NASAA Series 65, Uniform Investment Adviser Law ExaminationLaws, Regulations, and Guidelines, including Prohibition on Unethical Business PracticesMedium
A state-registered investment adviser (IA) has established a new business continuity plan. Which of the following is NOT typically a required component of a comprehensive business continuity plan under state regulations?
- APlans for ensuring employees can access critical systems and continue operations.
- BProcedures for communicating with clients and regulators during a significant business disruption.
- CStrategies for protecting, backing up, and recovering client records.
- DA detailed list of alternative physical office locations with signed lease agreements.
Show answer & explanationAnswer & explanation
Correct answer: D. A detailed list of alternative physical office locations with signed lease agreements.
While having alternative work arrangements is important, a detailed list of alternative physical office locations with signed lease agreements is generally not a specifically mandated component of a business continuity plan. Plans typically focus on function and access, not specific real estate contracts.
Why the other options are wrong
- A. Ensuring employee access to systems for continued operations is a core aspect of business continuity.
- B. Communication with clients and regulators is essential during disruptions and is a standard requirement.
- C. Protecting client records is a critical component of any business continuity plan.
IA Business Continuity Plan (BCP)
An IA's BCP is a written plan outlining procedures to ensure continuous operations and client service during significant business disruptions. It's a regulatory requirement for both state and SEC-registered IAs.
- Mandated by regulatory bodies.
- Must address data backup, client communication, and operational continuity.
- Must be reviewed periodically and updated as needed.
Memory trick: BCP: Keep Clients Connected, Data Protected, and Operations Uninterrupted!