Business Continuity Plan

I. Emergency Contact Persons

Our firm’s emergency contact persons are: Bruce A. Lefavi: W: 801-486-9000, email: lefavi@lefavi.com; and Sherrie Bakelar W: 801 486-9000, email: sbakelar@lefavi.com; These names will be updated in the event of a material change, and our Executive Representative will review them regularly.

 

II. Firm Policy

Bruce A. Lefavi Securities, Inc.’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 and Execution Authority

Bruce A. Lefavi, a registered principal, is responsible for approving the plan and for conducting the required annual review. Bruce A. Lefavi has the authority to execute this BCP.

C. Plan Location and Access

Our firm will maintain copies of its BCP plan, the periodic reviews, and the changes that have been made to it for inspection. An electronic copy of our plan is located in the file/folder name: W:\Compliance\BCP. A hard copy can be found under Business Continuity Plan in our regulatory/compliance file with the rest of the related folders (our executed copy) and in our written supervisory procedures.

 

III. Business Description

Our firm conducts business primarily in mutual funds and variable annuities, but also to a lesser extent, equity and fixed income, as well as direct participation programs. 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. Most 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. In cases for which our clearing broker does not offer certain products, such as variable annuities and direct participation products, we invest directly with the offering company. The offering company in this case takes custody of the customer funds and invests in, holds, record keeps, reports on the customers’ assets as well as facilitates any transactions necessary, such as issuing funds or securities to the customer. In some cases, we will also purchase mutual fund shares directly from the offering mutual fund company as opposed to through our clearing broker. This is typically done when it is easier and less costly to the client to transact business in this manner. Our firm services only retail customers.

Our clearing firm is: INTL FCStone Inc. 2 Perimeter Park South, Suite 100W, Birmingham, AL 35243, 205-414-7230. Our contact is Don Exner, 800-264-4863, don.exner@intlfcstone.com.

The following is a summary of the important relevant facts to us regarding our clearing firm’s BCP that they provided to us:

In the event of an interruption of service at INTL FCStone, you will receive a blast email from our office indicating the nature of the interruption, an estimate of the duration of the interruption and alternate means for you to accomplish the desired service at issue. Subsequent to the remedy of the interruption, you will receive a blast email notification of the return to “normal business operations” interrupted by the disruption.

  1. INTL FCStone may be contacted, in an emergency, direct at 800.264.4863 or 800.778.6257
  2. Our BCP provides for switching all direct telephone numbers to a location (if necessary) where staff will be available to conduct the processing of transactions.
  3. Customers may identify contact information at www.intlfcstone.com
  4. Customers will have ability to access funds in their account by requesting a wire transfer or issuance of a check on an uninterrupted basis.
  5. Best practice is to have your customers use the check writing features for funds access.
  6. INTL FCStone has redundant connectivity to all exchanges, clearing agents and banks from alternate location cites.
  7. Depending on the severity of the interruption, while order entry capability will be uninterrupted, reports of execution may be slowed or delayed due to nature of interruption (i.e. exchange outage, executing agent outage, ILX or Beta interruption.)
  8. INTL FCStone uses Beta Systems for its processing.  Beta has dual locations, which “mirror” all processing live 24/7.  Consequently, any interruption should be minimal equaling only the time to reconnect to alternate location via back up data lines.  Your ILX/Beta internet connection known as “thin client” enables you to direct connect to Beta without being affected by a INTL FCStone location outage.
  9. It is unlikely that INTL FCStone will suffer a disaster of such magnitude that it will mandate that INTL FCStone discontinue operations.  FINRA requires that each member firm discuss this circumstance.  Your plan as well must address the possibility of business discontinuance.  Your customers, via the INTL FCStone BCP, will have access to account assets as described in the attached.

 

IV. Office Locations

Bruce A. Lefavi Securities, Inc. has only one office (main office) described below.

A. Main Office Location

Our Main Office Location is at 2323 Foothill Dr., Suite 100, Salt Lake City, UT 84109. Its main telephone number is 801-486-9000. Our employees may travel to that office by means of foot, car, bicycle, or bus. We engage in all OSJ record keeping including our electronic systems and backups, all back office functions, order taking and entry at this location.

 

V. Alternative Physical Location(s) of Employees

In the event of an SBD, staff will work from home using internet access, if available and personal phones. From home, staff has remote access to our computer systems, telephone access, and if needed access to offsite backup of all electronic records (client database, client records, office records, accounting records, etc.)

 

VI. Customers’ Access to Funds and Securities

Our firm does not maintain custody of customers’ funds or securities, which are maintained at our clearing firm, Sterne, Agee & Leach or directly with a particular mutual fund company or variable annuity company for our application way accounts. 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 or other custodian on their behalf, and if our Web access is available, our firm will post on our Website and social media accounts that customers may access their funds and securities by contacting the custodian of their account. For any INTL FCSTONE accounts they can contact INTL FCSTONE directly through Stearnagee.com. For any other accounts held by another custodian, they can contact the custodian by calling the number listed on their statement. The firm will make this information available to customers through its disclosure policy.

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.

SIPC contact Info:

  • sipc.org
  • Tel: 202-371-8300
  • Fax: 202-371-6728

 

VII. Data Back-Up and Recovery (Hard Copy and Electronic)

Our firm maintains its primary hard copy books and records and its electronic records at the main office: 2323 Foothill Dr., Suite 100, Salt Lake City, UT 84109. Bruce A. Lefavi, President, 801-486-9000, 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: New client profiles, additional client documents necessary for new accounts (trust agreement, articles of incorporation, retirement plan documents, etc.), tax returns, financial plans, and client disclosure forms (mutual fund disclosure, annuity disclosure, MLP disclosure, Switch Replacement Forms, etc.). Electronically, we keep client information (name, address, phone, ss#, birth date, etc), client notes, investment summaries and records, and financial plans. Our Client Relationship Management (CRM) database is stored offsite, administered by Ebix.com. If there are any problems, we can contact Chad Snyder at 626-585-3505 ext. 7236; Technical support can also be reached at 626-585-3515. Data in the CRM is backed up on a daily basis. Transactional data is stored by Black Diamond/Advent. If there are problems with this data, we can contact Michael Fleming at 904-565-5573. ; email: Michael.fleming@advent.com.

The firm backs up its electronic records daily by recording all relevant data on our main server to a digital backup tape, and keeps a weekly backup copy offsite.

In the event of an internal or external SBD that causes the loss of our paper records, we will recover what we can from our clearing broker, other custodians, and from any electronic copies we may have. If our primary site is inoperable, we will continue operations from our 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 alternate location.

 

VIII. Financial and Operational Assessments

Bruce A. Lefavi and any other relevant senior management will identify any significant changes in its operational, financial, and credit risk exposures in the event of an SBD during the annual compliance meeting.

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 internet (website and social media), telephone, alternative location telephone, company cell phones, telephone voice mail, and e-mail. 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, other custodians of our clients funds, 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 scaling down operations to a minimum in order to operate as long as possible to resolve problem and contact SIPC if necessary.

 

IX. 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: Smart Office CRM – Our database of client information and secondary source of investment records; eCustody – Our internet-based access to our clearing broker from which we can enter orders and access client records and investment information; clearing broker website – gives us access to client requests such as check requests, wire requests, change of address, etc. all these functions may be done via phone or email as well. The clearing broker website also gives us access to all of our activity reports such as trade blotters, commission activity reports, and exception reports. Telephone system – All clearing broker functions such as order entry and delivery of client funds may be done via phone with the clearing broker.

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. Our clearing firm or other custodians provide, 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, which is attached to our BCP. 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. Our clearing firm represents that it operates a back-up operating facility in a geographically separate area. Our clearing firm has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing frequently.

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 within the hour; and resumption time of within minutes, virtually continuous.

A. Our Firm’s Mission Critical Systems

1. Order Taking

Currently, our firm receives orders from customers via telephone and in-person visits by the customer. During an SBD, either internal or external, we will continue to take orders through any of these 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 they have to send their orders to us. Customers will be informed of alternatives by email, website postings, and regular mail (if time permits). If necessary, we will advise our customers to place orders directly with our clearing firm at the Clearing Liaison Desk: 800-778-6257.

2. Order Entry

Currently, our firm enters orders by electronically entering them directly on our clearing brokers system (eCustody internet based system) and sending them to our clearing firm electronically through the same system. Alternatively, we place customer orders by calling our clearing broker’s trading desk directly. We have contacted our clearing broker and were told that, under its BCP, we can expect continual service.

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 email, phone, and internet. 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.

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.

 

X. Alternate Communications Between the Firm and Customers, Employees, and Regulators

A. Customers

We now communicate with our customers using the telephone, e-mail, our Web site, social media, fax, U.S. mail, and 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.

B. Employees

We now communicate with our employees by 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.
The person to invoke use of the call tree is: Bruce A. Lefavi. See Attachment C, for the firm’s call tree.

Rule: FINRA 4370.

C. Regulators

We are currently members of the following SROs: FINRA. 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.

 

XI. 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. Our major suppliers are: Client Database Smart Office, EZ-Data, 918 East Green Street, Pasadena, California 91106, (626) 585-3515. Internet Service, Windstream – PAETEC, 2855 E Cottonwood Pkwy, Salt Lake City, UT, 84121; phone: 1-866-445-5882.

B. Banks

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. The bank maintaining our operating account is: Chase Bank, Foothill Village Branch, 1440 S. Foothill Dr. Ste 100, Salt Lake City, UT 84108, (801) 481-5821 (Contact Dane Jensen). Our Proprietary Account of Introducing Brokers/Dealers (PAIB account) is held by our clearing firm, INTL FCStone, Inc., 813 Shades Creek Parkway, Suite 100B, Birmingham AL 35209, 800-778-6257.

C. Counter-Parties

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.

XII. Regulatory Reporting

Our firm is subject to regulation by: SEC, FINRA, Utah State Securities Department. 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. SEC: 801-524-5796, e-mail: saltlake@sec.gov. FINRA: 301-590-6500. Utah State Securities Dept: 801-530-6600.

 

XIII. Disclosure of Business Continuity Plan

We provide in writing a BCP disclosure statement to customers at account opening. We also mail it to customers upon request, and send an offer letter to all clients annually.

 

XIV. Updates and Annual Review

Our firm will update 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 BCP annually, during our annual compliance meeting, to modify it for any changes in our operations, structure, business, or location or those of our clearing firm.

 

XV. Senior Manager Approval

I have approved this Business Continuity Plan as reasonably designed to enable our firm to meet its obligations to customers in the event of an SBD.

Lefavi Signature

Date: 1-9-17


ATTACHMENT A

INTL FCStone Financial Inc. Business Continuity Plan

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.

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.

Emergency Contact Persons

In the event that the firm experiences a SBD, senior management will call for the implementation of our BCP. During times of a SBD, our firm’s two emergency contact persons are: Brian Sephton Office: 407-741-5309, brian.sephton@intlfcstone.com; Mark Paverman Office: 212-379-5520 Cell: 917-855-4581; mark.paverman@intlfcstone.com.

Our Clearing Firms

Merrill Lynch, Pierce, Fenner & Smith Incorporated
(Broadcort Division)
101 Hudson Street
Jersey City, NJ 07302
201-557-4437
www.broadcort.com
Contact Person:
Anthony Maranzano
+1 (201) 557-3852
anthony_maranzano@ml.com

Pershing, LLC
One Pershing Plaza
Jersey City, NJ 07399
+1 (201) 413-4200
www.pershing.com
Contact Person:
Michael Pagliaro
+1 (312) 249-4885
mpagliaro@pershing.com

ATTACHMENT B

BRUCE A. LEFAVI SECURITIES, INC. – BUSINESS CONTINUITY PLAN (“BCP”) – DISCLOSURE FORM

Bruce A. Lefavi Securities, Inc. (“BLS”) is required to establish and maintain a BCP and update on an annual basis. The following are some of the key elements:

1. Books and records back-up and recovery – BLS information technology department has a standing procedure of full back up of operating data daily that is cycled offsite each week.

2. Identification of all mission critical systems and back-up for such systems – BLS has identified all mission critical systems and through the use of an alternate site with remote connectivity to our computer systems BLS is prepared to provide either uninterrupted or minimally interrupted service for its operations.

3. Alternative communications between customers and the firm: In the event that clients of BLS are unable to contact our company via phone due to a severe business disruption, BLS will post all available alternative phone numbers to the website: www.lefavi.com. In addition, clients of BLS may always contact the custodian of their funds directly for any matter, including obtaining account information, placing trades and accessing their funds. The contact information can be found on the account statement from the specific custodian firm. For any accounts held by INTL FCStone, you may contact them directly at the Clearing Liaison Desk: 800-778-6257. In the event that a disaster of such magnitude mandates the discontinuance of operations, BLS would perform an orderly discontinuance of business under its present BCP, and properly notify regulatory authorities including Securities Investor Protection Corporation (visit www.sipc.org). Executive Officers of BLS would coordinate this procedure. Clients of BLS would have access to their account funds by methods described above. Subsequent to a declaration of discontinuance of business operations clients could effect a transfer of account assets to another financial firm.

4. Alternate physical location of employees – BLS through its BCP has arranged for an alternate location for the conduct of the operations in the event of a business interruption. In addition, BLS has established as part of its BCP a calling tree utilizing either land line, internet or cell phone capabilities between and among all of its personnel. If the business interruption is severe enough to affect our office or business district for longer then a business day, we will continue to do business through our alternate site. If the disruption is city-wide or larger, we will resume business as soon as we are reasonably able and may invoke a more remote alternative site. However, clients in the meantime should have continuous and immediate access to their funds as outlined in section 3 above.

In summary, BLS through the use of its BCP policy outlined above anticipates a virtual continuous access by customers to information regarding their accounts including positions, order entry and removal of funds.

ATTACHMENT C

CALL TREE

The person to invoke use of the call tree is: Bruce A. Lefavi

 

CallerCall Recipients
Bruce A. LefaviDeserae Hulce, Sherrie Bakelar, Chris Light
Sherrie BakelarSam Fowers, Cathy Ramos, Christian Mogren
Chris LightJohn Jaicks, JD Slatter, Stuart Enterline, Trevor Knudtson, Zachary Ertel