Business Continuity-Weather-Related Events

Recent U.S. natural disasters, especially Hurricane Sandy in 2012, underscore the importance of having a business continuity plan (“BCP”) that adequately addresses weather-related events. These natural disasters, though tragic, have taught financial services firms several valuable lessons on planning for hurricanes, blizzards, floods, earthquakes, tornadoes, wild fires, and other natural disasters. We share some observations and lessons learned to help broker-dealers and investment advisers prepare for future natural disasters. Read More…

Business Continuity Plan: Pandemic Preparedness

In accordance with FINRA Rule 4370 (Business Continuity Plans and Emergency Contact Information), a broker-dealer must have a business continuity plan addressing numerous elements, one of which is financial and operational assessments. This element requires the broker-dealer to assess the operational and other risks related to a significant business disruption, such as a pandemic. Public health officials report that the Zika virus, an infectious disease transmitted by mosquitoes, has reached the continental United States and is being locally transmitted in southern states. Now would be a good time for broker-dealers and other financial institutions to assess the adequacy of their business continuity plans for dealing with local or widespread outbreaks of the Zika Read More…

Loss of Key Personnel: How to Prepare

The loss of key personnel can have a devastating effect on a financial institution, especially small investment advisory firms. In a worst-case scenario, the loss forces the firm to shut down and leaves clients without a financial advisor to manage their money. The North American Securities Administrators Association (“NASAA”) addressed the loss of key personnel by state-registered investment advisers through the adoption of Model Rule 203(a)-1A, which governs business Read More…

Business Continuity and Transition Plans for RIAs

The Securities and Exchange Commission (“SEC”) recently proposed a new rule that would require registered investment advisers (“RIAs”) to adopt and implement written business continuity and transition plans.  The proposed rule is designed to ensure that RIAs have plans in place to address operational and other risks related to a significant disruption in the adviser’s operations in order to minimize client and investor harm.

“While an adviser may not always be able to prevent significant disruptions to its operations, advance planning and Read More…