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Simulation Spotlights Necessity for Back Offices

NEW YORK CITY-A disaster-simulation scenario that many of the nation's largest broker-dealers took part in highlighted the need for increased communication between the companies as well as the continued necessity of having back offices managed by senior personnel.

By Barbara Jarvie | Updated on May 23, 2004

NEW YORK CITY-The terrorist attacks of Sept. 11, 2001 and the August 2003 blackout were two events here that underscored the need for companies to have disaster recovery plans. A number of major broker-dealers put their plans to the test during a simulation exercise where they responded to a scenario where the city is hit by two bombs-—one in Midtown and another in the financial district.

Working in company teams manned by technology, compliance and operations officers, the companies participated in a four-hour tabletop exercise. As the events of the scenario, escalated, the firms evaluated business continuity plans to check the level of preparedness.

Noting that this effort was just a start, Joseph Sack, executive vice president of Securities Industry Association tells GlobeSt.com that it highlighted both the need for increased communication within the industry and the necessity of having fully functional back offices. “The technology is such that many firms can instantly switch to back up,” he says, adding that the securities firms have invested heavily in preparedness initiatives.

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