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March 22, 2012
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News for operations and technology executives in financial services

Special Update on Wealth Management and Technology -- Part II
Welcome to the SIFMA Operations and Technology SmartBrief Special Update on Wealth Management and Technology.

The more plentiful information becomes, the more difficult it is to find and use what's important. Not having the right information at the right time can exact a heavy toll on any firm -- in missed opportunities or wrong turns. In this report, we focus on the differing needs of financial professionals and the types of information they must have to compete effectively every day in an increasingly turbulent global marketplace.

In Part I of this Special Update, which was published Tuesday, we reviewed emerging technology trends and shared expert views on how social media can be utilized best by wealth management professionals.

Today we will focus on data management -- including cybersecurity -- and provide an update on policy news affecting wealth management.
  Data Management 
  • Ruling raises doubt about protection for financial firms' software
    A federal appeals court reversed the conviction of a Goldman Sachs programmer who admitted that he took computer code related to Goldman's high-speed trading with him when he left the firm. The court said what he did wasn't a federal crime. "[T]he ruling raises questions about what sort of legal protection financial firms enjoy for technical knowledge that has become as important as capital or clients," the Economist said. The Economist (2/25) LinkedInFacebookTwitterEmail this Story
  • Hacker attacks on financial networks at all-time high, SWIFT says
    SWIFT, the operator of the world's largest network carrying financial transaction data, said it is confronted by an unprecedented level of attacks on its system by hackers. "Never has cyberterrorism and cyberactivity been such a threat," said Yawar Shah, chairman of the Society for Worldwide Interbank Financial Telecommunication. Get the latest on technology topics, such as cybersecurity, and the top industry trends affecting your business at SIFMA's Financial Services Technology Leaders Forum and Expo. Register today. Securities Technology Monitor (3/6) LinkedInFacebookTwitterEmail this Story
  • Report: Customer-facing bank software is short on security
    Banks have a lot of work to do before their customer-facing software is secure, particularly when it comes to mobile applications, according to a report by the software analysis firm Cast Software. "It's the exposure to the Internet that opens the doors for hackers to come in," said Bill Curtis, the firm's senior vice president. Bank Systems & Technology (3/7) LinkedInFacebookTwitterEmail this Story
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  Policy Watch 
  • SEC updates technology to bolster oversight, Schapiro says
    Mary Schapiro, chairman of the Securities and Exchange Commission, said the agency has started updating its technology to improve the way it supervises the markets. "Investors will enjoy the ease with which they access up-to-date information, malefactors will find themselves tracked by more comprehensive investigations, and [the securities industry] will benefit, I hope, from more focused and effective exams and a simpler filing process," Schapiro said at the SIFMA Compliance and Legal Society Annual Seminar in Miami Beach, Fla. Bloomberg (3/20), InvestmentNews (free registration) (3/20) LinkedInFacebookTwitterEmail this Story
  • SEC makes progress on consolidated audit trail, Schapiro says
    The May 6, 2010, flash crash prompted the Securities and Exchange Commission to develop a consolidated audit trail of activity. Chairman Mary Schapiro said the agency is proceeding with the effort. "At this point, the contours of the staff recommendations are being finalized, and I expect that the regulations will soon be considered by the full commission," Schapiro said. (3/15), Securities Technology Monitor (3/16) LinkedInFacebookTwitterEmail this Story
  • CFTC and SEC seek to prevent identity theft
    The Commodity Futures Trading Commission and the Securities and Exchange Commission have jointly proposed rules that would require brokerages and mutual funds to ramp up efforts to protect investors against identity theft. The proposal, which stems from the Dodd-Frank Act, would require the firms to develop identity-theft prevention programs. ( (2/28), (2/28) LinkedInFacebookTwitterEmail this Story
  • SEC's Gallagher says some advisers may be exempt from registration
    The Securities and Exchange Commission has the ability to make some types of investment advisers exempt from registration with the SEC, even though the Dodd-Frank Act mandates otherwise, SEC member Daniel Gallagher says. Advisers to private funds, for instance, may be exempted because the law doesn't distinguish between such advisers and those serving retail investors, and therefore is overly broad, Gallagher says. SIFMA's Private Client 2012 in Boston on April 18 is your opportunity to hear from CEOs on an array of issues, including the dynamics of dual registration for small firms. Register today. Bloomberg (3/8) LinkedInFacebookTwitterEmail this Story
  • Critics question effectiveness of SEC's risk-based exams
    As the Securities and Exchange Commission takes on oversight of 1,000 new funds this month, critics are saying the risk factors that trigger an exam are hard to understand, and they question whether exams target the industry's true risk. "That process has always been a mystery," said Mark Schonfeld, co-chairman of the Securities Enforcement Practice Group at Gibson Dunn & Crutcher. The SEC counters that its risk analytics tip it off to fraud. InvestmentNews (free registration) (3/18) LinkedInFacebookTwitterEmail this Story
  • Industry questions FINRA's proposal to disclose exam scores
    The Financial Industry Regulatory Authority has proposed publishing the licensing exam scores of individual brokers through its BrokerCheck system, sparking questions from the industry. "I believe publishing test scores makes no sense for someone who has been in the business for over 25 years," said April Kvalvik, a Bank of America Merrill Lynch broker. "As a CFP, I have mastered many complex areas in investing and financial planning. I do not think that scores from a 25-year-old test are relevant." InvestmentNews (free registration) (3/14) LinkedInFacebookTwitterEmail this Story
  • FINRA requests feedback on potential changes to BrokerCheck
    The Financial Industry Regulatory Authority is requesting comments on changes and additions to BrokerCheck, which provides information on FINRA member firms and individuals associated with those companies. The Securities and Exchange Commission has suggested including some new information in BrokerCheck. Those suggestions and others are included in the feedback request. FINRA (2/21), Securities Technology Monitor (2/23) LinkedInFacebookTwitterEmail this Story
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Product announcements appearing in SmartBrief are paid advertisements and do not reflect actual SIFMA endorsements. The news reported in SmartBrief does not necessarily reflect the official position of SIFMA.
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