overview
This document outlines the Business Continuity Plan and Contingency Plan for the operations of Take Charge Financial! and it is prepared for your use in the event of a disruption or critical event that interrupts the normal service plan of the company.
Despite the efforts of each business,state and local government and federal agency to renovate,validate,and implement their mission-critical information systems,the financial industry remains vulnerable to the disruption of its business processes,and this could affect clients of the firm. Because most companies in the financial industry are highly dependent on information technology to carry out their business,a business disruption induced failure or one or more mission critical systems may have a severe impact on a financial services firm’s ability to deliver core business services.
In light of these risks,the United States Securities and Exchange Commission (the ‘SEC’) and FINRA (Financial Industry Regulation Authority) have implemented programs to attempt to mitigate the risks associated with business failure in the financial industry which would be caused by an event instigating a failure to deliver financial services as a result of a significant business interruption and disruption. Specifically,the SEC has mandated that each FINRA member create and maintain business continuity plans and supply FINRA with emergency contact information. This is intended to assist investors in times of crisis and information is contained in this document.
Ultimately,the business continuity planning process focuses on reducing the risk of business failures resulting from business disruptions. It safeguards a financial firm’s ability to produce a minimum acceptable level of outputs and services in the event of failures of internal or external mission-critical information systems and services. While this is not intended to be a long term solution to all situations which create a significant business disruption,the information herein is directed to assisting Take Charge Financial! to prepare for a time of critical circumstances and potential crisis.
Please keep this document with your brokerage records for easy reference.
Regulatory Background
statement of objective
Based upon discussions with the SEC and the United States General Accounting Office,the experiences of September 11,2001 and comment letters received in response to Notice to Members 02-23 (April 2002) (‘NtM 02-23’),FINRA implemented FINRA Rule 3510 (the ‘Rule’). The Rule recognizes that business continuity plans should reflect the particular operations and activities of the respective member firm and given the diverse nature of the FINRA membership,the Rule allows member firms,such as Take Charge Financial!,to tailor plans to suit their size,business,and structure.
The following describes the plan structure for Take Charge Financial!
plan elements
The Business Continuity Plan (the ‘Plan’) for Take Charge Financial! (referred to herein as the ‘Firm’) addresses the elements set forth in the Rule. The Rule requires that a member’s business continuity plan addresses,at a minimum,ten critical elements,as follows:
- Data Back-up and recovery (hard copy electronic)
- All Mission Critical Systems
- Financial and Operational Assessments
- Alternate Communications Between Customers and the Firm
- Alternate Communications Between the Member and its Employees
- Alternate Physical Location of Employees
- Critical Business Constituents,Banks,and Counter-Party Impact
- Regulatory Reporting
- Communication with Regulators
10. How the Member Will Assure Customers’ Prompt Access to Their Funds and Securities in the Event that the Member Determines that it is Unable to Continue its Business.
emergency contact
Executive management is aware of the potentially devastating financial,organizational,and political consequences of the failure of one or more mission-critical information systems. The two emergency contact persons for the Firm are:
- Joan Perry: President;office phone number:(408) 399-6600;cell phone number:(408) 438-6038,facsimile number (408) 399-6606 and her email address is as follows: joan.perry@takechargefinancial.com.
- Norman Nielsen: phone number: (402) 394-5405 ext 300;and his email address is as follows: norman@bestionwater.com.
The Emergency Contact persons are reported to FINRA through the FINRA contact system at www.finra.com/ncs.asp and they will be updated in the event of a material change. Joan Perry (the ‘Executive Representative’ for the Firm) will review them within 17 business days of each quarter.
firm business description
Take Charge Financial! is registered as a broker/dealer with the SEC,state regulatory jurisdictions,and is a member of FINRA. The Firm is organized in the State of Pennsylvania as a Corporation.
The Firm’s primary business is money management,under an Advisory Agreement,for individuals,trusts,retirement plans and other retail investors.
Take Charge Financial! maintains a minimum net capital requirement in accordance with SEC Rule 15c3-1(a)(2)(vi). The Firm’s clears all transactions on a fully disclosed basis through National Financial Securities Corp. (‘NFSC’) pursuant to the terms of a fully disclosed Clearing Agreement (the ‘Clearing Agreement’) with NFSC. Under the terms of the Clearing Agreement,the Firm does not provide any clearing services for itself or others. The Firm accepts and enters orders on behalf of its retail customers. All transactions are sent to NFSC,which executes orders,compares them,allocates them and clears and settles such trades. NFSC also maintains customer accounts,holds securities and cash in the accounts,can grant customers access to their client accounts,and delivers funds and securities out to account holders. In no event does Take Charge Financial! obtain and maintain custody or possession of customer funds or securities.
With respect to the daily trade volume of the Firm,the Firm introduces its trades through NFSC and the monthly volume of trades is varied. 100% of the business activity of the Firm is with retail clients. Joan Perry is the only registered person with the Firm.
clearing firm contact information
The Clearing Firm for Take Charge Financial! is National Financial Securities Corp. NFSC is a vital partner to the Firm. NFSC can be contacted directly by a client of Take Charge Financial! in the event of a disruption of service. The contact information for NFSC is as follows:
NFSC can be contacted at:
- Physical Address: 82 Devonshire Street,L4C,in Boston Mass.
- By Phone: at (617) 563-5977
- NFSC Website: www.nationalfinancial.com
Contact Person at NFSC:
- NFSC has designated any available customer representative as the Contact.
- By Phone: (617) 563-5977
office locations
Take Charge Financial! has one office location at 315 University Ave.,Los Gatos,CA 95030. The phone number of the Firm is: (408) 399-6600. An alternative phone number is (408) 399-6601. The Firm’s fax number is:(408) 399-6606. All mission critical systems maintained by the Firm are located at this address.
alternative physical location
If an alternative location is needed,Take Charge Financial! will move to 119 University Ave.,Los Gatos,CA. The alternative phone number is:(408) 438-6038.
customer access to funds and securities
Take Charge Financial! does not maintain custody of customers’ funds or securities.
Funds and Securities of the Firm are maintained at our Clearing Firm by National Financial Securities Corp. and held within Customer accounts. In the event of an internal or external crisis,if telephone service is available,persons of the Firm will be available to take customer orders or instructions and contact NFSC on their behalf. In the event that customers of the Firm are unable to access the Firm,wither at its primary phone number,the Firm emergency number,or through the Firm’s website at www.takechargefinacial.com,customers will be able to contact NFSC directly or instructions on how they may obtain prompt access to funds and securities,order entry and process other trade-related,cash and security transfer transactions for the Firm’s customers. The Firm will make this information available to its customers through the disclosure policy,a copy of which is attached as Attachment B herein.
In the event that SIPC (Security Investor Protection Corp) determines that the Firm is unable to meet its obligations to the customers of the Firm,or if the liabilities of the Firm exceed its assets in violation of SEC Act Rule 15c3-1,SIPC may seek to appoint a trustee to disburse the assets of the Firm to customers. The Firm will assist SIPC and such trustee by providing its books and records identifying customer accounts subject to SIPC regulation.
data back-up and recovery
Electronic and Hard Copy Books and Records:
Take Charge Financial! maintains its primary hard copy books and records and electronic records at 315 University Ave.,Los Gatos 95030. Joan Perry,President (408) 438-6038 is responsible for the maintenance of these books and records. Additionally,customer account information is stored on electronic disk in an off-site location and maintained by Norman Nielsen at 50196 U.S. Hwy 20 Inman,NE 68742,and is available in the event of business disruption at the main office of the Firm in Los Gatos. Norman Nielsen (402) 394-5405 ext 300.
The Firm maintains the following document types and forms that are not transmitted to NFSC and or not maintained electronically on WebCRD: (1) New Account documentation and forms,(2) financial records,including supporting documentation (3) corporate records for the Firm (4) client application for variable products (5) any documentation related to alternative investments (6) electronically generated documents. Additionally,the Firm’s accountants,attorney’s and compliance consultants maintain duplicate copies of records related to those matters that they handle,and agree to allow access to these records in the event of the loss of such by the Firm.
Back-Up Procedures:
To the extent that the Firm does not have electronic copies of hard-copy books and records,the Firm maintains a back-up hard copy of all operational and client critical documents,contracts,and other books and records off-site. Critical paper records are backed up as necessary to assure that a duplicate set of those critical records are maintained,which is generally at the time such documents are finalized or completed.
The Firm computer and electronic records such as computerized accounting records,electronically generated documents,and e-mails shall be backed up on a weekly basis. The backup copies are maintained at the off-site location,and off-site server and/or CDs or disks. The off-site location for CDs and disks is:Norman Nielsen at 50196 U.S. Hwy 20 Inman,NE 68742.
In the event of an internal of external crisis that causes the loss of the paper records of the Firm,it will physically recover them from its back-up site. If the primary site is inoperable,the Firm will continue operations from its back-up site or an alternative location. For the loss of electronic records,the Firm will either physically recover the storage media or electronically recover data from its back-up site,or,if its primary site in inoperable,continue operations from a back-up or an alternative location.
clearing firm records
Copies of confirmations,account statements,and order tickets that are entered electronically are maintained by NFSC,the Clearing Firm. CD copies of these records are provided to the Firm and kept off-site. In the event of a disruption of services,the Firm shall access the clearing firm’s copy of these records via internet or alternative computer line. The Firm’s personnel shall use personal computers to accomplish this,or Firm computers if such are maintained at an alternative site.
financial and operational assessments
Operational Risk:
In the event of a disruption of service critical event,persons of the Firm will immediately identify what means will permit the Firm to communicate with its customers,employees,critical business constituents,critical banks,critical counter parties,and regulators.
Although the effects of such a critical event will determine the means of alternative communication,the communications options to be employed will generally include (1) the website for the Firm (2) facsimile (3) e-mail (4) telephone (5) telephone voicemail (6) cellular and mobile phone service (7) service providers,including consultants,attorneys and accountants (8) messenger and (9) mail service. In addition,the Firm persons will retrieve key activity records as described in the section,Data Back Up and Recovery.
Financial and Credit Risk:
In the event of a disruption of service critical event,the Firm personnel will determine the value and liquidity of investments in Firm and Customer Accounts. The Firm will determine its ability to continue to fund operations and remain in capital compliance. The Firm will contact the Clearing Firm,critical banks and customers to apprise them of the financial status of the Firm. If the Firm determines that it may be unable to meet its obligations to those counter-parties or otherwise continue to fund the operations of the Firm,the Firm will request additional financing from credit sources to fulfill its obligations to its customers. If the Firm cannot remedy a capital deficiency,appropriate notices will be filed by the Firm with the regulators and immediately take appropriate steps,including the referral of its customers to the Clearing Firm.
mission critical systems
Mission Critical Systems Definition:
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.
Identify Business Systems and Assessment:
The Firm has identified the mission critical systems utilized by the Firm in providing services to its customers.
Take Charge Financial!: The Firm has primary responsibility for establishing and maintaining its business relationships with customers,and the sole responsibility for maintaining the mission critical functions of order taking and entry. Its mission critical systems include desktop computers,phone systems and Microsoft Outlook and ACT,the Firm’s customers records database.
National Financial Services Corp.: The Clearing Firm works with the Firm pursuant to the terms set forth in the clearing contract between NFSC and the Firm. NFSC provides for 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 to the customers of the Firm.
The contract between NFSC and the Firm provides that NFSC will maintain a business continuity plan and the capacity to execute that plan. NFSC represents that it will advise the Firm of any material changes to its plan that might affect the ability of the Firm to maintain its business,and a copy of the executive summary its plan is attached herein as Attachment C. In the event that NFSC executes its plan,it represents that it will notify the Firm of such execution and provide the Firm with equal access to services as its other customers. If the Firm reasonable determines that NFSC has not or cannot put its plan in place quickly enough to meet the needs of the Firm,or is otherwise unable to provide access to such services,NFSC represents that it will assist the Firm in seeking services from an alternative source.
NFSC represents that:(1) it backs up the records of the Firm at a remote site and (2) it operates a back-up operating facility in a geographically separate area with the capability to conduct the same volume of business as the primary site. Additionally,NFSC has 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 regularly.
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.
take charge financial!’s mission critical systems
Order Taking: Currently,the Firm makes investment decisions and executes trades on behalf of its customers. The Firm may also receive orders from customers in person,via telephone,and on-line. During a critical business disruption event,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 its customers when communications become available to tell them what alternatives they have to send their orders to the Firm. Customers will be informed of alternatives by whatever methods are available. If necessary,the Firm will advise customers to place orders directly with NFSC at such contact point as NFSC advises,and at the numbers included in the ‘Contact’ Section herein.
Order Entry: Currently the Firm enters non-application order electronically,sending them to the Clearing Firm. In the event of a critical event disruption,the Firm will enter and send records to NFSC by the fastest alternative means available,which includes email,web-site,telephonically and or facsimile. In the event of a critical event disruption,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 operation. In addition,during an event of critical disruption,the Firm may need to refer its customers to deal directly with NFSC for order entry.
Order Execution: Currently,the Firm’s orders are executed through the Clearing Firm,NFSC.
Other Services Currently Provided to Customers: The Firm provides no other services than those listed in this Section.
mission critical systems provided by NFSC
The Firm relies,by contract,on its Clearing Firm,NFSC,to provide order execution,order comparison,order allocation,clearance and settlement of securities transactions,the maintenance of customer accounts,access to customer accounts,and the delivery of funds and securities.
alternate communications between the firm and customers,employees and regulators
Customers: The Firm communicates with customers using the telephone,our website,fax,US mail services and in the personal visits at the Firm’s offices or at the customer’s location. In the event of a critical event disruption,the Firm will assess which means of communication are still available to it,and use the means closest in speed and form,either written oral,to the means that have been used in the past to communicate with the other party. For example,it the Firm has communicated with a party by telephone but the internet is available,the Firm will use the means most available.
Employees: The Firm communicates with its employees using the telephone,email and in person. In the event of a critical event disruption,the Firm will access which means of communication are still available to it,and use the means closest in speed and form,either written or oral,to the means that have it 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. With respect to the call tree,a copy of the corporate phone directory,including home phone numbers and email addresses will be maintained in the Firm’s office.
Regulators and Regulatory Reporting: The Firm is registered as a broker/dealer with the SEC,the State of California,and is a member of FINRA (collectively referred to as ‘Regulators’). The Firm currently communicates with the Regulators using the telephone,email,fax,US Mail,delivery services,in person and through third party service providers. In the event of a critical event disruption,the Firm will assess which means are still available to it,and use the means closest in speed and form,either written or oral,to the means that have been used in the past to communicate with the other party.
With respect to regulatory reporting,the Firm currently files reports with the respective Regulators electronically. In the event of a critical business disruption,the Firm will check with the Regulators to determine which means of filing are still available to it,and use the means closest to the speed and form to the previous filing method used by the Firm. The Firm may also utilize facsimile,email or other telecommunications to file the Firm’s regulatory reports on a timely basis. In the event that the Firm cannot contact the Regulators,it will continue to file reports on a timely basis by whatever means is available for telecommunication transfer.