In remarks to the mutual fund industry by a commissioner of the SEC Luis Aguilar, he described "the risk of hackers gaining unauthorized access to funds' systems and communications to steal information about funds' investment strategies and pending transactions [and] front-run large, market-moving trades." Aguilar encouraged the industry to "get out in front of the problem to help prevent and mitigate investor harm."
Proper cybersecurity risk management among mutual fund and ETF providers requires a proactive, system-wide approach. Waiting until a breach occurs to prepare a response may be "too little, too late." Although no one-size-fits-all solution exists to manage cybersecurity risk, visionary and innovative fund providers may wish to consider the following three tips: