This is a paid advertisement for SmartBrief readers.
The content does not necessarily reflect the view of SmartBrief or its Association partners.
Special Update on COVID-19: Part 1, Business Continuity Planning
(Spencer Platt/Getty Images)
The coronavirus pandemic requires a global response, across borders and industries. The US financial markets, part of America's critical infrastructure, continue to function as intended despite recent volatility and interruptions to normal business. Through SIFMA, the industry has a robust infrastructure for dealing with pandemics and other incidents. In Part 1 of this Special Update on COVID-19, we examine industry efforts to protect personnel and maintain operational resiliency.
Part 2 of this Special Update -- with a stimulus package explainer and more -- will arrive in your inbox next week. For up-to-the-minute resources and guidance, including instructions for essential critical infrastructure workers, visit www.sifma.org/bcp.
With the novel coronavirus (COVID-19) front and center across the world, SmartBrief caught up with Kenneth E. Bentsen, Jr., SIFMA president and CEO, to discuss how the industry is protecting personnel and maintaining operational resiliency during the COVID-19 pandemic.
The financial-services industry wants permission from regulators to suspend back-office tasks, many dating to the time of paper stock certificates, that cannot be completed when critical infrastructure workers are urged to stay home. SIFMA has detailed operational requests in a letter to the Securities and Exchange Commission, drawing on a 2007 pandemic-response exercise. "All you have to do is change it to 2020, and it's the discussion we are having today," says Thomas Price, managing director of technology, operations and business continuity at SIFMA.
SIFMA and other industry groups are urging the Financial Stability Oversight Council to keep US markets open during the coronavirus disruption as it "is essential to the well-being of the general economy and vital to maintaining and bolstering investor confidence." The groups noted that even "rumors about closing the markets are themselves causing adverse effects."
Major banks are dealing with logistical challenges of having employees work from home or at backup sites amid the coronavirus outbreak. SIFMA has been working with the industry for about two months on preparedness for disruption and has been testing the industry's resilience to shocks for years, and the association is confident firms can maintain smooth operations, say President and CEO Kenneth E. Bentsen, Jr. and Tom Price, managing director of technology, operations and business continuity.
The Financial Industry Regulatory Authority will temporarily waive certain rules to let traders work from home, and firms might need to implement alternative supervision to accommodate. SIFMA has been working with FINRA and other regulators to develop best practices for firms having to rely on remote staff, SIFMA President and CEO Kenneth E. Bentsen, Jr. says. "The goal is to keep markets operating in a fair and orderly fashion: That's the goal of the regulatory perspective and industry perspective and to do it in a way that meets the rule sets," Bentsen says.
Banks and brokerages are rolling out contingency plans and are seeking regulators' guidance on permissions they need to maintain trading should the coronavirus outbreak force employees to work remotely. SIFMA's business continuity planning team is closely monitoring the situation and is working with firms to identify challenges that need clarity from regulators.