The Mutual Fund Dealers Association of Canada (MFDA) published a bulletin on March 9 to remind members about their obligation to have business continuity plans in place, in light of recent developments regarding the spread of the coronavirus, COVID-19.
Pointing to the guidance set out in MFDA Staff Notice MSN-0056, the MFDA bulletin encourages member businesses to establish and maintain appropriate business continuity arrangements to ensure they are adequately prepared to minimize business disruptions and continue service to clients or resume operations within an acceptable period of time in the event of a potential crisis situation.
The bulletin also points to MFDA rule 2.9 which states that every member shall establish and maintain adequate internal controls – the policies and procedures established and maintained by management to ensure the orderly and efficient conduct of the entity’s business.
“Recent heightened sensitivity to the possibility of business disruptions, whether due to an act of terrorism, an outbreak of a widespread disease or natural disaster, has increased the focus on business continuity planning as a significant component of investor protection and maintaining market stability,” reads the October 23, 2006 guidance document. “MFDA staff is of the view that members should establish and maintain appropriate business continuity arrangements to ensure that they are adequately prepared to minimize business disruptions in a variety of potential crisis situations and are able to continue service or resume operations within an acceptable period of time.”
The document goes on to say that member should develop plans that are appropriate for their size and business models. In addition to identifying necessary procedures to be undertaken during a significant business disruption, the MFDA recommends that members define triggers for invoking business continuity arrangements, identify critical operations and services to be maintained in a crisis situation, and identify staff who are responsible for managing operational disruptions. Business plans should also include procedures to be followed to maintain core business functions. They should identify back-up systems for the protection and recovery of data and client records, and include procedures to be followed when communicating information to all relevant parties. Perhaps most interestingly, the MFDA also says it is the member’s obligation to ensure that third party service providers also have such plans in place.
“As with all policies and procedures, business continuity arrangements should be in writing and should be reviewed and tested, on at least an annual basis,” they write. “All staff should be informed about the existence and details of the business continuity arrangements and should be able to access them promptly in an emergency.”
