DTCC reports on business continuity progress

The US Depository Trust & Clearing Corporation (DTCC) has issued a report to the industry on its business continuity planning, detailing a number of sweeping changes it has made and calling for a global dialogue on ways to ensure the survivability and resilience of market infrastructure organisations.

The changes made in its business continuity plans by DTCC, the world's largest clearance and settlement organisation, are designed to ensure the safety and security of its clearing and settlement operations in the US. The report documents the many significant changes DTCC has made to its systems since 9/11 to ensure the integrity of its systems and operational capabilities and strengthen the safety of its employees.

Among the changes DTCC has made is a technological breakthrough in asynchronous data transmission and storage over long distances (more than 1,000 miles) and wide decentralisation of both DTCC's operations and data centres. It also includes enhancements to its communications network with the thousands of banks, broker/dealers, mutual fund companies, insurance carriers, financial planners, issuing/paying agents and transfer agents who interact with DTCC on a daily basis.

"We believe it is important to share DTCC's experience and the practical knowledge it has gained from the past two years to encourage wider and more informed discussion and focus on business continuity planning throughout the industry," said Jill Considine, DTCC chairman and CEO. "We hope this will help us, our participants and others in the market in their own thinking about these problems."

Among the key results presented in the report are:
* Diversification of operations: The broader diversification of data centres and operations personnel outside the New York City region, and continued plans to further diversify operational personnel to a new site well away from the area. DTCC's upgraded data and communications network allows data to easily flow to any of its multiple centres at any time, and all systems can be operated remotely by other data centres.

* New data replication technology: development of automated, fast, data mirroring that allows large volumes of data to be replicated at distances beyond 1,000 miles.

* Real-time processes: implementation of real-time straight through processing capabilities that would minimise or eliminate the loss of key data in the event of a major disaster or incident.

* Reinforced communications: enhancement of its existing communications network, now called SMART, to extend its more resilient, self-healing capabilities and the ability to seamlessly use any of multiple data centres for processing. It also has been provided greater capacity to handle all of its clearing corporations' data as well as all depository data. Participants' network connections are registered with the US Department of Homeland Security for priority restoration.

* Upgraded employee safety/crisis planning procedures: upgraded employee safety procedures and crisis planning, including the regular rotation of senior executives to locations outside New York City headquarters and establishment of crisis teams at the company's various locations.

* New cyber response teams: improved cyber response teams, procedures and safeguards.

According to the report, DTCC is planning a further dispersal of personnel outside the New York City region by 2005 in order to comply with the standards of an interagency task force report issued by the US Federal Reserve, Securities and Exchange Commission and other Federal regulators.

DTCC is also requiring most major customers of its depository subsidiary to test both their primary and backup sites with DTCC's various data centres once a year. The complete report is available here (PDF).

•Date: 5th March 2004 •Region: N.America •Type: Article •Topic: Financial sector
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