High Quality
Open the downloaded document, and select print from the file menu (PDF reader required).
GAO
United States Government Accountability Office
Report to Congressional Requesters
INFLUENZAPANDEMICKey Securities MarketParticipants AreMaking Progress, but Agencies Could DoMore to AddressPotential InternetCongestion andEncourage Readiness
October 2009GAO-10-8
What GAO Found
United States Government Accountability Office
Why GAO Did This Study
H
ighlights
AccountabilityIntegrityReliability
October 2009
INFLUENZAPANDEMIC
Key
S
ecuritie
s
Market Participant
s
Are Makin
g
Pro
g
re
ss
, but A
g
encie
s
Could Do More to Addre
ss
Potential Internet Con
g
e
s
tion and Encoura
g
eReadine
ss
Increased demand during a severe pandemic could exceed the capacities of Internet providers’ access networks for residential users and interfere withteleworkers in the securities market and other sectors, according to a DHSstudy and providers (see figure below). Private Internet providers have limitedability to prioritize traffic or take other actions that could assist criticalteleworkers. Some actions, such as reducing customers’ transmission speedsor blocking popular Web sites, could negatively impact e-commerce andrequire government authorization. However, DHS has not developed astrategy to address potential Internet congestion or worked with federal partners to ensure that sufficient authorities to act exist. It also has notassessed the feasibility of conducting a campaign to obtain public cooperationto reduce nonessential Internet use to relieve congestion. DHS also has notbegun coordinating with other federal and private sector entities to assessother actions that could be taken or determine what authorities may beneeded to act.
Likely Internet Con
g
e
s
tion Point
s
Affectin
g
Teleworker
s
S
o
u
rce: GAO.
Internet
Internet
a
cce
ss
edInternet
a
cce
ss
denied/del
a
yedRe
s
identi
a
lconnection deviceRe
s
identi
a
lconnection deviceActive
a
nd in
a
ctive re
s
identi
a
l
us
er
s
Active
a
nd in
a
ctive re
s
identi
a
l
us
er
s
Internet
Normal weekday usagePotential pandemic weekday usage
Because the key securities exchanges and clearing organizations generally use proprietary networks that bypass the public Internet, their ability to executeand process trades should not be affected by any congestion. In analyzingseven critical market organizations, GAO found they had prepared pandemic plans that addressed key regulatory elements, including hygiene programs tominimize staff illness and continuing operations by spreading staff acrossgeographic areas. However, not all had completed or documented analyses of whether they would have sufficient staff capable of carrying out criticalactivities if many of their employees were ill. Also, not all had developedalternatives to teleworking if congestion arises. SEC staff have been regularlyexamining market organizations’ readiness, but could further reduce risk of disruptions by ensuring that these organizations prepare complete staffinganalyses and teleworking alternatives.
Concerns exist that a more severe pandemic outbreak than 2009’scould cause large numbers of people staying home to increasetheir Internet use and overwhelmInternet providers’ networkcapacities. Such networkcongestion could prevent staff frombroker-dealers and other securitiesmarket participants fromteleworking during a pandemic.The Department of HomelandSecurity (DHS) is responsible forensuring that criticaltelecommunications infrastructureis protected.GAO was asked to examine a pandemic’s impact on Internetcongestion and what actions can beand are being taken to address it,the adequacy of securities marketorganizations’ pandemic plans, andthe Securities and ExchangeCommission’s (SEC) oversight of these efforts. GAO reviewedrelevant studies, regulatoryguidance and examinations,interviewed telecommunications providers and financial market participants, and analyzed pandemic plans for seven criticalmarket organizations.
What GAO Recommend
s
GAO recommends DHS begin planning to address Internetcongestion and SEC better reviewmarket participants’ plans. SECagreed. DHS agreed to address potential congestion for nationalsecurity and emergencycommunications, but not morebroadly. GAO believes DHS shoulddo more to address potentialInternet congestion.
è
Page i GAO-10-8 Influenza Pandemic
Contents
Letter
1
Background 3 Internet Congestion During a Severe Pandemic That HampersTeleworkers Is Anticipated, but Responsible Government Agencies Have Not Developed Plans to Address SuchCongestion and May Lack Clear Authority to Act 14Key Securities Market Participants Have Prepared Response Plans,but Not All Have Documented Staffing Analyses or Plans for Alternatives to Teleworking 29SEC Has Taken Significant Steps to Assess Securities MarketOrganizations’ Pandemic Preparedness, but Could Do More 40Conclusions 45 Recommendations for Executive Action 47 Agency Comments and Our Evaluation 47
Add a Comment