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Matt Rothchild Comment On Regulatory Notice 20-42

Matt Rothchild

1) When I first joined my firm, I emphasized a BCP that answered the question, “What happens if we lose use of our primary office for an extended period of time?” With that in mind, I encouraged our office staff—particularly our IT function—to think in terms of carrying on a regular workday from an alternative location. IT spent several years gradually building up our remote working capability. When COVID came, our firm made a conscious decision to carry on as usual as long as possible and committed to closing the office only if a staff member was diagnosed with the infection. That day came on 10/28/20. We closed the office and allowed staff to return 1) with a negative test result or 2) after two weeks had passed and no symptoms developed. By this time, our capability was such that every member of staff could switch to working remotely. We got through that ordeal mostly smoothly and everyone had returned to the office by Thanksgiving. 2) No comment 3) Our BCP does not focus on any particular type of disaster, but rather is written to emphasize actions to be taken should a disaster occur, a modularity of response, as it were. This allows us flexibility of action since not all disasters warrant the same response. Instead, we can pick and choose our recovery actions to fit the disaster at hand. 4) Our BCP performed as intended and we feel no changes are necessary. 5) Planned BCP tests have occurred each year and take the form of executing the actions to be taken in a real emergency. We employed those actions during our office shutdown. 6) We are now more open to the idea of staff working remotely following this episode. Many of our reps already worked from home prior to COVID, so no major change is expected there. 7) Current definitions of a branch office had no bearing on our firm or our firm’s response and all existing rules dealing with branch office definitions were observed the same as usual. 8) As it relates to remote office audits, the greatest challenge we experienced was rep participation. Under normal circumstances, the rep is present and requests for materials to review are answered and dealt with in real time. When conducting an audit remotely, the rep produces the materials on their own time and unless strict deadlines are imposed, sometimes the wait time is days or even weeks on a production. 9) No comment 10) My format for remote audits follows very closely with what I do for in-person audits. But when I come to a point where I would otherwise review something that’s on-site, I write a document request in the same style regulators use and send it to the rep. The rep is instructed to scan/photograph/or otherwise produce a visual copy of the material and email it to me.