Notice: This post was migrated from one of our legacy websites and might not display correctly.
As Hurricane Harvey touches down on U.S. soil and we hope for the safety of the millions in its path, we encourage all firms, even those outside Harvey’s path of flooding and damaging winds, to consider their BCM readiness for such an event.
Business Continuity Plans are designed to ensure firms have conducted sufficient advance preparation so as to minimize potential harm to clients or investors due to interrupted services. The SEC has made numerous statements regarding the value of BCM plans and have proposed a rule to enhance regulatory safeguards to mitigate these risks to the industry and to investors. Weather is only one of the scenarios in which a Business Continuity scenario may be required; other scenarios include cyber-attack, technology failures, departure of key personnel and other events.
A BCM plan should outline procedures to:
- Minimize the impact of the interruption as much as possible
- Sustain a minimally acceptable level of services for an extended period of time
- Return to normal business activities as quickly as possible
The reality is that in a natural disaster scenario, your personnel and clients in the immediate area of the disaster will have other considerations, most importantly their physical safety and that of their families. The U.S. government provides resources for individuals through www.ready.gov to plan ahead for such events. A BCM plan for your firm that has been thought through, well-vetted and tested can alleviate one component of the logistical stress inherent to an event like Hurricane Harvey, as well as protect your clients and investors.
And because you can’t always predict when a BCM scenario will occur, we recommend asking the following questions proactively, rather than reactively:
- Are your written policies and procedures outlining BCM plans detailed enough?
- Are your employees educated on the topic? How confident are you that they would know what to do in a BCM scenario?
- Have you designated responsible parties for running BCM operations? This includes both owning the policy and running point on the day of an event.
- Do you know what you would tell employees and clients, when and how you would distribute communications? As part of your BCM plan, you can outline who is responsible for such communications and even keep drafts at the ready.
- Do you have a list of your critical vendors, and are you comfortable with their BCM procedures? Have you coordinated with them on your plans?
- If your systems at your primary office location went down, would you be able to provide any services to clients? Is the data backed up?
- When is the last time you tested your BCM procedures? If not within the last year, we highly encourage that you prioritize this.
In the event (like a hurricane or large storm) where you may have a few days notice, we recommend the following action items:
- Send out a reminder about the firm’s BCM Plan and what messages employees can expect from the firm
- Double check that the “call lists” are up to date or the call out system is functioning properly
- Double check with building management that physical safety protocols are in place and what they’re planning for the event
- Remind each employee they should have a copy of the BCM Plan at home for reference
- Remind employees that the firm will inform them about reporting to work after the event is over
Ascendant Compliance Management provides multiple services regarding Business Continuity, covering both working with you to craft policies and procedures, as well as assistance with data loss prevention, cybersecurity and testing. Contact us today to learn more.
Subscribe to CSS Blog
CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.