OmniVista · Management consultancy · January 2026

Supporting financial institutions to fit client needs

The core obligation

An adviser must create and maintain a business continuity plan that is “reasonably designed” to meet client obligations — in the event of any disruption.

⚖Private Fund Investment Advisers Registration Act 2010

📋SEC Rule 206(4)-7 · Investment Advisers Act 1940

📜Dodd-Frank legislation

Author

Mike Aghbabian

Read time

4 minute read

Published

25 Jan 2026

The SEC’s position is clear: protect client assets, no matter what disrupts your ability to do so.

The Private Fund Investment Advisers Registration Act requires managers above certain AUM thresholds to register with the SEC and implement a compliance program — and at the heart of that program sits a Business Continuity Plan. The BCP must not just exist. It must be functional, tested, and current. Globally, standards from BS 25999 to FINRA Rule 4370 provide the framework. Internationally active firms must assess which standard fits their client base, markets, and risk management philosophy — and design their BCP accordingly.

⚖

Regulatory requirements — with SEC guidance still evolving and FINRA as the probable model

🛡

Risk management covering vendor exposures and counter-party relationships

🏛

Executive ownership — commitment and sponsorship of the program at the highest level

🧬

Cultural integration — BCP as a core part of how the firm operates, not a compliance exercise

💰

Adequate funding and staffing to make the plan operational, not just documented

What business activities are in scope — and where are the boundaries of the plan?

Do you know your exposures across systems, vendors, and counterparties?

Who are your clients and what level of continuity do they expect from you?

What is your reliance on critical vendors — and what happens if they fail?

What functions are critical? Which become critical only after time passes?

What are the minimum resources required to maintain operations for a selected period?

What is your proximity risk — both internal and external to the firm?

What is your reliance on critical clearing and settlement infrastructure?

Investment adviser

Specifically understood, in the legal sense, as responsible for compliance to the Investment Adviser Act — as well as to the investment clients they represent.

Mission critical system

Any system necessary to ensure prompt and accurate processing of securities transactions — including order taking, execution, comparison, allocation, clearance, settlement, and customer account access.

Financial & operational assessment

A set of written procedures that allow a member to identify changes in its operational, financial, and credit risk exposures.

Investment Advisers Act 1940

As it relates to the Private Fund Investment Advisers Registration Act 2010: requires registration of anyone providing investment advice — and promulgates disclosure rules protecting investors’ interests in every transaction.

01

Executive commitment

Obtain strategic insight and genuine sponsorship at the highest level before any implementation begins.

02

Strategy decision

Determine whether application resiliency or business impact analysis drives the technology and implementation mix.

03

Secure resources

Lock in legal counsel, compliance assessment capacity, and IT project management before execution begins.

04

Operationalise & test

Build, document, test annually — and update on every material change to operations, structure, or location.

Portfolio management & trading

Clearly defined backup processes

Codified procedures reduce business risk and ensure trading operations can continue through disruption — without improvisation.

PM

Risk & compliance

A living regulatory mechanism

A recovery platform that mitigates key risks and provides an up-to-date risk and regulatory reference for every inquiry.

RC

Client services

Transparency clients can trust

Up-to-date risk management and client reporting transparency — the foundation for new business requests and client confidence.

CS

Operations & IT

Reduced operational risk

Codified backup processes and clearly mapped dependencies — so operations teams know exactly what to do, and when.

OT

1

Mallon, Bart. Business Continuity Plans (Disaster Recovery Plans) | Investment Adviser Registration. Retrieved October 18, 2010, from hedgefundlawblog.com

2

Amended by SR-FINRA-2009-036, effective December 14, 2009.

3

SIMFA (2008) The Business Continuity Program – Expanded Practices Guidelines. New York: Business Continuity Planning Committee.

4

Securities and Exchange Commission, Division of Investment Management (www.sec.gov). SME, legal & industry interpretations appended.

5

“Protecting Investors: A Half Century of Investment Company Regulation.” United States Securities and Exchange Commission, Division of Investment Management, May 1992.