28 April 2004

Self-regulatory US organisations complete business continuity rule making

Self-regulatory US organisations complete business continuity rule making:

Earlier in April the Securities and Exchange Commission approved rules proposed by NASD and the New York Stock Exchange, which require NASD and NYSE members to develop business continuity plans that establish procedures relating to an emergency or significant business disruption.

Under the new rules, every NASD and NYSE member must develop a plan that addresses various aspects of business continuity, including data back-up and recovery, mission critical systems, and alternate communications between the firm and its employees and the firm and its customers.
In addition, a member's business continuity plan must address how the member will assure its customers' prompt access to their funds and securities in the event that the member determines that it is unable to continue its business. Every NASD and NYSE member also will be required to disclose to its customers a summary of its business continuity plan that addresses how the member intends to respond to potential disruptions of varying scope.

Commission approval of these rules represents another important step to address the risks faced by market participants in the post-September 11 environment. In September 2003, the Commission issued a policy statement setting forth its view that self-regulatory organisations operating trading markets and electronic communication networks should apply certain basic principles in their business continuity planning."

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