04 June 2004

NASD publishes notice to members on business continuity planning regulations

NASD publishes notice to members on business continuity planning regulations:

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.

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