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Business Continuity and Transition Plans

Monday, July 4, 2016

The Securities and Exchange Commission (SEC) has proposed a new rule that would require registered investment advisers to adopt and implement written business continuity and transition plans. The goal of this rule is to minimize client and investor harm should there be a significant disruption in the adviser’s operations.

Based on the proposed rule adviser’s plans should be based upon the particular risks associated with their operations. These plans should also include policies and procedures addressing the following specific components: 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 stepping down or unable to continue providing advisory services.

Under the proposal, adviser would be required to review the adequacy of their plan at least annually and retain related records.

The proposal will be published on the SEC’s website and in the Federal Register.  The comment period will be 60 days after publication in the Federal Register.

To submit a comment, please use the SEC’s Internet submission form or send an e-mail to rule-comments@sec.gov

If the rule becomes effective, the staff at Red Oak can assist you with the creation of these and other important documents.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.