sec exam requirementsThe SEC in June proposed a new rule that would require registered investment advisers to adopt and implement written business continuity and transition plans. The goal of the rule is to, “Ensure that investment advisers 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.”

A business continuity and transition plan helps firms preserve the continuity of advisory services in the event of business disruptions – whether temporary or permanent – such as a natural disaster, cyber-attack, ransomware hack, technology failures, the departure of key personnel, and similar events.

Firms may not always be able to prevent disruptions to its operations and advance planning and preparation can help mitigate the effects of such disruptions. Business continuity plans are good for business. Smart businesses already have business continuity plans in place.

The proposed rule would require a firm’s plan to be tailored for the firm’s specific risk profile, but should address the following components:

  • Maintenance of systems and protection of data
  • Pre-arranged alternative physical locations
  • Communication plans
  • Review of third-party service providers
  • Plan of transition in the event the adviser is winding down or is unable to continue providing advisory services
  • Address elements that are critical to minimizing and preparing for material service disruptions
  • Review the plan annually for effectiveness

ACE IT Solutions is offering a complimentary Business Continuity and Disaster Recovery assessment for firms affected by the SEC regulations. Contact us at 646.558.6358 to schedule the assessment and put the business continuity plan into place before it becomes a requirement.

Read more about the SEC rule proposal here:

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