EU Parliament Introduce DORA, a Legislation For Cybersecurity

The Parliament of the European Union has introduced legislation for cybersecurity in relation to digital finance firms and crypto asset service providers.

The legislation which is dubbed Digital Operational Resilience Act (DORA) passed with a 556 support mark against 18 disapprovals. It is believed that DORA will help coordinate essential digital operations requirements across Europe.

According to PwC, a management consulting service company, the first draft of DORA was published by the European Commission in September 2020. It was drafted together with a digital finance strategy, legislative proposals on crypto assets, blockchain technology, and digital operational resilience, as well as a renewed retail payment strategy.

Seeing that the dependency on advanced technology has increased over the years, especially after the COVID-19 pandemic, this legislation was designed to create harmony in risk management requirements and the process of reporting any cybersecurity incident.  Eventually, it would strengthen the financial system in the EU when it has to do with resilience to digital technology-inclined activities.

EU Tech Firms And Crypto Entities Goes Under Regulation

Once implemented, financial institutions in all EU member states will be expected to oversee security events and report any irregularities to the appropriate authorities.

Also, EU regulators will be in charge of supervising tech service providers plus those who offer data analytics services. DORA cuts across several financial entities including traditional finance banking and investment firms as well electronic money and crypto-asset service providers.

According to Frances Fitzgerald, a center-right member of the European Parliament who contributed immensely to the drafting of the law, “Financial institutions and companies, including in the crypto space, hold extremely sensitive information about customers and it is vital that EU-wide digital security measures are put in place to defeat the threat that exists.”

The full enforcement of the DORA law is scheduled for 2025 when it must first been published in the Official Journal of the EU. Markedly, the regulation of the law would have taken place two years after this publication in the Office Journal. 

Apart from levying a new wave of sanctions against Russia, the EU has also been busy with the launch of Markets in Crypto Assets (MiCA), a regulatory framework for Europe’s crypto ecosystem. For now, the regulation has been approved by the European Council and is almost at the point of being rolled out.