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10 FAQs (Frequently Asked Questions) to help understand and comply with the NIS 2 Directive requirements

10 FAQs (Frequently Asked Questions) to help understand and comply with the NIS 2 Directive requirements:

1. What is the NIS 2 Directive?

The NIS 2 (Network and Information Systems) Directive is an update to the 2016 NIS Directive aimed at strengthening cybersecurity and resilience in digital infrastructure across the European Union. It applies to a wide range of sectors, including energy, transport, healthcare, finance, and digital infrastructure.

2. Who is subject to the NIS 2 Directive?

NIS 2 applies to organizations of “essential importance” and “significant importance.” These entities include critical infrastructure, digital service providers, and companies operating in strategic sectors such as energy, transport, finance, healthcare, and telecommunications.

3. What are the main compliance requirements of the NIS 2 Directive?

Organizations must implement adequate technical and organizational measures to prevent, manage, and mitigate risks to the security of networks and information systems. This includes incident management, business continuity, supply chain security, protection against cyberattacks, and compliance with incident reporting obligations.

4. What are the key differences between NIS and NIS 2?

NIS 2 extends the scope to more sectors and enforces stricter penalties for non-compliance. It also introduces more rigorous governance, risk management, and cooperation requirements among EU Member States.

5. How can I determine if my company is subject to NIS 2?

Your company is subject to NIS 2 if it operates in one of the critical sectors listed in the directive. Typically, EU Member States are responsible for formally identifying entities subject to the new rules. It is advisable to check with national authorities and assess the potential impact on your organization.

6. What are the penalties for non-compliance with NIS 2?

Non-compliance with NIS 2 can result in significant administrative penalties, which may vary depending on the EU country and the severity of the breach. Fines can be up to 2% of the annual global turnover or €10 million, whichever is higher.

7. What are the deadlines for compliance with NIS 2?

NIS 2 must be transposed by EU Member States by 2024. Entities subject to the directive need to be prepared to comply with the new rules within the deadlines set by national regulations.

8. How can I implement a security management system compliant with NIS 2?

Implementing a compliant system requires thorough risk analysis, the definition of security policies, staff training, technical solutions such as firewalls, intrusion detection systems, vulnerability management, and a response plan for security incidents.

9. What security measures are required to protect critical systems?

Security measures include perimeter protection, data encryption, continuous network monitoring, vulnerability management, regular system audits, and a business continuity plan to ensure that essential services can continue during and after a cyberattack.

10. How does incident reporting work under NIS 2?

Entities subject to NIS 2 are required to promptly notify significant incidents to competent authorities (such as CERTs or national cybersecurity authorities). The notification must occur within 24 hours of identifying the incident, with regular updates on the resolution status.

These FAQs provide a basic guide, and each organization should consult legal and technical advisors to ensure proper compliance with the NIS 2 Directive.

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NIS 2 – Implementation Steps for Cybersecurity Risk Management Measures

Complying with regulations like the NIS 2 Directive can be complex, but having a clear plan simplifies the process. Below are the best practices for achieving compliance with Chapter IV of the NIS 2 Directive, which focuses on “Cybersecurity risk-management measures and reporting obligations.” This chapter is crucial for essential and important entities to comply with.

Step 1: Gain support from senior management
Although compliance with NIS 2 is mandatory, it is essential to secure senior management’s active support. Without it, the project may face delays, lack funding, and experience obstacles at every stage.

Step 2: Establish project management
Given the complexity of NIS 2, it is critical to approach it as a formal project, with clear roles, responsibilities, milestones, and outcomes. A structured management approach is key to success.

Step 3: Conduct initial training
Cybersecurity training is emphasized in NIS 2. Early training helps all involved parties understand the regulation and its importance, facilitating a smoother project initiation.

Step 4: Develop an Information System Security Policy
A top-level policy, while not required by NIS 2, is best practice according to international standards. It defines cybersecurity goals, responsibilities, and success metrics.

Step 5: Define the Risk Management Methodology
To comply with NIS 2, a clear risk management process is necessary, detailing how risks are assessed and managed within the organization.

Step 6: Conduct risk assessment and treatment
Identify potential threats to information systems, assess the risks, and implement mitigation measures for the most critical threats, ensuring actions are based on a comprehensive analysis.

Step 7: Create and approve a Risk Treatment Plan
This plan outlines the cybersecurity measures to be implemented, including timelines and responsibilities. Approval from senior management is crucial.

Step 8: Implement cybersecurity measures
Implement new security processes, activities, and potentially technologies, based on the risk assessment outcomes. Formalize these through documented policies and procedures.

Step 9: Strengthen supply chain security
NIS 2 highlights the importance of managing risks related to suppliers. Assess suppliers’ vulnerabilities and include security clauses in contracts.

Step 10: Assess cybersecurity effectiveness
Monitor cybersecurity continuously, conduct internal audits, and perform management reviews to ensure the effectiveness of cybersecurity measures.

Step 11: Implement incident reporting protocols
Significant incidents must be reported to the CSIRT or relevant authority, along with service recipients, following a defined reporting process.

Step 12: Continue cybersecurity training
Regular training for all employees, including senior management, is essential. Focus on relevant topics and choose cost-effective training methods.

Step 13: Conduct periodic internal audits
Although not required by NIS 2, regular internal audits are best practice for identifying nonconformities and providing senior management with an accurate cybersecurity status.

Step 14: Conduct periodic management reviews
Formal reviews provide senior management with the information needed to make key decisions about cybersecurity, including budget allocation and defining objectives.

Step 15: Execute corrective actions
Corrective actions ensure that any identified nonconformities are addressed, preventing recurrence.

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What are the main cybersecurity requirements of NIS 2?


Surprisingly, only Chapter IV “Cybersecurity risk-management measures and reporting
obligations” defines what essential and important entities must do to comply with NIS 2.
All the other chapters are not relevant for these companies, because they specify the
obligations of the EU countries (Member States), and what government agencies must do
to enforce NIS 2.
Chapter IV has the following articles:

  • Article 20 – Governance
  • Article 21 – Cybersecurity risk-management measures
  • Article 22 – Union level coordinated security risk assessments of critical supply
    chains
  • Article 23 – Reporting obligations
  • Article 24 – Use of European cybersecurity certification schemes
  • Article 25 – Standardisation
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Obligations under the DORA (Digital Operational Resilience Act) Regulation

Obligations under the DORA Regulation

The DORA Regulation, once in force (15/1/2025), will require all affected entities to adopt specific technical and organisational measures to ensure digital operational resilience.

The financial institutions involved will have to prioritise the implementation of an ICT risk management process, aimed at identifying cyber threats in advance and minimising the impact of cyber incidents. The main responsibility for this process will lie with the company’s management body, which will have to assume ‘full and ultimate responsibility’ for:

  • ICT risk management;
  • The definition and approval of the digital operational resilience strategy;
  • The review and approval of the company’s policy regarding third-party ICT service providers.

Risk Assessment Approach

In detail, the DORA Regulation establishes the adoption of a risk assessment approach that includes:

  • The definition of requirements to harmonise the ICT risk management process with a comprehensive view of business processes;
  • The creation of an ICT Risk Management Framework;
  • The development of a resilient strategy for Disaster Recovery and Business Continuity.

Financial institutions will also need to be able to classify cyber threats and incidents related to ICT vendors, based on criteria established by the DORA Regulation, such as:

  • The number and significance of customers or financial counterparties involved;
  • The duration of the incident;
  • The loss of data, assessing the availability, authenticity, integrity and confidentiality of the data.

Internal Procedures and Communication

Institutions should establish internal procedures to identify, record and categorise incidents, assigning roles and responsibilities and developing communication plans for stakeholders, including board members.

The classification and tracking of incidents are functional to the implementation of a reporting system to the competent bodies provided for in Article 46 of the DORA Regulation. This includes:

Compliance with Third Party ICT Service Providers

In the context of ICT risk management, the DORA Regulation also imposes obligations towards third-party suppliers, requiring:

  • The identification, classification and documentation of all processes that depend on third-party suppliers;
  • The inclusion of contractual clauses to ensure adequate monitoring of supplier activities on services critical to financial operations.

Information Sharing and Resilience Testing

The DORA Regulation also promotes, through Article 45, a voluntary cyber threat intelligence sharing programme among financial actors, aimed at preventing new threats and improving the resilience of the financial ecosystem.

Finally, financial institutions will have to regularly test their operational resilience through periodic tests based on the Threat Led Penetration Testing method, tailored to the size, type of business and risk profile of the institution.

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Introduction to DORA – Digital Operational Resilience Act

The Digital Operational Resilience Act (DORA) Regulation 2022/2554/EU is a European regulation that aims to strengthen the digital operational resilience of the EU internal market in the context of increasingly sophisticated cyber threats.

The DORA Regulation sets out the technical standards that financial entities and their critical third-party technology service providers must implement in their ICT systems by 17 January 2025.

Target audience
The DORA Regulation is aimed at banks, insurance companies, financial institutions and ICT service providers.

What it establishes
DORA sets out the technical requirements for financial entities and ITC providers in four areas:

  • ICT risk management and governance
  • Incident reporting and response
  • Digital operational resilience testing
  • Third Party Risk Management
  1. ICT Risk Management (Articles 5-16)
    The first pillar of DORA concerns operational risk management. Financial entities are required to identify, categorise and manage the operational risks associated with their digital activities, with an emphasis on involving the entire organisation in adopting and maintaining measures to meet the identified tolerance level, with particular emphasis on critical functions and the evolution of Business Continuity into comprehensive resilience systems.
  2. ICT Incident Management (Articles 17-23)
    Incident management is a key aspect of ensuring operational resilience in the financial sector and digital services, and the DORA Regulation sets out guidelines involving a rapid, coordinated and well-planned response to events that threaten the security and business continuity of companies in the digital environment, as well as conducting a post-mortem analysis to identify lessons learned and areas for improvement. This continuous learning process is essential to strengthen operational resilience and prevent future similar incidents.
  3. Digital Operational Resilience Testing (Articles 24-27)
    With a view to achieving operational resilience, it is important to adopt testing as an integral part of the risk management strategy. DORA-compliant digital operational resilience testing aims to assess an organisation’s ability to withstand and recover from adverse events in the digital environment.
  4. Third Party ICT Risk Management (Articles 28-30)
    Third Party Management according to the DORA Regulation requires companies to proactively and carefully manage third party relationships to protect digital infrastructure and ensure operational resilience by assessing and monitoring the risks associated with the ICT vendor supply chain in relation to the type, criticality and number of services provided. Financial entities are required to conduct thorough due diligence before engaging with a third party and monitor it over time, integrate security requirements into contracts, and contingency measures in the event of contract termination.
  5. Information and Intelligence Sharing (Article 45)
    The fifth pillar of DORA promotes collaboration and information sharing between financial entities and competent authorities to protect against common threats, vulnerabilities, and to support overall defence capabilities to effectively address digital threats, including cross-border threats.