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FINRA reviewing the effectiveness and efficiency of its business continuity rules

The US Financial Industry Regulatory Authority (FINRA) has announced a retrospective review of Rule 4370 (Business Continuity Plans and Emergency Contact Information) to assess its effectiveness and efficiency. In a Regulatory Notice FINRA said that it is requesting comments on Rule 4370 by April 26, 2019. Upon completion of the assessment, FINRA will consider appropriate next steps, which may include modifications to the rule; updated or additional guidance; administrative changes or technology improvements; or additional research and information gathering.

Rule 4370 currently requires a member firm to create, maintain, annually review and update upon any material change a written business continuity plan identifying procedures relating to an emergency or significant business disruption.

Each member firm has flexibility to tailor the business continuity plan to the size and needs of its business, provided that the plan ‘addresses the enumerated minimum elements to the extent applicable and necessary to the firm’.

The rule also requires each member firm to disclose to its customers how the business continuity plan addresses the possibility of a future significant business disruption and how the member firm plans to
respond to events of varying scope.

In addition, Rule 4370 requires each member firm to provide FINRA with prescribed emergency contact information.

Read the Regulatory Notice (PDF).



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