SIE Exam Question 424: Answer and Explanation

Question: 424

Every FINRA member firm must have in place a Business Continuity Plan which addresses:

• A. How the firm will continue operations if and when the firm is sold
• B. How the firm will continue operations if and when the firm becomes subject to a SIPC proceedings.
• C. How customers of the firm will be able to access their accounts and assets during a disaster or pandemic which has made normal operations infeasible
• D. How the firm's hiring practices will comport with Department of Labor rulings in a proper and timely way.

Correct Answer: C

Explanation:

C: Hurricanes, tornadoes, earthquakes, floods, the electric grid going down, disasters which disrupt business operations for long periods of time….. FINRA requires every brokerage firm to have a plan in place so that investors can have access to their accounts as quickly as possible ----FINRA calls it a business continuity plan.