Business Continuity Plan
The Firm is committed to complying with NASD Rule 3510, NASD Rule 3520 and the provisions outlines in the NASD Notice to Members 04-37 in order to provide procedures for business continuity. The following section outlines the Firm’s procedures for complying with the provisions of these rules.
NASD Notice to Members 04-37
Emergency Contact Person
Our Firm’s emergency contact persons are:
30 West 63rd Street, Suite 24D
New York, NY 10023
These names will be updated in the event of a material change, and our Executive
Representative will review them within 17 business days of the end of each quarter.
NASD Rule 1150 - Executive Representative; Rule 3520
Emergency Contact Information
Our firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will assure customers prompt access to their funds and securities.
A. Significant Business Disruptions (SBDs)
Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in our 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. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing firm.
B. Approval & Execution Authority
The following registered principal is responsible for approving the plan, for conducting the required annual review, and has the authority to execute this BCP, including the use of our communication tree: Alan Gelband
C. Plan Location & Access
Our firm will maintain copies of its BCP plan and the annual reviews, and the changes that have been made to it for inspection.
We maintain an electronic copy of our plan on our internal computer system. In addition, an electronic copy of our plan is maintained at Buchanan Associates, with whom we maintain a Management Services Agreement.
Our firm conducts the following lines of business:
• PLA - Private Placement of Securities
Our firm is a Private Placement broker-dealer and does not perform any type of clearing function for itself or others. We do not hold customer funds or securities. Furthermore we do not introduce customers or customer accounts to any clearing firm.
We do not accept, enter or otherwise handle orders. The business that we conduct does not entail the execution, comparison, allocation, clearance or settlement of transactions.
Our firm deals exclusively with accredited investors, solely in the context of private placement activity. We do not conduct a traditional customer business and do not deal with non-accredited investors in any fashion. We do not maintain a clearing relationship or any other critical third party relationship of a similar nature that requires consideration for the purpose of this business continuity plan.
Our firm maintains the following office location:
30 West 63rd Street, Suite 24D
New York, NY 10023
Our employees may travel to our office by means of:
We engage in all business lines and activities outlined above at this/these locations.
Alternate Physical Location of Employees
In the event of an SBD, we will employ the use of home offices, home phone lines, cell phones, and e-mail access to communicate.
The primary alternative location will become the home addresses of our emergency contact persons, as outlined above and further detailed in our Communication Tree,
NASD Rule 3510c(6)
Customer Access to Funds & Securities
Our firm does not maintain custody of customers’ funds or securities. As a private placement broker-dealer, our business does not involve customer securities. Further, we do not handle funds in any capacity.
Therefore in the event of an internal or external SBD, there is no conceivable situation that would place any customer funds or securities at risk. If SIPC determines that we are unable to meet our obligations to our customers or if our liabilities exceed our assets in violation of Securities Exchange Act Rule 15c3-1, SIPC may seek to appoint a trustee to disburse our assets to customers. We will assist SIPC and the trustee by providing our books and records identifying customer accounts subject to SIPC regulation.
NASD Rule 3510(a)SEC RULE 15c3-1.
Data Backup & Recovery (Hard Copy & Electronic)
Our registered principal outlined in this plan is responsible for the maintenance of these books and records for the purposes of business continuity planning
Our firm maintains the following document types and forms:
Private Placement memoranda;
Due diligence files & client files for real estate transactions; Firm Financial books and records
Our firm maintains backup electronic copies of certain firm financial books and records at:
48 Wall Street
New York, NY 10005
Private placement documents are backed up electronically and also the originals are sent to the issuer; other files duplicated electronically and backed up with computerized files
The firm’s network and email server is backed up daily on tape drive and weekly tapes are taken offsite to the principal's home
Our firm can access replacements of these paper books and records at the private placement issuers since they hold the original documents and effect the transactions, and can access the tape drive of all of our electronic files at our principal’s home.
Our firm backs up its paper records by forwarding any private placement documents it may receive to the issuer and keeping a copy onsite.
The firm backs up its electronic records on a weekly basis, at minimum, and keeps a copy at the address listed above.
In the event of an internal or external SBD that causes the loss of our paper records, we will physically recover them from our back-up site. If our primary site is inoperable, we will continue operations from our back-up site or an alternate location. For the loss of electronic records, we will either physically recover the storage media or electronically recover data from our back-up site, or, if our primary site is inoperable, continue operations from our backup site or an alternate location.
NASD Rule 3510(c)(1).
Financial & Operational Assessment
A. Operational Risk:
As an introducing firm, our key activity records are maintained on mission critical systems provided by our clearing firm and/or third party vendors. We do not maintain internal, proprietary mission critical systems.
In the event of an SBD, we will immediately identify what means will permit us to communicate with our customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. The effects of an SBD will determine the means of alternative communication that we employ.
In addition, we will retrieve our key activity records as described in the section above, Data Back-Up and Recovery (Hard Copy and Electronic).
NASD Rules 3510(c)(3) & (f)(2).
B. Financial and Credit Risk
In the event of an SBD, we will determine the value and liquidity of our investments and
other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. We will contact our clearing firm, critical banks, and investors to apprise them of our financial status.
If we determine that we may be unable to meet our obligations to those counter-parties or
otherwise continue to fund our operations, we will request additional financing from our bank or other credit sources to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators and immediately take appropriate steps.
NASD Rules 3510(c)(3), (c)(8) & (f)(2).
Mission Critical Systems
“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.
As a private placement firm, we do not maintain internal proprietary “mission critical
systems.” Our business does not entail the processing of securities transactions.
A. Mission Critical Systems Provided by Our Firm Order Taking
Order taking is not applicable to our business.
B. Mission Critical Systems Provided By Our Clearing Firm
NASD Rules 3510(c) & (f)(1).
Alternate Communications Between Firm & Customers, Employees & Regulators
We now communicate with our customers via telephone, e-mail, fax, U.S. mail, and/or in person visits at our firm or at the other’s location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. For example, if we have communicated with a party by e-mail but the Internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail.
NASD Rule 3510(c)(4)
We now communicate with our employees via telephone, e-mail, and/or in person. In the
event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.
We will also employ a Communication Tree (attached as an Appendix to this document) so that senior management can reach all employees quickly during an SBD. The
Communication Tree includes all staff home and office phone numbers, and personal e-mail address (if available). We have identified persons, noted below, who live near each other and may reach each other in person:
The person to invoke use of the Communication Tree is outlined in Section II (B) of this plan.
NASD Rule 3510(c)(5).
We are currently members of the NASD and certain state regulatory authorities. We communicate with our regulators via telephone, e-mail, fax, U.S. mail, and/or in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.
NASD Rule 3510(c)(9).
Critical Business Constituents, Banks & Counter-Parties
A. Business Constituents
We will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when we need them because of a SBD to them or our firm.
NASD Rule 3510(c)(7).
Our banks and lenders will be relied upon to provide the financing that we will need in light of the internal or external SBD. The bank maintaining our operating account is:
UBS Financial Services Inc. Bank One, NA, Columbus, Ohio 43271, Attn: Customer Service.
If our banks and other lenders are unable to provide the financing, we will seek alternative financing immediately.
NASD Rule 3510(c)(7).
Where the transactions involving critical counter-parties cannot be completed, we will contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible.
NASD Rules 3510(a) &(c)(7).
Our firm is subject to regulation by the SEC, the NASD and by certain state regulatory authorities. We now file reports with our regulators using paper copies in the U.S. mail, and electronically using fax, e-mail, and the Internet.
In the event of an SBD, we will check with the SEC, NASD, and other regulators to determine which means of filing are still available to us, and use the means closest in speed and form (written or oral) to our previous filing method.
In the event that we cannot contact our regulators, we will continue to file required reports using the communication means available to us.
NASD Rule 3510(c)(8).
Disclosure of Business Continuity Plan
We disclose in writing a summary of our BCP to customers at account opening and immediately upon request. We also post the summary on our Web site at all times that a public website is available.
Our summary addresses the possibility of a future SBD and how we plan to respond to events of varying scope. In addressing the events of varying scope, our summary (1) provides scenarios of varying severity (e.g., a firm-only business disruption, a disruption to a single building, a disruption to a business district, a city-wide business disruption, and a regional disruption); (2) states whether we plan to continue business during that scenario and, if so, our planned recovery time; and (3) provides general information on our intended response. Our summary discloses the existence of back-up facilities and arrangements. Summary Disclosure Statement is attached as Appendix B of this document.
NASD Rule 3510(e)
Updates & Annual Review
Our firm will update this plan whenever we have a material change to our operations, structure, business or location. In addition, our firm will review this BCP annually to modify it for any changes in our operations, structure, business, or location.
NASD Rule 3510(b)