A staff advisory on business continuity and disaster recovery planning issued Friday by three federal agencies, including the U.S. Securities and Exchange Commission, says firms should prepare for widespread disruption and consider alternative locations in light of the damage caused by Superstorm Sandy.

The advisory issued by the SEC, the Commodity Futures Trading Commission's Division of Swap Dealer and Intermediary Oversight, and the Financial Industry Regulatory Authority comes after a joint review by regulators in the aftermath of Sandy, which caused widespread damage to Northeastern states and closed U.S. equity and options market for two days in October 2012, said the SEC in its announcement.

The advisory was issued “to encourage firms to review their business continuity plans so as to improve responses to and reduce recovery time after significant large-scale events,” the SEC said.

Among other factors, the advisory said firms' business continuity plans should consider:

• The possibility of widespread lack of telecommunications, transportation, electricity, office space, fuel and water.

• The implications of a regional disruption when considering alternative locations.

• Critical vendor relationships.

• Contracting with multiple telecommunications carriers, rather than relying on a single telecommunications service provider.

• Providing customers and trading partners with contact information so that business can continue.

• Taking into account time-sensitive regulatory requirements.

• Conducting full business continuity plan tests and participating in industry testing at least annually.

“Market reliability and resilience are vital to investors and to the fair and efficient operation of capital markets,” Andrew Bowden, director of the SEC's Office of Compliance Inspections and Examinations, said in a statement. “In partnership with our fellow regulators at FINRA and the CFTC, we are sharing these lessons learned from Superstorm Sandy to help industry participants better prepare for future events that threaten to disrupt market operations.”

Copies of the advisory are available here.