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This implements the overall security strategy and is completely customizable by those authorized. Thus browsers can implement a particular Security Manager but as mentioned Applets cannot!
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In particular the Security Manager implements the differences between Java Applets (no local file operations etc.) and Applications
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Note you can download a Java Application that has NO Security Manager restrictions!
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In general Security Manager controls thread access, OS access, network access and other Java class access.
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It controls installation of Class Loaders
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It (will) process encryption based authentication mechanisms
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