Software escrow safeguards urged to ensure seamless broker transition and contractual protections against vendor service failures. Stock brokers should adopt safeguards against software vendor failure by exploring a software escrow arrangement, reducing reliance on a single vendor, and including contract terms that grant access to design and development specifications if the vendor fails to provide services, require broker training and expertise development, impose penalty clauses for trading disruptions or software glitches, and obligate vendor cooperation in audits including forensic audits. Stock exchanges must implement systems to effect these measures, amend bye laws and notify and disseminate the requirements to brokers.
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Provisions expressly mentioned in the judgment/order text.
Software escrow safeguards urged to ensure seamless broker transition and contractual protections against vendor service failures.
Stock brokers should adopt safeguards against software vendor failure by exploring a software escrow arrangement, reducing reliance on a single vendor, and including contract terms that grant access to design and development specifications if the vendor fails to provide services, require broker training and expertise development, impose penalty clauses for trading disruptions or software glitches, and obligate vendor cooperation in audits including forensic audits. Stock exchanges must implement systems to effect these measures, amend bye laws and notify and disseminate the requirements to brokers.
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