Business Continuity Test A Success For USA Financial Services Industry

The Securities Industry Association (SIA), the Bond Market Association (TBMA), the Futures Industry Association (FIA) and the Financial Information Forum (FIF) on Saturday conducted an industry-wide business continuity planning (BCP) test as part of an extensive, ongoing and industry-driven initiative to verify and demonstrate the resilience of the securities markets. The test, which expanded on prior connectivity tests, included components for equities, fixed income, options, futures and settlement.

“This week, we took another important step towards ensuring the ability of our firms, markets and utilities to collectively operate through an emergency,” said Don Kittell, Executive Vice President of SIA. “Backup data centers, work area recovery facilities and backup communications capabilities across the industry performed exceptionally well.”

“The industry’s participation in this past Saturday’s test was superbly executed. The Street achieved its goal of testing firms’ back-up connectivity with “exchanges” in all markets,” said Joseph Sack, executive vice president of the Bond Market Association.

During the test, firms and service bureaus accounting for more than 80% of the market’s normal order volume connected simultaneously using backup data centers, backup communications links, alternate trading sites and alternate operations facilities to place test orders, executions and settlement interactions.

There were no broad problems for any individual exchange or firm, and where issues arose, the vast majority were corrected when identified, allowing firms and exchanges to proceed with test orders. There were no problems that would have taken days to resolve or would have jeopardized operations in any major market segment, were they to occur in a real emergency.

Over 150 firms participated and 30 of those firms registered and conducted tests for multiple corporate entities (i.e., subsidiaries). Participants represented all sizes and types of firms – large, midsize and smaller, New York-based and regional.

Members of the Financial Information Forum including the service bureaus of ADP, SunGard and Thomson participated as well. Representing over 45 broker dealers in the test, service bureaus account for significant transaction volume and play a mission-critical role in maintaining robust securities trading operations.

Manisha Kulkarni, Executive Director of the Financial Information Forum described the active role the service bureaus took in the testing process, stating “From the initial planning stages to conducting and reporting results, ADP, SunGard, and Thomson demonstrated their ability to manage business continuity testing in multi-client environments.”

In addition to facilitating service bureau participation in industry-wide testing, the Financial Information Forum participates in other BCP initiatives including maintaining an emergency command center for the market data industry and representing market data and service bureaus on the Financial Services Sector Coordinating Council (FSSCC). More information on FIF’s BCP activities can be found at www.fif.com.