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SEC Proposes Business Continuity, Data Backup Rules

MSPs and VARs that support the financial services vertical could get a business boost, thanks to a new proposal from the Securities and Exchange Commission. Indeed, the SEC’s proposed rule would require registered investment advisers to adopt and implement written business continuity and transition plans.

The SEC proposal potentially opens the door for IT service providers to develop and/or review business continuity plans and associated needs with financial services customers. The discussions could include security, backup, disaster recovery, and even company succession planning.

According to the SEC:

“The proposed rule is designed to ensure that investment advisers have plans in place to address operational and other risks related to a significant disruption in the adviser’s operations in order to minimize client and investor harm…

Business continuity and transition plans would assist advisers in preserving the continuity of advisory services in the event of business disruptions – whether temporary or permanent – such as a natural disaster, cyber-attack, technology failures, the departure of key personnel, and similar events.”

The SEC recommends that the business continuity plans cover:

  • maintenance of systems and protection of data;
  • pre-arranged alternative physical locations;
  • communication plans;
  • review of third-party service providers; and
  • plan of transition in the event the adviser is winding down or is unable to continue providing advisory services.

The proposal has a 60-day comment period before next steps potentially emerge. To submit a comment, IT service providers and investment advisors can leverage the SEC’s Internet submission form or send an e-mail to rule-comments@sec.gov.

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