Securities and Exchange Commission Chair Mary Jo White stressed the need for mutual fund directors to carefully monitor vendors in a speech Tuesday morning.
“Firms today rely on technology and third-party service providers for many key functions. A failure of just one functions can have potentially very serious consequences for funds and their investors,” White told the Mutual Fund Directors Forum Policy Conference in Washington, D.C.
She warned breakdowns in operational and liquidity risk management can result in harm very quickly.
With the fast, growing complexity of the mutual fund market, White said funds need to have directors and consultants with experience and expertise in a wide range of areas, such as cybersecurity, derivatives, liquidity, trading, pricing and fund distribution.
Speaking to cybersecurity, White said it is the shared responsibility of all regulators and market participants to safeguard the broader financial system.
After her speech, White said finalizing proposed rules for alternative fund holdings and other types of liquidity risk management is a priority for the commission this year.
The formal comment period for the proposals ended Monday, but the SEC is expected to accept submissions for an indefinite period.