Regulated VATPs have to prove they can withstand outages and security events without harming clients or markets. An incident response runbook gives teams a repeatable playbook and evidence that regulators and partners can inspect.
Define incident classes
Start by defining classes with clear triggers:
- Security: key compromise, suspicious withdrawals, unauthorized access, or data integrity issues.
- Availability: matching engine slowdowns, market data delays, or API degradation.
- Market integrity: surveillance alerts that suggest manipulation or misuse of privileged information.
- Third party: failures at banks, liquidity partners, cloud providers, or travel rule networks.
Each class should have explicit severity levels, time to acknowledge, and escalation paths.
Assemble the response team
Assign owners before incidents occur:
- Incident commander to coordinate actions and communication.
- Technical leads for custody, matching, and connectivity.
- Compliance and legal leads for regulatory notifications.
- Communications lead for client and partner updates.
Document backups for every role and keep contacts current.
Playbooks and evidence
For each incident type, build playbooks that include:
- Detection sources, runbooks for initial triage, and logs to capture immediately.
- Decision points for pausing trading, freezing withdrawals, or imposing risk limits.
- Communication templates for clients, regulators, and banking partners.
- Post-incident checklists that capture evidence, timestamps, and remediation tasks.
Store the output in a system that supports audit trails and retention policies.
Testing and drills
Run tabletop exercises and live failover tests on a schedule. Rotate scenarios across security breaches, listing problems, market manipulation, and third-party outages. Track findings and remediation in the same system used for production incidents so regulators can see continuous improvement.
Metrics that matter
Measure time to detect, time to contain, and time to recover for each incident type. Also track false positives and investigation throughput for surveillance alerts. These metrics help tune controls and prove effectiveness to regulators and institutional partners.
VATPs that treat incident response as a core product capability can maintain trust even when events occur. It is also a requirement for licensing: regulators want to see that runbooks, drills, and evidence exist before approving new functionality.