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Thursday, September 21, 2017|
One of Fundsters' Biggest Fears Came True, But How Much?
One of fundsters' biggest fears came true last summer. Yet it's not clear what effect, if any, this will have on asset managers, mutual funds, or investors.
Yesterday, in a statement on cybersecurity, SEC Chairman Jay Clayton revealed that last year there was an intrusion into the regulatory agency's EDGAR test filing system. He says that last month the agency figured out that the hack "may have provided the basis for illicit gain through trading." Clayton assures the public that the software vulnerability in the test filing system "was patched promptly after discovery."
The New York Times and the Wall Street Journal both covered Clayton's revelation.
Investment companies (the official term, under federal law, for mutual funds) are among the many filers who use the EDGAR system. Clayton provides no details as to what or whose information was (or might have been) accessed, other than that it was nonpublic and that SEC staff think the hack "did not result in unauthorized access to personally identifiable information, jeopardize the operations of the Commission, or result in systemic risk." Yet he does confirm that the investigation is ongoing.
If Clayton's remarks spark a public debate over cybersecurity issues at the SEC, it won't be the first time. Back in 2012 a fired SEC employee attacked the agency on a host of fronts, including via accusations of cybersecurity vulnerabilities connected to the SEC and the stock market. And as recently as March, mutual fund industry legal eagles and other insiders polled at an industry conference pointed to cybersecurity at the SEC, specifically around its new liquidity and disclosure rules for funds, as a big worry. In fact, 61 percent of the attendees polled, more than for any other issue, labeled such worries as one of the threats they are most concerned with, and another 34 percent labeled it an elevated threat.
On the flip side, Clayton's predecessor, Mary Jo White, often talked about cybersecurity, calling it "the biggest systemic risk" facing fundsters and the rest of the financial sector.
Printed from: MFWire.com/story.asp?s=57034
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