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 NASD
has published ‘Notice to Members 04-37’ which gives
timescales for when member firms must establish business continuity
plans and details what these must cover.
Under federal law, virtually every securities
firm doing business with the US public is a member of NASD. Roughly
5,200 brokerage firms with over 95,000 branch offices come under
its jurisdiction. All these companies will now be required to develop,
test and manage business continuity plans and provide documentary
evidence of this.
The full text of the notice can be read at
http://www.nasdr.com/2610_2004.asp#04-37
The effective dates rules are:
* Rule 3510
Clearing Firms: August 11, 2004
Introducing Firms: September 10, 2004
NASD Rule 3510 requires each member to create and maintain a
business continuity plan. Each member's plan must identify procedures
relating to an emergency or significant business disruption that
are "reasonably designed to enable the member to meet its existing
obligations to customers." In addition, such procedures must
address the member's existing relationships with other broker-dealers
and counter-parties. The business continuity plan must be made available
promptly upon request to NASD staff.
* Rule 3520
All Firms: June 14, 2004
Rule 3520 requires members to provide NASD with emergency contact
information and to update any information upon the occurrence of
a material change. The Rule requires members to designate two emergency
contact persons that NASD may contact in the event of a significant
business disruption.
NASD has also launched two tools which will
help firms comply with the new business continuity regulations.
These are:
* NASD
Small Firm Template for a Business Continuity Plan
* BCP
Repository Service
Recognising that not all firms have a secure, off-site facility
to store and update their BCP, NASD has arranged for EVault, a provider
of network backup and recovery software and services, to provide
a voluntary electronic repository service specifically designed
for NASD firms.
•Date:
7th May 2004 •Region: N.America •Type:
Article •Topic: Financial
sector
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