Business Continuity /Disaster Recovery Panel

STA Annual Conference 2006

2

A High Level Summary of the Lessons Learned

from Hurricane Wilma

by Franklin Templeton Investments

Wayne BehrensDirectorBusiness Continuity Planning

Prepared for theSecurities Transfer Assocation

Amelia Island Meeting on Oct 20, 2006

Franklin Templeton Investments

Who was Wilma

Impact of Wilma

What Went Right

Crisis Management Lessons

Business Continuity Lessons

Technology Lessons

Facility Lessons

Wilma Agenda

Franklin Templeton Investments

1. Parent: Franklin Resources Inc.

2. Approx 500 Billion in Assets Under Management

3. Major BrandsA. FranklinB. TempletonC. Mutual SeriesD. Fiduciary TrustE. Darby OverseasF. Bisset (Canada)

4. Employees: Approx 8,000 in 29 countries. In the Florida Area:A. St. Petersburg (1,200+)B. Ft. Lauderdale (466)C. Nassau (49)D. Miami (16)

Who the Heck was Wilma?

1. Hurricane Wilma is the lesser known cousin of Katrina. However, Wilma was the most intense hurricane ever recorded in the Atlantic basin. It devastated parts of the Yucatán Peninsula as well as southern Florida.

2. There were 62 deaths attributed to Wilma and damage is estimated at $12.2 billion in the U.S., making Wilma the sixth costliest storm in U.S history.

3. When Wilma reached Ft. Lauderdale, she was a category 2 hurricane with sustained winds of 110 mph to 130 MPH.

Impact of Wilma on Franklin

1. Wilma reached Ft. Lauderdale early Monday morning, October 24th. By Monday afternoon, we had received preliminary damage assessments indicating that hundreds of windows primarily on the north west section of the building were blown out.

2. We were unable to occupy the building from October 24 through November 18.

3. No loss of life and no injuries to employees. Some damage to a few employee’s homes. Many employee’s homes were without power for days or weeks.

4. 500 employees were impacted, with over 230 being relocated to other sites: Toronto, St. Petersburg, Miami, New York, Short Hills, San Mateo, and Rancho Cordova.   

What Went Right

1. In general, our Crisis Management, Business Continuity and Technology Disaster Recovery plans worked well.

2. Wilma caused virtually no disruption to our customers.

3. The Ft. Lauderdale Emergency Management Team took charge of the situation in Ft. Lauderdale.

4. All business units were able to follow their business continuity plans and recover their operations.

5. Technology operations were restored to include two critical applications.

Crisis Management Lessons

1. When the local Emergency Management Teams (EMT’s) are in the midst of the incident and working literally in the dark, they do not always have the ability to fully coordinate the recovery of business operations away from the site.

2. Each of the major roles in our crisis management teams need to have a specific checklist.

3. We need to put in place a pre-plan to track and deal immediately with the relocation of employees to other sites.

4. You cannot over communicate. Despite the fact that we tried very hard to be proactive on communicating to our employees, we still heard a number of complaints in this area.

Business Continuity Lessons

1. Over 40 laptops were left in the FTL office when the hurricane hit. There had been so many hurricane threats during the year that many employees did not feel that Wilma would really hit or cause this much damage if it did.

2. The standard for Business Continuity Plans needs to be expanded to address a month long outage:A. Shifting work to alternate sites for

the first 3-5 days without moving employees

B. Plan for an incident to last over a month to include a month end

3. A number of issues arose in regards to employees:A. Pay during the outage B. Childcare and school closuresC. Bonus for extraordinary effortsD. Relocation of children & elders

Technology Lessons Learned

1. We were surprised by the number of business units that still relied upon hard copies of faxed documents to stand alone fax machine. We have worked on a better process and documentation of FAX rerouting requirements.

2. Better written procedures for forwarding 800 numbers.

3. There is a desire from the business for a better disaster recovery solution for email and Blackberry servers.

4. Environmental monitoring of server rooms needs to be tied into a central control point to insure it is remotely accessible.

Facilities Lessons Learned

1. We should have drilled more rigorously on damage assessments. For the first couple of days, the damage assessments were verbal and led us to believe the damage was much more extensive than it was. It turned out only 15% to 20% of the work areas were damaged.

2. Conversely, our repair and re-occupancy time estimates were wildly optimistic. Based on initial reports, we planned

for a week long disruption. We were out for almost a month.

3. Need to have working knowledge prior to the incident of what local agencies will require to re-occupy a building.

4. Keep in mind the fire marshal and the building inspectors are not always in sync.

Questions?

Wilma Closing

In the end it was the knowledge, flexibility and perseverance of our people who really carried the day and made the recovery a success.

Franklin’s Approach to Planning for a Pandemic

Pandemic Agenda

• Goal of this presentation

• Likelihood of a Pandemic

• Basic Business Continuity Strategy

• Why plan

• How will a pandemic differ

• Basic elements of our plan

– Crisis Management

– Business Continuity Planning

– Technology

– General Services

– Human Relations

– Corporate Communications

• What our plan does not cover

Pandemic Background

3. Strategy: Our basic disaster planning strategy is to shift our operations to other sites for 3 to 5 days, after which we will then need to start to shift people to alternate sites. However, this will not work in a pandemic situation.

1. Goal: To provide an overview of Franklin’s current approach and thinking in regards to planning for a possible Pandemic.

2. Likelihood of a pandemic occurring: The question is more like earthquakes in California. It is not a question of if, but rather when and how bad. Some data points such as the 1918, 1957 & 1968 pandemics and SAR’s. But, no good data on frequency or severity.

Pandemic Background (Continued)

4. Why plan if civilization is going to collapse:

We used a “reasonable worst case scenario”. A scenario which we think is likely to occur. This is not a worst case scenario which anticipates the general breakdown of society and services.

5. How will a pandemic differ from our “normal incidents:

- Many sites are likely to be impacted at approximately the same time - Will not be able to shift people between sites - Site might be impacted, but not incapacitated- Sites affected for months not hours- Affects people directly not facilities or IT.- Employees may choose not to come to work.- No clear beginning or end.

Pandemic Plan Outline

Our pandemic plan is broken down into:

1. Crisis Management:

- Framework to address a pandemic

- Tabletop exercises

2. Business Continuity Planning:

- Guidance to business units on how to review their business continuity strategies and workflows against a

pandemic type scenario

3. Technology

- Steps to reduce the impact of a

pandemic on our data centers

- Increased remote work capabilities

- Reviewing other strategies

Pandemic Plan Outline (Continued)

4. General Services– Best practices for employee hygiene program and procedures for facility

managers to follow in the event of a pandemic

5. Human Relations– Global HR policy framework to provide recommendations to local HR

groups to address issues that are likely to arise in a pandemic

6. Corporate Communications

– Integrated communication plan

7. Plan Does not currently include:

- PPE such as Masks gloves, Etc.

- Antiviral Drugs such as Tamiflu- Vaccines

Questions?

Pandemic Closing

2020

All Disasters are Local:All Disasters are Local:Regionalizing Business Regionalizing Business ContinuityContinuity

Securities Transfer AssociationSecurities Transfer Association

2006 Annual Conference2006 Annual Conference

Brian TishukBrian TishukChicagoFIRST Executive DirectorChicagoFIRST Executive DirectorOctober 20, 2006October 20, 2006

Critical Critical InfrastructuresInfrastructures

Critical Critical InfrastructuresInfrastructures

Water

Transportation

FinancialServices

Energy

Emergency Services

Government Services

Telecommunications

Food

Defense Industrial Base

ChemicalIndustry

Postal & Shipping

Agriculture

PublicHealth

The The FinancialFinancial Sector Sector

OVERVIEW OF THE US FINANCIAL SYSTEMAs of June 3, 2002

Financial marketssecurities and futures

markets, OTC markets , etc.

Financial intermediariesbanks, insurance companies,

savings institutions,broker/dealers, FCMs, etc.

Lenders/Investorsindividuals, firms,

government

Borrowers/Issuersindividuals, firms,

government

Supervision &Regulation,Treasury

and CentralBank functions

Treasury,Fed, SEC,

OCC, CFTC,FDIC, OTS,NCUA, Stateinsurance &

financialmarket

authorities,SROs, etc.

Financial utilities: payment, clearing & settlement.Service providers

Critical public utilities and services: Telecommunications, power, transportation, public safety,insurance companies as recovery agents

funds

funds

returns

returns

returns

returns

funds

funds

Financial instrumentssecurities, futures,

annuities,loans, derivatives,

CP, FX, etc.

Financial sectorassociations and

trade groups

Private sectorchecks andbalances

audit,rating agencies,

public disclosure,etc.

Federal Financial Federal Financial PartnershipPartnership

Financial and Banking Information Financial and Banking Information Infrastructure Committee (FBIIC)Infrastructure Committee (FBIIC)

(formed (formed January 2002)January 2002)

Financial Services Sector Financial Services Sector Coordinating Council (FSSCC)Coordinating Council (FSSCC)

(formed June 2002)(formed June 2002)

President’s Working Groupon Financial Markets

PUBLIC SECTOR PRIVATE SECTOR

US TreasuryAssistant Secretary forFinancial Institutions

FBIIC CHAIR

Financial and Banking InformationInfrastructure Committee

(FBIIC)

US Treasury DepartmentCommodity Futures Trading Commission

Conference of State Bank SupervisorsFederal Deposit Insurance Corporation

Federal Housing Finance BoardFederal Reserve Board of Governors

Homeland Security CouncilNational Association of Insurance

CommissionersNational Credit Union Administration

New York Federal Reserve BankOffice of the Comptroller of the Currency

Office of Federal Housing Enterprise OversightOffice of Thrift Supervision

Securities and Exchange Commission

Financial Services Sector Coordinating Council

for CIP/HLS

Financial Services Trade Associations & Institutes

New York Stock ExchangeThe Clearinghouse

FS/ISACSecurities Industry Automation Corporation

The Options Clearing CorporationChicagoFIRST

NASDAQAMEXASIS

FBIIC FSSCC

Assistant Secretary forFinancial InstitutionsSECTOR LIAISON

Rhonda MacLeanSECTOR COORDINATOR

Treasury - Lead Agency(PDD 63)

The Role for Regional The Role for Regional

Public/Private Public/Private PartnershipsPartnerships

5/19/2003 2

Business Continuity Planning

Local/Regional

Coordination with city and state authorities Region specific table-top/simulation exercises for threat assessment Telecom traffic assessment

Protecting the financial services sector requires collaboration at alllevels of business.

Company

Protect intellectual capita l Provide contingency workspace Protect executive leadership Perform threat and vulnerability

assessments Prioritize recovery of a ll business

functions Test business continuity response

and recover plans Consider alternate sites for

operations Harden physical security Consider sharing recovery solutions

with trusted partners

Industry

Increase awareness amongstparticipants

Coordinate per iodic test of back-upnetworks and facil ities

Coordinate emergency contactinformation

Share best practices amongstmembers

Provide regulatory and legisla tivesupport for industry issues

Re-organize security of nation under theDepartment of Homeland Security

Allocate resources to protect nationalinfrastructure

Provide intelligence to private industrythrough ISACs

National

The Missing The Missing PiecePiece

To increase the To increase the resilience of resilience of financial services financial services in the event of a in the event of a regional disaster in regional disaster in collaboration with collaboration with the city, state, and the city, state, and federal agencies. federal agencies.

All Disasters are All Disasters are LocalLocal

How will that jurisdiction prevent, prepare for, and How will that jurisdiction prevent, prepare for, and respond to incidents?respond to incidents?

Do your business continuity plans Do your business continuity plans incorporate government response plans?incorporate government response plans?

How can coordination be fostered among How can coordination be fostered among jurisdictions?jurisdictions?

Regional partnerships can strengthen the Regional partnerships can strengthen the business continuity plans of participating business continuity plans of participating firmsfirms

Regional Partnerships:Regional Partnerships:Formed and FormingFormed and Forming

Miami (FloridaFIRST)Miami (FloridaFIRST) San Francisco (BARC FIRST; Bay Area Response Coalition)San Francisco (BARC FIRST; Bay Area Response Coalition) Los Angeles (SoCal FIRC; Financial Institutions Recovery Los Angeles (SoCal FIRC; Financial Institutions Recovery

Coalition)Coalition) Minneapolis (MN-ISAC; MN Security Board)Minneapolis (MN-ISAC; MN Security Board) Tampa Bay Region of FloridaFIRSTTampa Bay Region of FloridaFIRST HoustonFIRSTHoustonFIRST PhiladelphiaFIRSTPhiladelphiaFIRST ColumbusFIRSTColumbusFIRST Alabama Recovery Coalition for the Financial SectorAlabama Recovery Coalition for the Financial Sector Chicago (ChicagoFIRST)Chicago (ChicagoFIRST) Washington, DCWashington, DC DetroitDetroit AlaskaAlaska SeattleSeattle JacksonvilleJacksonville Las VegasLas Vegas New Orleans (still thinking about it)New Orleans (still thinking about it)

RPC FIRSTRPC FIRST

Fostering Collaboration among PartnershipsFostering Collaboration among Partnerships

ChicagoFIRST leading the formation of a CouncilChicagoFIRST leading the formation of a Council Council would share best practicesCouncil would share best practices Council would help one another with administrative Council would help one another with administrative

questionsquestions Council can plug into FSSCCCouncil can plug into FSSCC

RPC = RPC = Regional Partnership CouncilRegional Partnership Council FIRST = FIRST = Financial Industry Resilience, Security, and TeamworkFinancial Industry Resilience, Security, and Teamwork Formed in early 2006Formed in early 2006

The ChicagoFIRST ApproachThe ChicagoFIRST Approach(formed May (formed May

2003)2003)

ChicagoFIRST’s Primary ChicagoFIRST’s Primary ObjectivesObjectives

Obtain a seat at Chicago's 911 Center in the event of a Obtain a seat at Chicago's 911 Center in the event of a crisis that affects Chicago's financial communitycrisis that affects Chicago's financial community

LaSalle Bank/ABN AMROLaSalle Bank/ABN AMRO

Create permits/passes for essential personnel to safely Create permits/passes for essential personnel to safely access business facilities in the event of a general access business facilities in the event of a general evacuation of the city (credentialing)evacuation of the city (credentialing)

Northern Trust BankNorthern Trust Bank

Develop and communicate standard evacuation procedures Develop and communicate standard evacuation procedures for industry personnel to exit city limits in the event of a for industry personnel to exit city limits in the event of a disasterdisaster

JP Morgan Chase JP Morgan Chase

MembersMembers ABN AMRO / LaSalle BankABN AMRO / LaSalle Bank Allstate Insurance CompanyAllstate Insurance Company AonAon ArchipelagoArchipelago Ariel Capital ManagementAriel Capital Management Bank of AmericaBank of America Chicago Board Options Chicago Board Options

ExchangeExchange Chicago Board of TradeChicago Board of Trade Chicago Federal Home Loan Chicago Federal Home Loan

BankBank Chicago Mercantile ExchangeChicago Mercantile Exchange Chicago Stock Exchange Chicago Stock Exchange Fidelity National FinancialFidelity National Financial

Global Electronic Trading Global Electronic Trading CompanyCompany

Harris BankHarris Bank JP Morgan ChaseJP Morgan Chase Man FinancialMan Financial Mesirow FinancialMesirow Financial Mizuho Securities USAMizuho Securities USA Northern TrustNorthern Trust The Options Clearing The Options Clearing

CorporationCorporation PrivateBank and TrustPrivateBank and Trust UBSUBS Washington MutualWashington Mutual William Blair & CompanyWilliam Blair & Company

Strategic Partners (pg. 1 of 2)Strategic Partners (pg. 1 of 2)

Chicago Office of Emergency Management and Chicago Office of Emergency Management and CommunicationsCommunications

Chicago Police Department Chicago Police Department Commodity Futures Trading CommissionCommodity Futures Trading Commission FBI / InfraGardFBI / InfraGard Federal Deposit Insurance CorporationFederal Deposit Insurance Corporation Federal Emergency Management AgencyFederal Emergency Management Agency Federal Reserve Bank of ChicagoFederal Reserve Bank of Chicago Financial and Banking Information Infrastructure Financial and Banking Information Infrastructure

CommitteeCommittee Financial Services Information Sharing and Analysis Financial Services Information Sharing and Analysis

CenterCenter Financial Services Roundtable / BITSFinancial Services Roundtable / BITS Financial Services Sector Coordinating CouncilFinancial Services Sector Coordinating Council Futures Industry AssociationFutures Industry Association

Strategic Partners (pg. 2 of 2)Strategic Partners (pg. 2 of 2)

Great Lakes PartnershipGreat Lakes Partnership Illinois Department of Financial and Professional Illinois Department of Financial and Professional

RegulationRegulation Illinois Emergency Management AgencyIllinois Emergency Management Agency Illinois State PoliceIllinois State Police Illinois Terrorism Task ForceIllinois Terrorism Task Force National Futures AssociationNational Futures Association Office of the Comptroller of the CurrencyOffice of the Comptroller of the Currency Securities and Exchange CommissionSecurities and Exchange Commission Securities Industry AssociationSecurities Industry Association United States Attorney’s Office for the Northern United States Attorney’s Office for the Northern

District of IllinoisDistrict of Illinois United States Department of Homeland SecurityUnited States Department of Homeland Security United States Department of the TreasuryUnited States Department of the Treasury United States Secret ServiceUnited States Secret Service

Achieving Our GoalsAchieving Our Goals

Formal 911 Center Formal 911 Center SeatSeat Obtained seat at 911 Center in fall 2003Obtained seat at 911 Center in fall 2003

Primarily for government agenciesPrimarily for government agencies May use seat when Center is activatedMay use seat when Center is activated

Enhancements to seat at emergency operations centerEnhancements to seat at emergency operations center Set of individuals to staff the seat (with Chicago Fed Set of individuals to staff the seat (with Chicago Fed

help)help) Handbook with protocols for using the seat, Handbook with protocols for using the seat,

activating our crisis communicator, and contact activating our crisis communicator, and contact informationinformation

Private component of web site created and Private component of web site created and configured to provide a message board for posting configured to provide a message board for posting and recording critical informationand recording critical information

Information about the membership, including Information about the membership, including critical locations and essential employees, on the critical locations and essential employees, on the computer at the seatcomputer at the seat

Informal Information Informal Information SharingSharing Seat at 911 Center will be used rarelySeat at 911 Center will be used rarely

But the relationships with the city and state But the relationships with the city and state are invaluableare invaluable

Spring 2004 information about leaning Spring 2004 information about leaning transmission towertransmission tower

August 1, 2004 threats against financial August 1, 2004 threats against financial institutionsinstitutions

LaSalle Bank fire, December 2004LaSalle Bank fire, December 2004

Credentialing and Credentialing and EvacuationsEvacuations

CredentialingCredentialing Discovered city and state each seeking Discovered city and state each seeking

credentialing systems, but not coordinatingcredentialing systems, but not coordinating

City adopted credentialing pilot in which City adopted credentialing pilot in which ChicagoFIRST participatesChicagoFIRST participates

EvacuationsEvacuations Illinois Department of Transportation tabletops Illinois Department of Transportation tabletops

in 2004, 2005, and 2006in 2004, 2005, and 2006

September 7, 2006 evacuation drill in the LoopSeptember 7, 2006 evacuation drill in the Loop

Additional Additional AchievementsAchievements

Working GroupsWorking Groups Security Working GroupSecurity Working Group

Coordinating training needs and opportunitiesCoordinating training needs and opportunities

Coordinating physical security and optionsCoordinating physical security and options

Piloted NC4 Situation Awareness ServicePiloted NC4 Situation Awareness Service

Power Working GroupPower Working Group Understanding electricity in multi-tenant Understanding electricity in multi-tenant

buildingsbuildings

Sharing ComEd information among membersSharing ComEd information among members

Working GroupsWorking Groups Telecommunications Working GroupTelecommunications Working Group

Educating membershipEducating membership– GETSGETS– TSPTSP– SBC call forwardingSBC call forwarding

Surviving a central office failureSurviving a central office failure– TeleContinuityTeleContinuity– LEMKOLEMKO– Sprint IP networkSprint IP network

Working GroupsWorking Groups

Pandemic Planning Working GroupPandemic Planning Working Group Free exchange of HR, legal, & BCP information, without Free exchange of HR, legal, & BCP information, without

NDAsNDAs

Coordinating with state and local health departmentsCoordinating with state and local health departments

Coordinating with sector-wide effortsCoordinating with sector-wide efforts

Evaluating hiring a public health advisor for Evaluating hiring a public health advisor for ChicagoFIRSTChicagoFIRST

Tabletop scheduled for November 2, 2006Tabletop scheduled for November 2, 2006

Working GroupsWorking Groups Public Relations Working GroupPublic Relations Working Group

Single point of contact for the mediaSingle point of contact for the media Firms leverage membership with pressFirms leverage membership with press ChicagoFIRST increases media understandingChicagoFIRST increases media understanding

Crisis Communications Working GroupCrisis Communications Working Group Quarterly tests of the 911 Center proceduresQuarterly tests of the 911 Center procedures Quarterly tests of DialogicQuarterly tests of Dialogic (notification (notification

data)data) Quarterly tests of TeleContinuity and GETSQuarterly tests of TeleContinuity and GETS

2004 Milestones2004 Milestones Testified before House Financial Services Testified before House Financial Services

Committee on ChicagoFIRST as a partnershipCommittee on ChicagoFIRST as a partnership

9/11 Commission legislation identifies 9/11 Commission legislation identifies ChicagoFIRST as a modelChicagoFIRST as a model

GAO Report on Financial Market Preparedness GAO Report on Financial Market Preparedness praises ChicagoFIRSTpraises ChicagoFIRST

Treasury handbook identifies ChicagoFIRST as Treasury handbook identifies ChicagoFIRST as modelmodel

Tabletop on city’s response to Chicago Tabletop on city’s response to Chicago financial communityfinancial community

2005 Milestones2005 Milestones Tabletop focused on futures and options Tabletop focused on futures and options

marketsmarkets

Public television features ChicagoFIRSTPublic television features ChicagoFIRST

Fund Illinois Terrorism Task Force (ITTF) video Fund Illinois Terrorism Task Force (ITTF) video for the citizens of Illinoisfor the citizens of Illinois

Co-chair Private Sector Committee of the ITTFCo-chair Private Sector Committee of the ITTF

2006 Activities2006 Activities Mutual aid among the membersMutual aid among the members

Credentialing critical supplies like cashCredentialing critical supplies like cash

Evacuation drillEvacuation drill

City of Chicago camera programCity of Chicago camera program

Provided testimony on pandemic Provided testimony on pandemic preparedness to the House Financial preparedness to the House Financial Services CommitteeServices Committee

ChicagoFIRST ChicagoFIRST Model WorksModel Works The The model model is the partnership approach, not the goals is the partnership approach, not the goals

or organization of ChicagoFIRSTor organization of ChicagoFIRST FloridaFIRST covers the entire state, with FloridaFIRST covers the entire state, with

several regionsseveral regions BARC FIRST and SoCal FIRC split CaliforniaBARC FIRST and SoCal FIRC split California MN-ISAC has Target, Best Buy, 3M as membersMN-ISAC has Target, Best Buy, 3M as members

Leverage Leverage partnership to encourage public sector partnership to encourage public sector information sharing and improvementsinformation sharing and improvements

Seats in EOCsSeats in EOCs CredentialingCredentialing Access protocols for critical suppliesAccess protocols for critical supplies

The Value The Value PropositionProposition LaSalle Bank fireLaSalle Bank fire

Mizuho futures Mizuho futures

Cooperation vs. competition on employee safety and Cooperation vs. competition on employee safety and business continuity (mutual aid established after the business continuity (mutual aid established after the fire)fire)

Government appreciates single point of contactGovernment appreciates single point of contact

NC4 and TeleContinuity NC4 and TeleContinuity

Contact Contact InformationInformationBrian TishukBrian TishukExecutive DirectorExecutive DirectorChicagoFIRSTChicagoFIRST

312-322-4441 312-322-4441

brian.tishuk@chicagofirst.orgbrian.tishuk@chicagofirst.org

www.chicagofirst.orgwww.chicagofirst.org