Article 12 Backup policies and procedures, restoration and recovery procedures and methods

TL;DR

The Digital Operations Resilience Act from the EU seeks to ensure that ICT systems and data can be restored with minimal disruption and loss in the event of an incident by requiring financial entities to develop and document backup and restoration policies and procedures. These entities must also set up backup systems that can be activated without compromising security or data integrity, as well as test them periodically. They must have ICT systems in place that allow for timely restoration and have redundant ICT capacities. Central securities depositories must have a secondary processing site that is located away from the primary one and is capable of providing the necessary level of services while microenterprises must assess their need to maintain such sites. When restoring data, necessary checks must be performed in order to ensure data integrity.

For the purpose of ensuring the restoration of ICT systems and data with minimum downtime, limited disruption and loss, as part of their ICT riskmeans any reasonably identifiable circumstance in relation to the use of network and information systems which, if materialised, may compromise the security of the network and information systems, of any technology dependent tool or process, of operations and processes, or of the provision of services by producing adverse effects in the digital or physical environment; management framework, financial entitiesas defined in Article 2, points (a) to (t) shall develop and document:
1. backup policies and procedures specifying the scope of the data that is subject to the backup and the minimum frequency of the backup, based on the criticality of information or the confidentiality level of the data;
2. restoration and recovery procedures and methods.
proportionality Paragraph allows for application of the proportionality principle according to Article 4.
Financial entitiesas defined in Article 2, points (a) to (t) shall set up backup systems that can be activated in accordance with the backup policies and procedures, as well as restoration and recovery procedures and methods. The activation of backup systems shall not jeopardise the security of the network and information systemsmeans a network and information system as defined in Article 6, point 1, of Directive (EU) 2022/2555; or the availability, authenticity, integrity or confidentiality of data. Testing of the backup procedures and restoration and recovery procedures and methods shall be undertaken periodically.

proportionality Paragraph allows for application of the proportionality principle according to Article 4.
When restoring backup data using own systems, financial entitiesas defined in Article 2, points (a) to (t) shall use ICT systems that are physically and logically segregated from the source ICT system. The ICT systems shall be securely protected from any unauthorised access or ICT corruption and allow for the timely restoration of services making use of data and system backups as necessary.

For central counterpartiesmeans a central counterparty as defined in Article 2, point (1), of Regulation (EU) No 648/2012;, the recovery plans shall enable the recovery of all transactions at the time of disruption to allow the central counterpartymeans a central counterparty as defined in Article 2, point (1), of Regulation (EU) No 648/2012; to continue to operate with certainty and to complete settlement on the scheduled date.

Data reporting service providersmeans a data reporting service provider within the meaning of Regulation (EU) No 600/2014, as referred to in Article 2(1), points (34) to (36) thereof; shall additionally maintain adequate resources and have back-up and restoration facilities in place in order to offer and maintain their services at all times.

exemption Paragraph has a reduced scope, i.e., it does not apply to all financial entities in Article 2(1) but some or only those of a certain size.

proportionality Paragraph allows for application of the proportionality principle according to Article 4.
Financial entitiesas defined in Article 2, points (a) to (t), other than microenterprisesmeans a financial entity, other than a trading venue, a central counterparty, a trade repository or a central securities depository, which employs fewer than 10 persons and has an annual turnover and/or annual balance sheet total that does not exceed EUR 2 million;, shall maintain redundant ICT capacities equipped with resources, capabilities and functions that are adequate to ensure business needs. Microenterprisesmeans a financial entity, other than a trading venue, a central counterparty, a trade repository or a central securities depository, which employs fewer than 10 persons and has an annual turnover and/or annual balance sheet total that does not exceed EUR 2 million; shall assess the need to maintain such redundant ICT capacities based on their risk profile.

exemption Paragraph has a reduced scope, i.e., it does not apply to all financial entities in Article 2(1) but some or only those of a certain size.

proportionality Paragraph allows for application of the proportionality principle according to Article 4.
Central securities depositoriesmeans a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014; shall maintain at least one secondary processing site endowed with adequate resources, capabilities, functions and staffing arrangements to ensure business needs.
The secondary processing site shall be:
1. located at a geographical distance from the primary processing site to ensure that it bears a distinct risk profile and to prevent it from being affected by the event which has affected the primary site;
2. capable of ensuring the continuity of critical or important functionsmeans a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; identically to the primary site, or providing the level of services necessary to ensure that the financial entity performs its critical operations within the recovery objectives;
3. immediately accessible to the financial entity’s staff to ensure continuity of critical or important functionsmeans a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; in the event that the primary processing site has become unavailable.
proportionality Paragraph allows for application of the proportionality principle according to Article 4.

exemption Paragraph has a reduced scope, i.e., it does not apply to all financial entities in Article 2(1) but some or only those of a certain size.

COIF Paragraph has special considerations for 'critical or important functions' as defined by Article 3 point 22.
In determining the recovery time and recovery point objectives for each function, financial entitiesas defined in Article 2, points (a) to (t) shall take into account whether it is a critical or important functionmeans a function, the disruption of which would materially impair the financial performance of a financial entity, or the soundness or continuity of its services and activities, or the discontinued, defective or failed performance of that function would materially impair the continuing compliance of a financial entity with the conditions and obligations of its authorisation, or with its other obligations under applicable financial services law; and the potential overall impact on market efficiency. Such time objectives shall ensure that, in extreme scenarios, the agreed service levels are met.

proportionality Paragraph allows for application of the proportionality principle according to Article 4.

COIF Paragraph has special considerations for 'critical or important functions' as defined by Article 3 point 22.
When recovering from an ICT-related incidentmeans a single event or a series of linked events unplanned by the financial entity that compromises the security of the network and information systems, and have an adverse impact on the availability, authenticity, integrity or confidentiality of data, or on the services provided by the financial entity;, financial entitiesas defined in Article 2, points (a) to (t) shall perform necessary checks, including any multiple checks and reconciliations, in order to ensure that the highest level of data integrity is maintained. These checks shall also be performed when reconstructing data from external stakeholders, in order to ensure that all data is consistent between systems.

proportionality Paragraph allows for application of the proportionality principle according to Article 4.

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