Business Continuity Management Program
Deutsche Bank Business Continuity Program: U.S. Broker-Dealers
In 2004, the Securities and Exchange Commission approved NASD Rules 3510 and 3520 and NYSE Rule 446, which require member firms to create and maintain business continuity plans. NASD Rules 3510 and 3520 have since been superseded by FINRA Rule 4370. In accordance with these rules, a business continuity plan will enable the firm to continue its business in the event of a significant business disruption or, in the alternative, conduct an orderly wind-down of operations.
On this page, clients of Deutsche Bank’s U.S. broker-dealers (Deutsche Bank) will find information on Deutsche Bank’s commitment to these obligations and highlights of our Business Continuity Program.
Deutsche Bank Business Continuity Program
Effective business continuity measures are critical for any business entity. Deutsche Bank is committed to protecting its staff and ensuring the continuity of critical businesses and functions in order to protect the Deutsche Bank franchise, mitigate risk, safeguard revenues and sustain both a stable financial market and customer confidence. The development, implementation, testing and maintenance of an effective global Business Continuity and Disaster Recovery program are required to sustain these objectives.
To further our commitment in the event of a significant business disruption, as well as meet all regulatory requirements, Deutsche Bank’s infrastructure includes a Business Continuity Management (“BCM”) group that is an integral part of Deutsche Bank's normal business operations. BCM plans, tests, and manages crises concerning business lines and functions’ relocation and recovery.
Ten Critical Components
Our plans to ensure business continuity address the ten key areas FINRA and NYSE stated must be addressed:
- Data back-up and recovery (hard copy and electronic) – identification of the location of primary books and records (hard copy and electronic) and the location of back-up books and records (hard copy and electronic). In addition, firms must be prepared to describe how they back up data, as well as how they will recover data in the event of a significant business disruption.
- All mission critical systems – systems that are necessary, depending on the nature of a member's business, to ensure prompt and accurate processing of securities transactions, including, but not limited to, order taking, order entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts and the delivery of funds and securities.
- Financial and operational assessments – written procedures that allow a firm to identify changes in its operational, financial, and credit risk exposures. Operational risk focuses on the firm's ability to maintain communications with customers and to retrieve key activity records through its "mission critical systems." Financial risk relates to the firm's ability to continue to generate revenue and to retain or obtain adequate financing and sufficient equity. Firms may also face credit risk (e.g., where its investments may erode from the lack of liquidity in the broader market), which would also hinder the ability of the firm’s counter-parties to fulfill their obligations.
- Alternate communications between customers and firm – alternate means of communications that a firm will use to communicate with its customers in the event of a significant business disruption.
- Alternate communications between firm and its employees – alternate means of communications that a firm will use to communicate with its employees in the event of a significant business disruption.
- Alternate physical location of employees – alternate locations must be designated for employees, including key personnel that have been identified to assist in the resumption of business operations.
- Critical business constituents, banks, and counter-party impact – effect a significant business disruption will have on a firm’s relationship with its critical business constituents, banks, and counter-parties, and how it will deal with those impacts.
- Regulatory reporting – available means a firm can use to continue its compliance with regulatory reporting requirements.
- Communications with regulators – communication with regulators through whatever means are still available, including the designation of business continuity plan contacts with FINRA to assist in these communications.
- Providing customers prompt access to their funds and securities – measures a firm will use to make customer funds and securities available to customers in the event of a significant business disruption.
Our client commitment statement is available to clients in our Business Continuity Program Letter.