2020 BUSINESS CONTINUITY PLAN (BCP)
SECTION 1. FIRM POLICY
FINRA Rule 4370
The Firm will maintain this written business continuity plan identifying procedures relating to an emergency or significant business disruption. The procedures will be reasonably designed to enable the Firm to meet its existing obligations to customers. In addition, the procedures will address the Firm’s existing relationships with other broker-dealers and counter-parties. The business continuity plan will be made available promptly upon request to FINRA staff.
The Firm will update its plan in the event of any material change to the Firm’s operations, structure, business, or location. The Firm will also conduct an annual review of its business continuity plan to determine whether any modifications are necessary for light of changes to the Firm’s operations, structure, business, or location.
The elements that comprise the business continuity plan include, data back-up and recovery (hard copy and electronic), all mission-critical systems, financial and operational assessments, alternate communications between customers and the Firm, alternate communications between the Firm and its employees, the alternate physical location of employees, critical business constituent, bank, and counter-party impact, regulatory reporting, communications with regulators and how the Firm will assure customers’ prompt access to their funds and securities in the event the Firm determines that it is unable to continue its business.
The Firm will designate Patrick Walker a member of senior management to approve the plan and who will also be responsible for conducting the required annual review. Moreover, he has the authority to execute this BCP.
The Firm will disclose to its customers how its business continuity plan addresses the possibility of future significant business disruption and how the Firm plans to respond to events of varying scope. At a minimum, the disclosure will be made in writing to customers at account opening, posted on the Firm’s Web site and mailed to customers upon request.
The Firm will promptly update its emergency contact information, via electronic or other means as FINRA may specify, in the event of any material change. With respect to the designated emergency contact persons, the Firm will identify, review, and, if necessary, update such designations in the manner prescribed by NASD Rule 1160.
The Firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and Firm property, making financial and operational assessments, quickly recovering and resuming operations, protecting all of the Firm’s books and records, and allowing customers to transact business. In the event the Firm determines it is unable to continue conducting business, the Firm will assure customers prompt access to their funds and securities.
1.1 Significant Business Disruptions (SBDs)
The plan anticipates two kinds of SBDs, internal and external. Internal SBDs only affect the Firm’s ability to communicate and conduct business. An example of such an event would be a fire in the Firm’s office building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. The response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of the clearing firm.
SECTION 2. EMERGENCY CONTACT PERSONS
FINRA Rule 4370, NASD Rule 1160
The Firm’s two emergency contact persons are: Patrick Walker Tel: 516-998-5322
Email: firstname.lastname@example.org and Nikolas Costello email, email@example.com. These names will be updated in the event of a material change pursuant to NASD Rule 1160 and NTM 07-42, and the Firm’s Executive Representative will verify this information on an annual basis and will comply promptly with any request for such information.
SECTION 3. BUSINESS DESCRIPTION
The Firm is an introducing firm and does not perform any type of clearing function for itself or others. Furthermore, the Firm does not hold customer funds or securities. The Firm accepts and enters orders. All transactions are sent to the clearing firm which executes the orders, compares them, allocates them, and clears and settles them. The clearing firm also maintains the customers’ accounts, can grant customers access to them and can deliver funds and securities.
SECTION 4. OSJ AND BRANCH OFFICE LOCATIONS
A. Name of City
This OSJ office is located at 150 Motor Parkway, suite 206, Hauppague NY 11788. Its main telephone number is 516-666-7019. Employees travel to the office by means of foot, car, train, and bus. The Firm engages in order taking and entry at this location.
SECTION 5. ALTERNATIVE PHYSICAL LOCATION(S) OF EMPLOYEES
FINRA Rule 4370
In the event of an SBD, the Firm will move the staff from affected offices to the closest unaffected office location. If another office location is unavailable to receive those staff or the Firm does not maintain an alternate location, they will be instructed to work from home until an alternative site is determined.
SECTION 6. CUSTOMERS’ ACCESS TO FUNDS AND SECURITIES
FINRA Rule 4370
Securities Exchange Act Rule 15c3-1; 15 U.S.C. 78eee (2003)
The Firm does not maintain custody of customers’ funds or securities. They are maintained at the clearing firm. In the event of an internal or external SBD, if telephone service is available, registered persons will take customer orders or instructions and contact the clearing firm on their behalf, and if the Firm web site is available, the Firm will post on the site that customers may access their funds and securities by contacting the home office.
If SIPC determines that the Firm is unable to meet the obligations to its customers or if the liabilities exceed the assets in violation of Securities Exchange Act Rule 15c3-1, SIPC may seek to appoint a trustee to disburse the assets to customers. The Firm will assist SIPC and the trustee by providing the books and records identifying customer accounts subject to SIPC regulation.
SECTION 7. DATA BACK-UP AND RECOVERY (HARD COPY AND ELECTRONIC)
FINRA Rule 4370
The Firm maintains its primary hard copy books and records and its electronic records at the home office.
All electronic records will be stored within a designated folder on the Firm’s electronic retention service.
In the event of an internal or external SBD that causes the loss of any paper records, the Firm can physically recover them from the electronic retention service. If the primary site is inoperable, the Firm will continue operations from the back-up site or an alternate location. For the loss of electronic records, the Firm will either physically recover the storage media or electronically recover data from the back-up site, or, if the primary site is inoperable, continue operations from the back-up site or an alternate location.
SECTION 8. FINANCIAL AND OPERATIONAL ASSESSMENTS
FINRA Rule 4370
8.1 Operational Risk
In the event of an SBD, the Firm will immediately identify the manner in which the Firm can communicate with customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of an SBD will determine the means of alternative communications, the communications options the Firm will employ will include the Firm web site, telephone voice mail, and secure e-mail.
8.2 Financial and Credit Risk
In the event of an SBD, the Firm will determine the value and liquidity of investments and other assets to evaluate the ability to continue to fund the operations and remain in compliance with all capital requirements. The Firm will contact the clearing firm, critical banks, and investors to apprise them of the financial status. If the Firm determines that the Firm may be unable to meet the obligations to those counter-parties or otherwise continue to fund operations, the Firm will request additional financing from banks or other credit sources to fulfill the obligations to customers and clients. If the Firm cannot remedy any capital deficiency, the Firm will file appropriate notices with the regulators and immediately take appropriate steps.
SECTION 9. MISSION CRITICAL SYSTEMS
9.1 Mission Critical Systems Provided by The Clearing Firm
The Firm’s “mission-critical systems” are those that ensure prompt and accurate processing of securities transactions, including order taking, entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities.
The Firm maintains primary responsibility for establishing and maintaining business relationships with customers and has sole responsibility for the mission-critical functions of order taking and entry. The clearing firm provides, through the contract, the execution, comparison, allocation, clearance, and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities.
The clearing firm represents that it will advise the Firm of any material changes to its business continuity plan that might affect the ability to maintain the business. In the event the clearing firm executes its plan, it represents that it will notify the Firm of such execution and provide the Firm equal access to services as its other customers. If the Firm reasonably determines that the clearing firm has not or cannot implement its plan in place to meet the needs of the Firm, or is otherwise unable to provide access to such services, the clearing firm represents that it will assist the Firm in seeking services from an alternative source.
The Clearing Firm represents that it maintains a business continuity plan, including redundant data centers and alternate processing facilities, to address interruptions to its normal course of business. These plans are reviewed annually and updated as necessary. The plans outline the actions the firm will take in the event of a building, city-wide, or regional incident, including relocating technology and operational personnel to pre-assigned alternate regional facilities. Technology data processing can also be switched to an alternate regional data center. All of the clearing firm’s operational facilities are equipped for resumption of business and are tested several times per year. The clearing firm’s recovery time objective for business resumption, including those involving a relocation of personnel or technology, is four hours. This recovery objective may be negatively affected by the unavailability of external resources and circumstances beyond their control.
The clearing firm further represents that in the event that the Firm experiences a significant business interruption, the clients may contact the clearing firm directly to process limited trade-related transactions, cash disbursements, and security transfers.
The clearing firm provides additional information for the clients concerning how to request funds and securities if the Firm cannot be contacted due to a significant business interruption via the Customer Support section on the Firm website or via phone for recorded instructions. If clients cannot access the instructions from the Firm website or the previously noted telephone number, the clearing firm may be contacted, as an alternate telephone number for recorded instructions.
The Firm relies, by contract, on the clearing firm to provide order execution, order comparison, order allocation and the maintenance of customer accounts, delivery of funds and securities, and access to customer accounts.
9.2 The Firm’s Mission Critical Systems
FINRA Rule 4370
9.2.1 Order Taking
Currently, the Firm receives orders from customers via telephone, fax, e-mail, or in-person visits by the customer. During an SBD, either internal or external, the Firm will continue to take orders through any of these methods that are available and reliable, and in addition, as communications permit, the Firm will inform customers when communications become available and inform them of the available alternatives regarding sending their orders to the Firm. Customers will be informed of alternatives by telephone, fax, e-mail, and/or via the Firm website. If necessary, the Firm will advise customers to place orders directly with the clearing firm.
9.2.2 Order Entry
Currently, the Firm enters orders electronically or by telephone. In the event of an internal SBD, the Firm will enter and send records to the clearing firm by the fastest alternative means available, which include phone and fax. In the event of an external SBD, the Firm will maintain the order in electronic or paper format, and deliver the order to the clearing firm by the fastest means available when it resumes operations. In addition, during an internal SBD, the Firm may need to refer the customers to deal directly with the clearing firm for order entry.
9.2.3 Order Execution
The Firm currently does not execute orders.
SECTION 10. ALTERNATE COMMUNICATIONS BETWEEN THE FIRM AND CUSTOMERS, EMPLOYEES, AND REGULATORS
FINRA Rule 4370
The Firm now communicates with customers via the telephone, e-mail, The Firm web site, fax, U.S. mail, and in-person visits at the Firm or at any other location. In the event of an SBD, the Firm will assess which means of communication are still available, and use the means closest in speed and form (written or oral) that the Firm has used in the past to communicate with the other party. For example, if the Firm has communicated with a party by e-mail but the Internet is unavailable, the Firm will call that party on the telephone and follow up where a record is needed with a paper copy in the U.S. mail.
The Firm now communicates with employees using the telephone, e-mail, and in person. In the event of an SBD, the Firm will assess which means of communication are still available and use the means closest in speed and form (written or oral) that the Firm has used in the past to communicate with the other party. The Firm will also employ a call tree so that senior management can reach all employees quickly during an SBD. The call tree includes all staff home and office phone numbers.
The Firm communicates with regulators using the telephone, e-mail, fax, U.S. mail, and in person. In the event of an SBD, the Firm will assess which means of communication are still available and use the means closest in speed and form (written or oral) that the Firm has used in the past to communicate with the other party.
SECTION 11. CRITICAL BUSINESS CONSTITUENTS, BANKS, AND COUNTER-PARTIES
FINRA Rule 4370
11.1 Business constituents
The Firm has contacted the critical business constituents (businesses with which the Firm have an ongoing commercial relationship in support of the operating activities, such as vendors providing critical services), and determined the extent to which the Firm can continue the business relationship with them in light of the internal or external SBD. The Firm will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when the Firm needs them because of a SBD to them or the Firm.
The Firm has contacted banks and lenders to determine if they can continue to provide access to funds that the Firm will need in light of the internal or external SBD. If the banks and other lenders are unable to provide access, the Firm will immediately seek alternatives.
The Firm has contacted critical counter-parties, such as other broker-dealers or institutional customers, to determine if the Firm will be able to carry out the transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, the Firm will work with the clearing firm or contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible.
SECTION 12. REGULATORY REPORTING
FINRA Rule 4370
The Firm will file reports with the regulators using paper copies in the U.S. mail, and electronically using fax, e-mail, and the Internet. In the event of an SBD, the Firm will check with the SEC, FINRA, and other regulators to determine which means of filing are still available and use the means closest in speed and form (written or oral) to effectuate any necessary filings. In the event that the Firm cannot contact any regulators, the Firm will continue to file required reports using the communication means available.
For more information
If you have questions about our business continuity planning, you can contact us at 646-876-3016.