FINRA to make business continuity and disaster recovery testing participation mandatory for member firms

Published: Tuesday, 17 November 2015 08:36

FINRA, the US Financial Industry Regulatory Authority, has filed a rule with the Securities and Exchange Commission to enable it to require firms to participate in FINRA’s business continuity and disaster recovery testing.

The requirement is contained in FINRA’s Rule 4380, which has been recently adopted in response to the demands of Regulation SCI (Regulation Systems Compliance and Integrity). FINRA’s Regulation SCI business continuity and disaster recovery testing will be conducted once per year. Under Rule 4380, FINRA will designate member firms for mandatory participation.

Regulation SCI requires SCI entities, including FINRA, to test the operation of backup plans, at least once every 12 months and to coordinate the testing of backup plans on an industry- or sector-wide basis with other SCI entities. FINRA believes, based on preliminary discussions among SCI entities, that the yearly business continuity and disaster recovery testing will probably take the place of the current industry test facilitated by the Securities Industry and Financial Markets Association (SIFMA) each October.

More details (PDF).