Cybersecurity at the SEC
may be the single biggest concern keeping fundsters and their lawyer, vendor, and accountant allies up at night these days.
| Tom Fuccillo|
Allianz Global Investors US
Chief Regulatory Counsel
This morning, for the second year in a row, the ICI
closed out its annual Mutual Funds and Investment Management
(MFIM) conference with a panel discussion and audience voting session on possible threats that could be worrying fundsters. 61 percent of the audience, more than for any other industry-related threats, labeled concerns with the SEC's cybersecurity in the context of new liquidity and disclosure rules that are looming as "red," one of the threats they are most concerned with (a la the Homeland Security threat level system). 34 percent classified the issue as yellow, an elevated threat, and 5 percent classified it as a low threat.
, associate general counsel for ICI, moderated the session, which also featured six panelists: Kathy Barr
, independent trustee and chair of the compliance committee at William Blair Funds
; Joe Carrier
, chief risk officer and chief audit executive at Legg Mason
; Buddy Donohue
, former SEC chief of staff under the immediate past chair, Mary Jo White; Tom Fuccillo
, managing director, chief regulatory counsel, head of funds and retail legal at Allianz Global Investors US
; Phil Kirstein
, independent compliance officer and senior officer to the boards at AB
; Nancy Morris
, managing director and chief compliance officer at Wellington Management Company
; and Bob Scales
, principal at Robert P. Scales, LLC
and former general counsel and chief compliance officer for the Columbia Acorn Funds. For each issue raised, the panelists voted and discussed before finding out the audience's votes on that issue.
The audience was slightly less concerned about the implementation of those new SEC liquidity and disclosure rules, with 41 percent choosing red and 49 percent yellow. And more than half of the audience is somewhat concerned about the long-term viability of the mutual fund industry, with 14 percent labeling it red and 44 percent choosing yellow.
Other potential threats that seem to be causing fundsters' sleep to suffer include: ransomware (54 percent red, 43 percent yellow); vendor reliance and oversight (red 32 percent, yellow 54 percent); uncertainty about the new regulatory environment under the new administration in Washington (32 percent red, 49 percent yellow); the maybe-or-maybe-not-dying DoL rule, also known as the fiduciary reg or the Conflict of Interest Rule (COIR) (26 percent red, 60 percent yellow); tax reform (23 percent red, 40 percent yellow); the anti-trust laws, as highlighted
by ICI general counsel David Blass
in his remarks on Monday (19 percent red, 39 percent yellow); the use of robotics and artificial intelligence in the fund industry (12 percent red, 38 percent yellow); the SEC's distribution in guise sweep (8 percent red, 75 percent yellow); and the planned U.S. shift to T+2 settlement, from T+3, scheduled for September (4 percent red, 39 percent yellow).
Non-industry issues are also keeping fundsters up at night. 87 percent are concerned about the U.S.'s continued role as a world leader, with 67 percent labeling the issue red and 20 percent as yellow. And 84 percent seem worried that World War Three might happen, with 41 percent labeling that red and 43 percent yellow.
About 1,300 people attended the 2017 ICI MFIM, held at the JW Marriott Desert Springs in Palm Desert, California.
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