“Before anything else, preparation is the key to success.”
Alexander Graham Bell
Now is an opportune time to review, update, and test your business continuity plan (“BCP”). Here are three good reasons to do so …
- Regulatory: Recently, the SEC Division of Investment Management recommended that investment advisers and funds plan and prepare for potential sustained business disruptions due to the evolving risk presented by the coronavirus (“COVID-19”) outbreak. Specifically, the Commission stated: “The Division encourages investment advisers and funds to contact the Division staff with any concerns they have related to the staff letter or to current or potential effects of COVID-19 on their operations, including any need for relief or guidance.” The SEC goes on to encourage registrants to evaluate their business continuity plans and valuation procedures, among other relevant policies, procedures, and systems. This guidance is consistent with the Commission’s ongoing directive to advisers to develop “risk-based” policy. The COVID-19 risk set presents unusual challenges to adviser BCP execution; a risk-based response would therefore entail testing and follow-on amendment and possible implementation.