Exchanges and clearing houses should take a more prominent role in helping the securities market react to a sector-wide cyber attack, results from a simulated exercise conducted by the Securities Industry and Financial Markets Association (SIFMA) have suggested.
The Quantum Dawn 2 replicated a systemic cyber attack on the US financial system, giving the industry an opportunity to run through crucial response procedures where participants, government agencies and industry groups forge a coordinated response to such an event.
Findings of the July simulation, released yesterday by SIFMA and co-authors consultancies Deloitte and Touche, found overall the industry could respond well in a time of crisis, but called for greater cohesion between participants.
In particular, the report called upon the industry to, “Enhance the role of exchanges, clearing firms, and trusted government partners in cyber incident response and crisis management,” and “increase awareness about government resources available.”
The report also suggested the industry coordinate procedures for markets’ open and close decisions should a systemic cyber attack hit the securities industry, as a premature close would be a likely goal of any would-be attackers.
The scenario included coordinated attacks from entities inside and outside of the US securities industry attempting to disrupt equity markets and damage firms’ post-trade processing.
Commenting on the exercise’s findings, Judd Gregg, former senator and current SIFMA CEO, said cyber security was a top priority for the industry at this time and said greater information sharing was needed should an attack occur.
“Quantum Dawn 2 proved that information sharing between the private sector and the government is one of the most effective ways to combat cyber crime,” he said. “We hope this exercise will encourage Congress to pass legislation that promotes this sharing and other activities that will help our country more effectively mitigate cyber threats on the financial system.”