities Commissions, has sounded the alarm about the growing danger of cyber attacks on financial markets, warning that firms and regulators around the world need to address the “uneven” response to the threat of online assaults.
Greg Medcraft, chairman of the board of Iosco, predicted that the next major financial shock – or “black swan event” – will come from cyber space, following a succession of attacks on financial players. He warned that there needed to be a more concerted effort to tackle cyber threats around the world.
Regulators are looking at producing a global “toolbox” next year to assess whether firms are managing their risks adequately. The idea is to identify risk management standards for detecting and responding to cyber incursions. The US Securities and Exchange Commission in April said it would examine the cyber resilience of more than 50 broker-dealers and investment advisers. SEC chairman Mary Jo White has said cyber threats were of “extraordinary and long-term seriousness”.
Iosco believes firms in the spotlight include broker dealers, fund managers, listed companies and the stock markets themselves. Mr Medcraft said: “The next black swan event will come from cyber space. It is important that we pay attention.”
Iosco, which is an umbrella body whose members include more than 120 securities regulators, has highlighted cyber risks after last year releasing a report showing more than half of securities exchanges had been on the receiving end of an attack. Some 89 per cent of the exchanges surveyed said they viewed cyber crime as a potential systemic risk.
Source: Financial Times