I. Firm Policy
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. Access to all data can be obtained through a backup disk drive which is recorded twice a month and kept in a safe off premises. Such data is accessible by both emergency contact persons.
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 and Execution Authority
Brian J Greenstein, a registered principal, is responsible for approving the plan and for conducting the required annual review. Brian J Greenstein has the authority to execute this BCP.
C. Plan Location and Access
Our firm will maintain copies of its business continuity plan (BCP) and the annual reviews, and the changes that have been made to it for inspection. We have given FINRA’s District 10 office a copy of our plan. An electronic copy of our plan is located on the Ardour server in the Ardour Business Continuity Folder and in the BCP Repository Service.
II. Business Description
Our firm conducts business in equity and fixed income securities. Our firm is an introducing firm and does not perform any type of clearing function for itself or others. Furthermore, we do not hold customer funds or securities. We accept and enter orders; we do not make markets. All transactions are sent to our clearing firm, which executes our orders, compares them, allocates them, clears and settles them. Our clearing firm also maintains our customers’ accounts, can grant customers access to them, and delivers funds and securities. Our firm services primarily institutional customers and only a limited number of retail customers . Our clearing firm is Apex Clearing Corporation (http://www.penson.com/). They have provided us the following alternative contacts in the event it cannot otherwise be reached: 1-800-696-3585 (toll-free) or 1-214-765-1009.
III. Office Locations
Our Firm has one office located in at 350 5th Avenue, Suite 3018, New York, NY 10118. The main telephone number is 1-212-375-2950. Our employees may travel to that office by means of foot, car, subway, train, bus, boat, and plane. We engage in order taking and entry at this location.
IV. Alternative Physical Location(s) of Employees
In the event of an SBD, we will move our staff from affected offices; they can be reached through email at Corpfin@ardourcapital.com.
V. Customers’ Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities, which are maintained at our clearing firm. In the event of an internal or external SBD, if telephone service is available, our registered persons will take customer orders or instructions and contact our clearing firm on their behalf, and if our Web access is available, our firm will post on our Web site a notice that customers may access their funds and securities by contacting Apex Clearing directly. The firm will make this information available to customers through its disclosure policy. Our firm is a member of SIPC. 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.
VI. Data Back-Up and Recovery (Hard Copy and Electronic)
Our firm maintains its primary hard copy books and records and its electronic records at 350 5th Avenue, Suite 3018, New York, NY 10118. Brian J. Greenstein is responsible for the maintenance of these books and records. Our firm maintains the following document types and forms that are not transmitted to our clearing firm: Employee ID’s and files, client correspondence, and regulatory correspondence. Our firm maintains its back-up hard copy books and records at an undisclosed location which is on file with FINRA. These records are paper copies and electronic copies. Brian J. Greenstein is responsible for the maintenance of these back-up books and records. Our firm backs up its paper records by copying and taking them to our back-up site. We back up our records every quarter. The firm backs up its electronic records twice monthly by Walter V. Nasdeo, and keeps a copy at the backup location. 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 back-up site or an alternate location.
VII. Financial and Operational Assessments
A. Operational Risk
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. Although the effects of an SBD will determine the means of alternative communication, the communications options we will employ will include our Web site, telephone voice mail, secure e-mail, etc. In addition, we will retrieve our key activity records as described in the section above, Data Back-Up and Recovery (Hard Copy and Electronic).
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, including ceasing operation and transfer of accounts.
VIII. Mission Critical Systems
Our 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. More specifically, these systems include: Apex Clearing’s AxisPro and RadiusPro via the Internet. Both systems are used for order entry and account detail entry. We have primary responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions of order taking and entry and execution. Our clearing firm provides, through 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. Our clearing firm contract provides that our clearing firm will maintain a business continuity plan and the capacity to execute that plan. Our clearing firm represents that it will advise us of any material changes to its plan that might affect our ability to maintain our business and presented us with an executive summary of its plan. In the event our clearing firm executes its plan, it represents that it will notify us of such execution and provide us equal access to services as its other customers. If we reasonably determine that our clearing firm has not or cannot put its plan in place quickly enough to meet our needs, or is otherwise unable to provide access to such services, our clearing firm represents that it will assist us in seeking services from an alternative source. Our clearing firm represents that it backs up our records at a remote site, and that it operates a back-up operating facility in a geographically separate area with the capability to conduct the same volume of business as its primary site. They have also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing, and it has confirmed that it tests its back-up arrangements every quarter. Recovery-time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure—particularly telecommunications—can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption resumption refers to the capacity to accept and process new transactions and payments after a wide-scale disruption. Our clearing firm has the following SBD recovery time and resumption objectives: recovery time period of 48 hours and resumption time of within the same business day.
A. Our Firm’s Mission Critical Systems
• 1. Order Taking
Currently, our firm receives orders from customers via telephone. During an SBD, either internal or external, we will continue to take orders through methods that are available and reliable, and in addition, as communications permit, we will inform our customers when communications become available to tell them what alternatives are available to send their orders to us. Customers will be informed of alternatives by phone and email. If necessary, we will advise our customers to place orders directly with our clearing firm at 1-214-765-1000.
• 2. Order Entry
Currently, our firm enters orders by recording them on paper and electronically and sending them to our clearing firm and/or floor brokers or ECN’s electronically through Omgeo OASYS and Omgeo Alert systems for execution or telephonically. Alternatively, we place customer orders via phone. We have contacted Alert and OASYS and were informed that, under its BCP, we can expect backup services within 24 hours. In the event of an internal SBD, we will enter and send records to our clearing firm by the fastest alternative means available, which include fax and/or email. In the event of an external SBD, we 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, we may need to refer our customers to deal directly with our clearing firm for order entry.
• 3. Order Execution
We currently execute orders by using Apex Clearing’s AxisPro system. In the event of an internal SBD, we would call in order directly via telephone. In the event of an external SBD, we would contact Apex Clearing and/or the ECN’s and floor brokers to establish which means of communications is still active and commence using that method.
B. Mission Critical Systems Provided by Our Clearing Firm
Our firm relies, by contract, on our 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. A copy of our clearing firm’s business continuity plan is on file and on the Ardour server in the file Ardour Continuity plan.
IX. Alternate Communications Between the Firm and Customers, Employees, and Regulators
We now communicate with our customers using the telephone, e-mail, fax, U.S. mail, and in person visits at our firm or at their 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.
We now communicate with our employees using the telephone, e-mail, and 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 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. We have identified persons, who live near each other and may reach each other in person.
We are currently a member of FINRA. In addition, we are registered with, and regulated by, the SEC, MSRB and the various states in which we conduct business. We communicate with our regulators using the telephone, e-mail, fax, U.S. mail, and 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.
X. Critical Business Constituents, Banks, and Counter-Parties
A. Business constituents
We have contacted our critical business constituents (businesses with which we have an ongoing commercial relationship in support of our operating activities, such as vendors providing us critical services), and determined the extent to which we can continue our business relationship with them in light of the internal or external SBD. 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.
We have contacted our banks and lenders to determine if they can continue to provide the financing that we will need in light of the internal or external SBD.
We have contacted our critical counter-parties, such as other broker-dealers or institutional customers, to determine if we will be able to carry out our transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, we will work with our clearing firm or contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible.
XI. Regulatory Reporting
Our firm is subject to regulation by: FINRA, SEC, AZ, CA, CT, DE, DC, FL, GA, IL, KS, KY, MA, MN, NC, NJ, NY, PA, TX, VA and WI. 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, FINRA, 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. FINRA, 1 Liberty Plaza, NY, NY, 10006, 1-212-412-8980.
XII. Disclosure of Business Continuity Plan
We disclose, in writing, a summary of our BCP to customers at account opening and refer to its full text on our Web site. We also post the summary on our Web site and mail it to customers upon request. 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 specific 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.
XIII. Updates and Annual Review
Our firm will review this plan whenever we have a material change to our operations, structure, business or location or to those of our clearing firm. In addition, our firm will review this plan annually, on June 1, to modify it for any changes in our operations, structure, business, or location, or those of our clearing firm.
XIV. Senior Manager Approval
Ardour’s Senior Management has approved this Business Continuity Plan as reasonably designed to enable our firm to meet its obligations to customers in the event of an SBD.