Business Continuity Plan

A continuity plan connects an internal response to an external customer obligation. The firm prepares for disruption, keeps the plan current, and tells customers how it will respond when disruptions vary in scope.

The Written Plan

• Business Continuity Plan (BCP): A written plan addressing an emergency or significant business disruption that is reasonably designed to enable the member to meet its obligations to customers.
• The firm creates and maintains the BCP.
• The firm updates the BCP when a material change occurs.
• The firm conducts an annual review to determine whether modifications are necessary.

Continuity cycle: disruption risk or material change -> plan is maintained or updated -> annual review evaluates needed modifications -> the firm remains prepared to meet customer obligations.

Think of it this way: A BCP is a working playbook, not a document stored away after it is written. A material change can alter what the firm needs to do during a disruption, so the plan has to change with the business.

Exam Tip: Gotchas

• A BCP is designed to help the firm meet its obligations to customers during an emergency or significant disruption.
• The annual review asks whether modifications are necessary. It does not eliminate the separate duty to update the plan when a material change occurs.

Customer Disclosure

• BCP disclosure to customers: The firm explains how its BCP addresses a future significant business disruption and how it plans to respond to events of varying scope.
• The disclosure is provided in writing at account opening.
• A firm with a website posts the disclosure on its website.
• The disclosure is mailed to customers on request.

Exam Tip: Gotchas

• A BCP is not only an internal contingency plan. The firm also discloses to customers how the plan addresses a significant business disruption.
• Website posting does not replace the written account-opening disclosure, and a customer may request the disclosure by mail.