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SEC, CFTC, and FINRA issue staff advisory on business continuity and disaster recovery planning

  • SEC (US Securities and Exchange Commission) Image

Aug 16, 2013

The SEC, the Commodity Futures Trading Commission (CFTC)’s Division of Swap Dealer and Intermediary Oversight, and the Financial Industry Regulatory Authority (FINRA) issued a joint staff advisory on business continuity and disaster recovery planning.

Following the closure of the U.S. equity and options markets for two days after Hurricane Sandy caused widespread damage along the northeast coast, a joint review was undertaken by the SEC, CFTC, and FINRA. The staff advisory issued by the SEC’s Office of Compliance Inspections and Examinations (OCIE), the CFTC’s Division of Swap Dealer and Intermediary Oversight, and FINRA is designed to encourage the review of business continuity plans by firms to "improve responses to and reduce recovery time after significant large-scale events."

The regulators met with firms affected by Hurricane Sandy to discuss their business continuity plans and disaster recover procedures to compile a list of best practices and lessons learned. The regulators are encouraging firms to review this list and their own disaster recovery plans and consider implementing the best practices and lessons learned to better react to similar events in the future. The advisory provides details on the following types of best practices and lessons learned:

  • Widespread disruption considerations.
  • Alternative locations considerations.
  • Vendor relationships.
  • Telecommunications services and technology considerations.
  • Communication plans.
  • Regulatory and compliance considerations.
  • Review and testing.

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