SEC seeks transition plan requirements for investment advisers

A proposed SEC rule would require registered investment advisers to adopt and implement written business continuity and transition plans.

For CPAs, the rule would affect only those who are registered as investment advisers with the SEC.

The rule seeks to ensure that investment advisers have plans in place to address operational and other risks related to a significant disruption in the adviser’s operations, with the goal of minimizing client and investor harm, the commission said in a press release.

Business disruptions can be temporary or permanent, and are caused by events including cyberattacks, natural disasters, technology failures, and the departure of key personnel, the SEC said.

Plans developed under the rule would have to address risks related to the following: maintenance of systems and protection of data; prearranged alternative physical locations; communication plans; review of third-party service providers; and a plan of transition in the event the adviser is winding down or is unable to continue providing advisory services.

The proposed rule is available on the SEC website and in the Federal Register. The comment period closes Sept. 6.

The SEC accepts comments online and by email to rule-comments@sec.gov.