The National Association of Securities Dealers’ board of governors has approved for comment a proposed rule that would require brokerage firms both to create and maintain a business continuity plan, and to supply the NASD with emergency contact information.

Following September 11, the NASD undertook an in-depth examination of the industry’s recovery capability from significant business disruptions. It also looked at the need for assuring that all firms in the industry have a business continuity plan, without imposing a one-size-fits-all requirement for member firms.

To understand the ability of its members to respond to significant business disruptions, the NASD surveyed 150 randomly selected firms plus an additional 120 of the largest NASD member firms. The survey found that while the largest firms were the best prepared, a majority of all firms back up their electronic data regularly and had plans that covered failures in hardware, software, power, and telecommunications.

Based on the survey and discussions with the U.S. Securities and Exchange Commission and General Accounting Office, the rule proposal will require a business continuity plan that meets minimum standards on data back-up and recovery, mission critical systems, financial and operational assessments, among other things.

The rule would also require each member to maintain current key emergency contact information with the NASD, for: communication with investors, the location of books and records, clearance and settlement information, and contact information for critical staff.

“It is critical for all brokerage firms to have contingency plans to manage significant business disruptions. Having a clear, well-organized crisis protocol will allow our NASD members to resume business as quickly and efficiently, as possible,” said Mary Schapiro, president of NASD Regulation Inc.