Podcast: COVID-19 and Operational Resiliency

The novel coronavirus (COVID-19) is front and center across the world. In this podcast, Ken Bentsen, SIFMA President and CEO, and Tom Price, SIFMA Managing Director, Technology, Operations and Business Continuity, discuss industry-wide BCP efforts to protect personnel and maintain operational resiliency during the COVID-19 pandemic.

SIFMA’s Business Continuity Planning (BCP) team continues to closely monitor the novel coronavirus (COVID-19) and its impact on our industry and the markets; guidance and resources for the industry are available at www.sifma.org/bcp.


Edited for clarity

Ken Bentsen: Welcome to a special episode of The SIFMA Podcast. I’m Ken Bentsen, SIFMA president and CEO. Today we wanted to talk about the industry’s efforts in business continuity planning in relation to the novel coronavirus (COVID-19).

With me I have Tom Price who is managing director and in charge of SIFMA’s operations technology, BCP and cyber resiliency. Tom thank you for joining us today.

Tom Price: Thank you.

Ken: So, obviously COVID-19 is front and center in the United States but this is something that has been going on since the beginning of the year or late last year when it first emerged in China. Maybe, Tom, you can give just a quick overview of number one SIFMA’s BCP operations with the industry and on behalf of the industry and when the BCP group started monitoring with what has now become COVID-19.

Tom: Thanks, Ken. SIFMA’s BCP activities play a critical role getting information out to the industry as it relates to these types of stress environments. As COVID-19 started to manifest itself in Asia at the early part of this year, the industry pulled together both private and public sector watching the COVID-19 virus across the horizon, understanding how it was impacting financial services certainly in China, focus on Hong Kong and Singapore and understanding how the industry was responding to staff, markets, and infrastructure as it relates to the impact of this on the marketplace and our industry. One of the things that SIFMA has done back in 2007-2008, working with others in the public sector, was to do a pandemic exercise and we had an after-action report that is similar to the exercise to what we’re experiencing today. So we’re able to use that as a resource to understand how, as common practice, firms should be implementing, certain practices that help protect their staff. Some of that included social distancing, some of that included working and analyzing how do you do split shifts, how to you work remote from remote locations, how do you work from home, all of those things were important information that we’re able to share with our participants.

In addition, we wanted to understand the impact to FMUs and FMIs as well as exchanges and what impact the volatility would have on those critical providers in the marketplace.

Ken: The reference to the earlier 2007 pandemic exercise is important. Again, before we dig into a little more detail as to what’s going on what right now I think it is important for our listeners to put this in context that this BCP planning that SIFMA does with the industry and the public sector along with other financial trades is something that goes back to really post 9/11, where the government and others wanted the industry to be in a ready-state to deal with any type of event. As time has gone on, obviously the pandemic exercise was an outgrowth of the SARS situation that you had the financial crisis, you’ve had physical events like Superstorm Sandy. Through these actual events and interim planning, this is a regular function that the industry through its trades like SIFMA conducts with the public sector.

Tom: That’s right, Ken. The whole concept here is operational resiliency and how do we protect folks, personnel while keeping the markets operating efficiently. So, a lot of this activity around the BCP that we are engaged in has to do with how do we share information, how do we communicate to the industry at large, how do we escalate as incidents could potentially impact how markets and our personnel, how do we escalate in a way that helps decision-makers understand the impact both in the industry and as well as with policymakers. And then, key to all of this, we work in a very regulatory environment, so how do we make sure that we’re continuing to talk to policymakers and the regulatory community as to what the impacts are to financial services and our industry.

Ken: Let’s maybe fast forward from January to March. I know back in January, calls were occurring pretty much on a weekly basis across various sectors, and with the public sector. What’s the cadence that you’re experiencing now int eh BCP side? I can talk a little about the cadence in the leadership side. Is this an everyday event?

Tom: In January and February we were meeting three times a week, every other day, which included other trades, regulators, policymakers, and industry participants. Where we are today, certainly as the situation certainly escalated in Europe and then more here in the U.S., we’re meeting multiple times a day with key industry participants as it relates to the functioning of the markets, making sure that firms that are meeting certain requirements as it relates to the CCPs, making sure that trading is operating efficiently and that we’re making sure that the industry gets the information as it relates to regulatory relief that the regulators have provided us. What we have done is set up a single location on SIFMA’s sifma.org webpage that consolidates information from health organizations like WHO, the CDC, regulatory information at the Federal level, information from state regulators, and other sources of information that we think is important for the members to have.

Ken: That’s very important. That’s real-time information that we’re putting up and again that’s at sifma.org.

The other thing I would add to what Tom is saying as well is obviously at the top of the house at SIFMA with our board we are in daily communications and then across our broader membership in terms of where there may be stresses in the markets, where there may be issues that are arising, Tom talked about different regulatory issues as firms go to split shifts, work from home… how do they maintain compliance with the multiple rules that we are subject to whether it’s from the Securities and Exchange Commission, the CFTC, FINRA, the prudential regulators and the states. And, likewise, in addition to liaising with our regulators on how do we work around issues to make sure we remain in compliance, we are also trying to provide real-time market commentary to the regulators so they have a window yet another window into the marketplace where they can understand where there might be pressure or stresses that might be going on in order to maintain regular market operations – which we have.

What else would you add, Tom, as you’re going through the process right now?

Tom: Well, I think certainly the most important thing is we’re all in this together and participants working with exchanges, working with utilities, working with the regulators, it is critical that we share information, that we keep it fresh on our website, and that we make sure that that we’re protecting our people while at the same time making sure that we have fair and orderly markets.

Ken: So again, I want to point out that if you go to sifma.org, you will see our COVID-19 webpage. We’re putting up information on there as fast as we can. We encourage you to reach out to Tom or myself if you have questions on industry operations, BCP planning, this is our group is stretched broadly across the industry and SIFMA’s membership and we are trying to be responsive in a real-time basis 24/7.

We thank you for listening in on this podcast. Again, we encourage you to go to sifma.org and we encourage you to reach out to us with any of your questions. Tom, thank you for joining us.

Tom: Thanks, Ken.

Kenneth E. Bentsen, Jr. is president and CEO of SIFMA, the voice of the nation’s securities industry. Thomas F. Price is Managing Director, Technology, Operations and Business Continuity at SIFMA.