Investment advisers registered with the Securities and Exchange Commission would have to adopt and implement written business continuity and transition plans under a rule proposed Tuesday by the agency.
The rules are aimed at minimizing client and investor harm in the event of temporary or permanent disruptions, such as technology failures, cyberattacks, personnel changes or natural disasters.
SEC Chairwoman Mary Jo White said in a statement that the proposal is “the latest action in the commission’s efforts to modernize and enhance regulatory safeguards for the asset management industry.”
Once published in the Federal Register, the proposal would allow 60 days for comments. Karen Barr, president and CEO of the Investment Adviser Association, declined to formally comment but said in a statement that it was encouraging that the proposed rule is principles-based and would allow each investment advisory firm to tailor plans to its own business model.