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Prepared by:
Thomas
Boran and Donald A. Madura
October,
2001 |
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| For us in
the market data industry, the unforeseen nature and the magnitude of
the events of September 11, 2001 terrorist attack on the World Trade
Center community continues to impact us deeply.
As other types of
occurrences may happen again that could have an impact on the global
financial community, it is
critical to review,
assess and re-evaluate all approaches to disaster recovery and to
fully understand all possibilities, natural or man-made. A global
approach will be essential in order to be prepared to deal with the
consequences in each and every one of your money centers. |
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Some
interesting disaster recovery observations
emerged from those firms directly impacted
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- Firms’ disaster
recovery site (DRS) plans are tailored only to cover sections of
their trading floor. In the past, DRS plans have been made on a
sector and department basis (i.e., Equity only, Fixed Income
only, Asset Management only, etc.), and were not capable to
fully support the entire trading floor. As a result, DRS’s
were not fully prepared to facilitate the hundreds of end-users
that were dislocated.
- Market data in
DRS’s were configured with sources that were outdated and do
not represent current usage patterns that exist on the trading
floor.
- Lack of
information among the users about alternative sources at a page
/ instrument level, which could lead to uncertainty when trading
resumes.
- Vendor backup
plans were disrupted since many of the feeds coming from market
data providers were managed by one telecommunication company, up
to and at trading floor entry points. Infrastructure delivery
configuration of market data services in DRS needs to be
reviewed.
Several firms
resorted to Y2K recovery plans, which proved to be invaluable,
but outdated.
A comprehensive
Disaster Recovery Plan (DRP) is a critical element in ensuring
business continuity. A DRP frequently includes (but is not limited
to) a business assessment of the impact of systems disruption in
each functional area of your firm, a priority scheme for recovery,
and detailed instructions on the recovery process replete with
allocated resources and designated staff. Disaster Recovery Planning
must be approached as an ongoing process, with scheduled updates to
incorporate changes that the organization has undergone.
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| Listed
below are some steps that will lead to a more effective DRS: |
- A
comprehensive Disaster Recovery Plan (DRP) –Consider the range
of events, understand your requirements (by business and in
detail) and assign overall risks, in a similar fashion to the
management of a portfolio. Conduct
an audit of your current configuration and identify areas of
weakness. Develop a
base level plan covering every step to be taken within your
entire organization. It should emphasize your entire floor’s
inter - and intra – day requirements, with execution and
market liquidity as priorities.
- Conduct
routine audits of your DRS as a normal course of business –
Develop a checklist and routinely revisit the DRS configuration
(i.e., monthly, quarterly, semi-annually, etc.)
- Review
market data sources at a detailed level – Perform DRS
workshops with desk MDs and selected direct reports. This will
ensure that users are aware of services at the DRS and the
options that will be made available to them (at a page /
instrument level) in the event that specific services are not
available.
- Benchmarks
and Standard Configurations – Extend service profiles, cost and
usage benchmarks to include the DRS site.
- Review
all technical configuration aspects – This will ensure that
backups, redundancy and diverse routing issues are fully
addressed.
While
it is virtually impossible to prevent impact from a disaster of the
magnitude we just experienced, you certainly can minimize impacts by
following these straightforward steps.
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