Shareholder Authentication (published 2015)

• Table of Contents
• Introduction
  • Universe of Transactions
    • Nature of Participants in Shareholder Transactions
    • Types of Shareholder Transactions
    • Means of Transmission of Transaction Requests
• Authentication In Theory
  • Principles of Authentication
    • The First Authentication Factor: What You Know
    • The Second Authentication Factor: What You Have
    • The Third Authentication Factor: What You Are
    • Multi-Factor Authentication
    • Non-Traditional Authentication Factors
    • Mutual Authentication
    • Positive and Negative Authentication Factors
  • Limitations of Authentication
    • Limitations of Authentication Measures in Common Use
    • Limitations of Authentication Measures Generally
• Authentication In Practice
  • Technological Solutions
    • Shareholder Knowledge
    • Hardware and Software Tokens
    • Biometrics
    • Behavioral Patterns
    • Protection of Authenticated Sessions
    • Authentication of Devices
    • Authentication of Transactions
    • Authentication of Fund Groups (Mutual Authentication)
  • Operational Initiatives
    • Overall Threat Environment
    • Risks Associated with Authentication Systems
    • Risks Associated with Particular Transactions
    • Potential Legal Consequences of Transactional Fraud
    • Limiting Potential for Damage from Fraudulent Transactions
    • Protection of Online Transaction Systems
  • Educational Efforts
    • Employee Training and Awareness
    • Shareholder Awareness
• Insurance
• Glossary
• Further Reading

Historically, fund shareholder transaction requests were typically transmitted by traditional means (e.g., letter, facsimile, automated telephone systems, voice over the telephone). In recent years, transaction requests have increasingly been transmitted online (e.g., over the Internet), including through the use of mobile devices and mobile apps. The fund groups consulted for this study report that voice and online transactions together comprise a substantial percentage of fund transactions, and predict that online transactions will eventually become the predominant means of effecting shareholder transactions. The once-common use of facsimile transmissions or automated telephone systems appears to have correspondingly declined in recent years.

The various means of transmitting transactions may differ with respect to the level of risk presented to the fund groups. And fund groups may accordingly impose different restrictions on transactions based on the means of transmitting the transaction request.