The Montreal Exchange will require all of its members to have a business continuity plan in place by mid-2006.

The firm issued a regulatory note to its members today, informing them that the bourse’s special committee has approved a new rule requiring firms to have a business backup plan in place. The new rule takes effect July 31, 2006.

In the meantime, firms are expected to develop and test a continuity plan, and possibly have it reviewed by a third party (the bourse can require this at its discretion). The bourse says that the Investment Dealers Association will follow up with firms to ensure that they have a proper plan in place, that it is tested at least annually, and audited by a qualified third party as required.

The bourse will also review the plans as part of its desk reviews to ensure that they properly cover derivatives trading.