--- title: Rare East Coast Earthquake Serves as a Reminder to Review Business Continuity Plans description: Rare East Coast Earthquake Serves as a Reminder to Review Business Continuity Plans --- [![Jacko Law Group, PC - Securities Law](https://resources.jackolg.com/hubfs/Jackolawgroup%20February2018/image/brand.png)](http://www.jackolg.com/) Call Today for a Consultation San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549 Menu [Contact](http://www.jackolg.com/Contact.shtml) - [Home](http://www.jackolg.com/) - [Firm Overview](http://www.jackolg.com/Firm-Overview/) - [Professionals](http://www.jackolg.com/Professionals/) - [Events](http://www.jackolg.com/Events.shtml) - [News](http://www.jackolg.com/News-Room/) - [Blog](http://www.jackolg.com/blog/) - [Videos](http://www.jackolg.com/Videos.shtml) - [Contact](http://www.jackolg.com/Contact.shtml) # Understand. Define. Achieve. 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View Our Practice Areas - [SEC/FINRA Regulatory Counsel](http://www.jackolg.com/Regulatory-Examinations-and-Inquiries-SEC-and-FINRA/) - [Private Equity & Hedge Fund Counsel](http://www.jackolg.com/Private-Equity-Counsel/) - [Investment Adviser Services](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/Investment-Adviser-Counsel.shtml) - [Breakaways And Transitions](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/) - [General Corporate Counsel](http://www.jackolg.com/Corporate-Counsel/) - [Broker- Dealer Counsel](http://www.jackolg.com/Broker-Dealer-Counsel/) #### News - [Legal Tips](http://www.jackolg.com/News-Room/) - [Publications](http://www.jackolg.com/News-Room/Publications.shtml) - [Blog](http://www.jackolg.com/blog/) # Jacko Law Group Blog # Rare East Coast Earthquake Serves as a Reminder to Review Business Continuity Plans The 5.8 magnitude earthquake that shook large portions of the eastern seaboard on August 23rd should serve as a useful reminder to registered investment advisers and broker-dealers to review and update their business continuity plans. While not explicitly stated in Rule 206(4)-7 of the Investment Advisers Act of 1940, SEC registered investment advisers are nevertheless required to maintain business continuity and succession plans. This is true because Rule 206(4)-7’s adopting release stated that the SEC believes “an adviser's fiduciary obligation to its clients includes the obligation to take steps to protect the clients' interests from being placed at risk as a result of the adviser's inability to provide advisory services after, for example, a natural disaster or, in the case of some smaller firms, the death of the owner or key personnel.” Moreover, the SEC has explicitly stated that, at a minimum, it expects an adviser’s policies and procedures manual to contain a business continuity plan. FINRA Rule 4370, places a similar requirement for its member firms to implement a written business continuity plan. To that end, registered investment advisers and broker-dealers should implement a written business continuity plan which addresses (at a minimum) the following areas: - Data back-up and recovery (both hard copy and electronic); - Mission critical systems; - Financial and operational assessments; - Alternate communications between customers and the member; - Alternate communications between the member and its employer; - Alternate physical location of the employees; - Critical business constituent, bank and counter-party impact; - Regulatory reporting; - Communications with regulators; and - Assuring customers will have prompt access to their funds/securities in the event the member is unable to continue business. 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