Podcast Center
Video Center
Webcasts
Resource Center
Events
August 29, 2013 at 05:34 AM
The Securities and Exchange Commission is alerting advisors that it’s part of their fiduciary responsibility to ensure they have proper business continuity and disaster recovery plans in place.
The SEC’s National Exam Program alert, released Wednesday by the Office of Compliance Inspections and Examinations, comes on the heels of a jointly released advisory by the SEC, Commodity Futures Trading Commission and Financial Industry Regulatory Authority telling firms about the steps they should take to implement effective business continuity and disaster recovery plans now that hurricane season is here.
The SEC cites Hurricane Sandy, which caused significant and wide-ranging damage across the Northeast on Oct. 28 and 29, leading to the closure of the equities and options markets on Oct. 29 and 30.
The storm prompted the SEC’s National Examination Program to review the business continuity and disaster recovery plans of approximately 40 advisors in the impacted areas.
(Related story: Top 10 Global Cities at Risk From Coastal Flooding)
The SEC says that some advisors adopted business continuity plans that “did not adequately address and anticipate widespread events,” and that these advisors “generally experienced more interruptions in their key business operations and inconsistent communications with clients and employees. For example, some advisors did not have adequate plans addressing situations where key personnel, such as portfolio managers, were unable to work from home or other remote locations.”
