Although Hurricane Irene may have wreaked havoc on millions of households across the East Coast, the storm had little impact on core post-trade clearing and settlement activities.

Market infrastructures and large service providers braced for the worst and from all accounts it appears that the only major impact was a lower headcount at some offices. Some employees opted to stay at homes damaged by the hurricane or could not reach their offices due to either mass transit outages or mandatory evacuations in their areas.

Despite difficulties, "our people have done an excellent job continuing operations,” said Kurt Woetzel, head of global operations and technology and chief administrative officer at BNY Mellon, the investment services firm.   

Depository Trust & Clearing Corp. the umbrella organization for clearing and settling U.S. securities transactions, said it maintained “normal” operations on Monday with deadlines for clearing fund, settlement and other processes unchanged.

On late Friday DTCC whose headquarters are housed at 55 Water Street in lower Manhattan, was on alert to implement its disaster recovery plans, but did not have any need to do so. he market utility’s operations in Tampa, which has 500 employees, were also unaffected by Hurricane Irene. .

The key exception: certificate processing services. DTCC anticipated that couriers delivering certificates and operations executives processing them would not be able to access DTCC’s office in lower Manhattan. Officials could not quantify what percentage of securities transactions – or which ones – are processed using paper-based certificates. However, DTCC  emphasized that investors were not affected.

“Given the disruption to New York City’s public transportation and the fact that lower Manhattan is still recovering from the hurricane, all certificate-based services – deposits, withdrawals, envelope and New York Window services – will be suspended on Monday,” DTCC said, in a statement. “These services will be deferred until Tuesday, August 30, at which time these processes will resume as normal.”

BNY Mellon and JPMorgan Chase did implement their business contingency plans but declined to provide any specifics. The banks are well known as among the world’s largest custodians and U.S. agents for triparty repurchase agreements.

“Treasury and Securities Services initiated business resiliency protocols over the weekend and are operating business as usual today,” said a JP Morgan spokeswoman, in a statement issued to Securities Technology Monitor on Monday.

A statement provided by BNY Mellon lacked details, but was similarly reassuring. “By implementing its global business continuity plans determined well in advance, the company is continuing to conduct business for clients despite flooding, transit shutdowns and power outages in the affected region,” said the statement.

BNY Mellon said that there was no ‘serious” damage to BNY Mellon’s facilities and virtually all offices – including lower Manhattan locations – were open on Monday. BNY Mellon has operations centers in lower Manhattan as well as in Jersey City. The New Jersey facility houses its securities transfer business and clearing unit Pershing. Officials at Pershing declined to comment beyond Woetzel's statement.

“We had good advance planning that allowed us to move many operations to other sites in the U.S. or overseas,'' said Woetzel, who is responsible for BNY's business continuity planning."Our businesses did very good work in invoking their contingency plans to ensure the safety of their employees and that we continue to deliver the quality of service our clients have come to experience from our company."

Omgeo, the post-trade communications service provider which allows buy and sell side firms to acknowledge trade details before settlement, says that it didn't have to invoke its business continuity plans. However, it was prepared to do so.

"Omgeo has dual in-region production facilities and an out-of-region alternative production facility more than 1,200 miles from the dual primary data centers," said Steve Matthews, chief operating officer for Omgeo. "We had several calls oer the weekend with key staff at Omgeo and with parent companies Thomson Reuters and DTCC in order to discuss the status of the storm, its impact on Omgeo staffing levels and to ensure resources were available to continue business operations."

Broadridge Financial started preparing for Hurricane Irene several days ahead of time but none of its locations were impacted by the hurricane, said Mark Schlesinger, chief information officer for the firm, best known for its middle and back office services for broker-dealers. Broadridge has 11 facilities in the east coast located bertween Maryland and Massachussetts, where the hurricane struck the hardest.

"Broadridge has the infrastructure required to be resilient  during a major disaster event," emphasized Schlesinger. "We have well-funded, defined and internally and externally tested disaster recovery and business continuity programs to enable system and technology recovery, as well as staff and facility recovery."

The good news for most financial operations located on the East Coast was that Hurricane Irene ended up being a Category 2 storm when it reached New York. That is below the threshold of an actual hurricane but still churned up some dangerous winds.

DTCC and BNY Mellon’s headquarters are located in Zone A in lower Manhattan where Mayor Bloomberg imposed mandatory evacuations. Omgeo has an office in Boston and its office in New York is housed in the same building as DTCC at 55 Water Street.

The 9/11 terrorist attack served to elevated the intertwined procedures of business continuity and disaster recovery to  C-level status. They can ill afford to be off-line for hours, let along days or weeks so financial firms -- particularly those with large securities processing units -- have permanent disaster-recovery teams in house, creating in process the profession of business continuity management.

At their most sophisticated level, disaster recovery plans involve a near-replica of a company's office, with desk space for the most crucial employees permanently ready for use at a few hours' notice. Large custodian banks and other securities processing infrastructures have all created synchronous data centers so the failure of one main server will not result in the loss of any data. They also maintain staff and technology in multiple separate locations reflecting best practice and regulatory guidelines.


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