January 25, 2022

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January 24, 2022

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FINRA Updates Criteria Regarding Business Continuity and Disaster Recovery Testing

On March 7, the Financial Industry Regulatory Authority published Regulatory Notice 18-09, which expands the criteria FINRA will use to designate member firms that must participate in business continuity and disaster recovery testing (BC/DR testing). Regulation SCI requires FINRA to designate firms that must participate in BC/DR testing.  Regulatory Notice 18-09 indicates that the following firms must engage in BC/DR testing: firms that account for at least 5 percent or more of the average dollar volume of Treasury securities reported to the Trade Reporting and Compliance Engine (TRACE) over the six-month period preceding the designation (provided that the cumulative dollar volume represented by all such firms amounts to at least 50 percent of all dollar volume in Treasury securities reported to TRACE during the applicable six-month period).  The Regulatory Notice indicates that FINRA expects to make designations in April and that testing will occur in October.

Regulatory Notice 18-09 is available here.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 68
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About this Author

Our Financial Services Practice advises a broad spectrum of domestic and international fund managers, trading advisors, banks, brokerages and proprietary trading firms in all aspects of exchange-traded and over-the-counter commodities, securities and derivatives transactions. We help clients find business-based solutions and make business-driven decisions that are in compliance with applicable regulatory requirements. Our lawyers have extensive experience in the financial markets and are fully attuned to the need to provide advice quickly and efficiently in light of the time-sensitive and...

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