Publication

"SEC Focuses on Business Continuity and Transition Plans: Implications for Registered Investment Advisers and Funds and Their Critical Service Providers"

The Securities and Exchange Commission recently proposed new Rule 206(4)-4 under the Investment Advisers Act of 1940, which would require registered investment advisers to adopt and implement business continuity and transition plans.  At the same time, the SEC’s Division of Investment Management issued a Guidance Update discussing certain elements of business continuity plans that registered funds should consider adopting under Rule 38a-1 under the Investment Company Act of 1940.
 
This Stroock Special Bulletin provides an overview of the Proposed Rule and the Guidance Update, both of which highlight the SEC's concerns about reliance on critical service providers and third party technology infrastructure.  The Bulletin also provides registered funds and advisers with some practical suggestions on how to address and manage business continuity planning through their contractual arrangements with third party service providers and other technology vendors.
 

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