At the end of each month, Core Compliance & Legal Services, Inc. (“Core Compliance”) publishes a Risk Management Update (RMU), an in-depth article written by one of our staff members on a currently relevant topic in compliance, securities, and investment industry. In light of recent major natural disasters in the US – including Hurricane Sandy in 2012, the recent devastating tornado in Oklahoma, and current raging wildfires in the West – Core Compliance’s latest RMU, released the last week of June 2013, details the steps your business should take to assure preparedness in case of any emergency. In addition to disaster preparedness for your business, this article also discusses the need for a Business Continuity Plans (BCP) for other circumstances like “business interruptions, incapacitations or death of key personnel.”
A BCP is an essential compliance policy document, and it is mandated by the Securities and Exchange Commission (SEC) under Rule 206(4)-7 of the Investment Advisers Act of 1940, and by the Financial Industry Regulatory Authority (FINRA) under Rule 4370. A firm’s BCP will be reviewed by the SEC and FINRA during regulatory examinations, and therefore should be of great consideration to a firm’s compliance program. This RMU outlines ten “Critical Elements” of a BCP and provides a thorough “checklist” that a business can follow to structure an effective BCP. The ability to test the success of these internal controls, and regular training of staff about emergency situations, will prove valuable to the longevity of your business.
For more information or assistance regarding your compliance program, please contact us at (619) 278-0020 to schedule a consultation.