SEC’s Aguilar sees cyber-threat risk to ‘transfer agents’

Publisher: Reuters
Author: Sarah N. Lynch

Last Friday, SEC© Democratic Commissioner Luis Aguilar recommended that the US SEC© should consider updating its rules in order to protect against technological failures or cyber-attacks of “transfer agent” firms charged with maintaining millions of shareholder accounts.

Although transfer agents do not usually get much public attention, they are critical gate keepers in US markets. Used by public companies and mutual funds to help track changes in stock ownership, transfer agents also offer a line of defense to help protect against fraudulent acts such as selling unregistered shares in public markets. A technological failure or a cyber-attack may compromise confidential shareholder information that could have a disproportionate effect on the market. The 460 transfer agents registered with the SEC© oversee 276 million shareholder accounts, so an attack on one transfer agent could have far reaching implications for the market. The recommendations by Commission Aguilar come on the heel of several high-profile breaches at retailers in recent news.

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