What is a Cyber 'Trigger Event' under the GFSC Rules - and what firms need to do to evidence they have taken appropriate steps

Priority action for all regulated firms in Guernsey: Microsoft announced that email servers are being attacked, and the GFSC rules require you to record how you have reviewed your cyber security controls to address this.

In an alarming announcement earlier this month, Microsoft alerted all customers across the world that their Exchange email servers may have been compromised by “state-sponsored [attackers] operating out of China”. Microsoft then announced that it continues to see the attacks growing by “multiple actors taking advantage of unpatched systems”.

The new GFSC Cyber Security Rules, which all regulated firms must comply with immediately, foresaw that sinister events such as these will increasingly occur. The Rules require Boards to review their controls if there is a “trigger event” which is defined as a “significant occurrence which would indicate that the licensee may be susceptible to a cyber security event” including “a vulnerability announcement issued by a software or hardware provider” and “international warnings of cyber security threats, vulnerabilities or incidents”.

Here, we share Black Arrow’s observations on how this ‘trigger event’ occurred, and how firms in Guernsey can demonstrate compliance with the GFSC Cyber Security Rules.

An attack on Microsoft Exchange email servers across the world

On 3rd March 2021 Microsoft released a statement indicating that their on-premises email server, Microsoft Exchange, was subject to several zero-day exploits of  “critical” vulnerabilities. A zero-day exploit is where an attacker uses a previously unknown weakness in computer systems for which there is no known mitigation such as a software security patch from the vendor. Microsoft stated that it wanted to “emphasize the critical nature of these vulnerabilities” which was evidenced in the way it gave comprehensive advice on what their customers should do.

Attackers will make the best use of the zero-day vulnerability until the software vendor, in this case Microsoft, creates and releases a fix. Although Microsoft has now released a corrective software patch, the troubling feature of this incident is that Microsoft says that just applying the patch “will not evict an adversary who has already compromised a server”. This means that cyber security teams in Guernsey need to investigate and implement controls that will identify and address activity by someone who is already in the firm’s network.

What the GFSC Rules require you to do

Microsoft strongly urged customers to “update on-premises systems immediately”, which include those of local IT providers, but it highlighted that “Exchange Online is not affected”. It also advised thoroughly investigating specific Indicators of Compromise that it listed, to identify whether the environment had been compromised through these vulnerabilities.

In addition, the GFSC Rules require regulated firms to review, and importantly to record, whether their approach to cyber security is still appropriate in the light of a ‘trigger event’ such as this. This goes to the heart of the Rules, which highlights that cyber security is never a one-time project but that firms must periodically review their controls across people, operations and technology, especially after the major alert this month.

To be effective, the review should be objective and impartial, and it should cover people, operations and technology. Cyber security is owned by the Board, and can never be handed to IT as a one-stop-shop to achieve compliance.

At Black Arrow, we work with clients to perform documented assurance for events like this as well as undertaking a gap analysis that identifies the priority areas of focus for organisations to achieve and demonstrate compliance with the GFSC Rules. The GFSC Rules were established following the thematic review conducted by one of our founding directors. Contact us to gain a better understanding of how the recent attacks affect your business, and what you can do to improve your protection in line with GFSC requirements.