I was initially going to do a post about Mac versus Windows and the ease of establishing VPNs for this weeks post. It’s a topic that would have tied into the general theme that is kind of present in my previous post, but hurricane Sandy got me thinking about disaster recovery from a business aspect. After I read the article in the link below, I was especially interested in this topic. So, join me on my deviation, won’t you?
DTCC is a company I have worked closely with for years, and their location in lower Manhattan was directly in Sandy’s path. The wall to their vault where they store the stock certificates borders the East River, so their lower levels are underwater and they are still unable to go in and assess the damage. Here is the first sentence from the article, “trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from superstorm Sandy.” As of Friday, they have been able to reopen and now except physical security deposits at an alternate location in Brooklyn. This means that clients will be able to trade on the physical securities that has been deposited to their brokerage accounts, this is important because clearing firms can once again contact this business as normal. Unfortunately DTCC is still unable to process settlements, which means clearing firms are unable to settle trades based on the physical certificates already in DTCC’s custody. This was runs into regulatory and delivery issues, that at this point, I’m not sure how we will work around. I assume FINRA is going to grant exceptions and waive the extension fees that would normally apply, but something that will take a lot of planning and communication to all the broker/dealers.
My point to all this rambling is this. While DTCC’s disaster planning and recovery plan has obviously gone into effect, there has been a trickle-down effect that has created an immediate consequences on businesses here in the Midwest for very far from any kind of physical storm damage. There is no primary disaster plan for the company to put into place in this situation, but we still have to react and create new policies based on the East Coast conditions. There are workarounds to using DTCC as the primary certificate processing facility, but it is a lengthy and sometimes more expensive alternative. I guess the purpose to this writing is to bring up the fact that just because the company does not directly suffer any kind of disaster or damage, the planning team still needs to take outside factors into consideration. They need to plan for alternative ways to conduct business if one of our primary partnerships loses the ability to operate.
No comments:
Post a Comment