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Are your securities operations sufficiently resilient? A business continuity briefing
Lethal avian influenza viruses with pandemic potential continue to mutate and spread worldwide. If one of these viruses were to cross the pandemic threshold, it would present securities firms with unprecedented challenges that could threaten their franchises just as surely as the liquidity concerns stemming from today's credit market problems. Moreover, increasing numbers of operations and business continuity managers have come to recognise that, even if a severe pandemic does not develop in the near future, preparations for such a threat are extremely valuable. If a firm prepares adequately for a pandemic, it has met today's 'acid test' for operational resiliency. This paper seeks to provide actionable guidance on key issues raised by recent efforts of the US securities industry to ensure that markets will function in a pandemic. This includes lessons learned from the 2007 Pandemic Flu Exercise for the US Financial Sector, as well as follow-up discussions that are taking place between regulators and the industry concerning potential regulatory forbearance. In addition, in view of the central role that remote access plays in continuity plans for the financial sector, measures to address potential Internet congestion are also discussed.
The full article is available to institutions that have subscribed to the journal.
Alton Harvey is Chief of the Office of Contingency Planning and has worked on crisis management issues within the Securities and Exchange Commission’s Division of Market Regulation since the October 1987 market break. Since September 11th, he has taken an active role in efforts to work with other agencies and the securities industry to enhance market resiliency to a wide range of natural and manmade threats. He holds a BA from Georgetown University and a JD from the National Law Center at George Washington University.