Practice Note 4.12 Business Continuity Requirements
Rule 4.12 requires Members to:(a) maintain adequate business continuity arrangements;(b) document business continuity arrangements in a business continuity plan;(c) test and review business continuity plans regularly; and(d) appoint emergency contact persons.
2. Business continuity plan
2.1 Critical elements of a business continuity plan
Rule 4.12.1 requires Members to maintain adequate business continuity arrangements, and document such arrangements in a business continuity plan. As a guide, a Member's business continuity plan should document the following elements:(a) Risk assessment. This includes a comprehensive assessment of business continuity risks (including financial and operational risks) and threat scenarios which may severely disrupt a Member's operations. Such scenarios may include prolonged power outages, IT system software or hardware failures, loss of voice or data communication links, acts of terrorism, and outbreak of infectious diseases.(b) Business impact analysis. This is an evaluation of the impact of the risks and threat scenarios identified in (a) above. The business impact analysis should identify critical business functions (including support operations and related information technology systems) and potential losses (monetary and non-monetary) to enable the Member to determine recovery strategies/priorities and recovery time objectives.(c) Work area recovery. This refers to continuity arrangements for a Member's critical functional capabilities in the event that the Member's primary office becomes inaccessible, for example, availability of a disaster recovery site ready for activation within a reasonable period of time.(d) Crisis communications. This refers to a communications plan for the Member to liaise with its internal and external stakeholders such as employees, customers and regulatory authorities during a crisis.(e) Roles and responsibilities. This refers to the identification of a Member's key personnel and management staff, their roles and responsibilities, and reporting lines. Alternates should be identified to cover the responsibilities of absent key personnel.(f) Backup for critical functions, information technology systems and data. Critical functions refer to business functions whose failure or disruption may incapacitate the firm.(g) Key service providers. This refers to assessing a Member's dependencies on key service providers in recovery strategies and recovery time objectives, and taking steps to ensure that key service providers are capable of supporting the Member's business, even in disruptions. Key service providers refer to third-parties who are performing functions that are not normally carried out by Member firms internally, but are critical to Member firms' ability to carry on business operations, for example, IT system hardware/software vendors.(h) Outsourcing service providers. This refers to assessing whether the service provider has established satisfactory Business Continuity Plans commensurate with the nature, scope and complexity of the outsourced services. Outsourcing service providers refer to third parties who are performing functions that would normally be performed by Members firms internally, for example, Operations and Technology.(i) Any other elements that the Member deems necessary to be included in its business continuity plan or which SGX-ST may prescribe from time to time.
2.2 Emergency response during crisis
A Member should establish and maintain a crisis management plan as part of its business continuity plan. The crisis management plan should include (but not be limited to):(a) Emergency response procedures;(b) Roles and responsibilities of the crisis management team;(c) Command and control structures; and(d) Salvage and restoration procedures.
SGX-ST may declare a wide-area crisis in the event of a major and widespread incident. When such declaration is made, SGX-ST may require a Member to submit status reports to SGX-ST. A wide-area crisis may include any incident where the operations of a large number of market participants are disrupted simultaneously.
2.3 Regular review, testing and training
Rule 4.12.1 also requires a Member to review and test its business continuity plan regularly. Members should do so at least once a year to ensure that their business continuity plans remain relevant.
Where there are material changes to a Member's business activities and operations, the Member should update its business continuity plan accordingly. Regular training should be conducted for staff to be updated and aware of any relevant changes to the Member's business continuity arrangements. As a principle, training should be conducted when:(a) changes have been made to the Member firm's BCP; and(b) new staff are recruited.
Member firms should also conduct refresher courses for existing staff where appropriate.
2.4 Application to a Remote Trading Member
The features of a business continuity plan set out in paragraphs 2.1, 2.2 and 2.3 may not be applicable to a Remote Trading Member. A Remote Trading Member should meet any applicable business continuity plan requirements that are prescribed by its Relevant Regulatory Authority. The Trading Member may further adopt the recommended features of a business continuity plan set out in this Practice Note 4.12.
3. Emergency contact persons
Rule 4.12.3 requires a Trading Member to appoint emergency contact persons and furnish the contact information of such persons to SGX-ST. Members may appoint an emergency contact person and up to two alternates. A template is attached as Appendix A to this Practice Note for the notification of contact information (postal address, email, telephone, mobile telephone and facsimile numbers) to SGX-ST.
Refer to Appendix A of Practice Note 4.12.
Members are to ensure that the contact information provided to SGX-ST is updated on a semi-annual basis. Nonetheless, where there are changes to a Member's emergency contact persons and contact information, the Member should notify SGX-ST immediately in writing.
A Member's authorised emergency contact person should immediately notify SGX-ST in the event where:(a) A Member's business operations are or will be significantly disrupted; and/or(b) A Member's business continuity plan is activated.
Appendix A to Practice Note 4.12 Business Continuity Management Emergency Contact Person(s)
Business Continuity Management Emergency Contact Person(s)
Company Name: ____________________________
Name Department Designation Office No. Mobile No. E-mail Address