Pensionmark Securities, LLC Business Continuity Plan
I. Emergency Contact Persons
Pensionmark Securities, LLC’s two emergency contact persons are:
Office: (805) 456-6265
Cell Phone: (805) 218-4474
Firm E-Mail: firstname.lastname@example.org
Other E-Mail : email@example.com
Chief Compliance Officer
Office : (805) 456-6260
Cell Phone: (805) 403-0989
Firm E-Mail: firstname.lastname@example.org
Other E-Mail: email@example.com
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.
II. Firm Policy
Pensionmark Securities, LLC’s (“PSC” or the “Firm”) 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 of an SBD, this plan will be implemented to ensure business continuity.
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 heavily on other organizations and systems.
b. Approval and Execution Authority
Mr. Mike Woods, Chief Compliance Officer, is responsible for approving the plan and for conducting the required annual review. Messrs. Hammond and Woods have the authority to execute this BCP.
c. Plan Location and Access
The Firm will maintain copies of its BCP plan and the annual reviews, and the changes that have been made to it for inspection. An electronic copy of our plan is located on our server.
III. Business Description
Our firm conducts business in mutual funds, variable annuities, variable life and referral/commission sharing activities. Our firm conducts securities transactions directly with mutual fund and insurance companies; we do not perform any type of clearing function for itself or others. Furthermore, we do not hold customer funds or securities. All securities transactions are done via application/subscription basis with mutual fund and variable annuity/life insurance companies. All mutual fund, variable annuity and life insurance companies maintain our customers’ accounts, can grant customers access to them, and deliver funds and securities.
In the event that Pensionmark Securities, LLC ceases operations due to a significant business interruption, our clients may access their accounts by calling their respective mutual fund company, or variable annuity company.
IV. Office Locations
The Firm’s main office is located at 24 E. Cota Street, Suite 200, Santa Barbara, CA 93101. Our main telephone number is (805) 456-6260. Our employees may travel to that office by means of foot, car, or bus.
V. Alternative Physical Location(s) of Employees
In the event of an SBD, we will move our staff from the affected office to the closest of our unaffected office location(s). If none of our other office locations is available to receive those staff, we will move them to: 250 Bonnie Lane, Santa Barbara, CA 93108.
All other staff will utilize our cloud-based technology at the alternative location in the event of a long-term business disruption. Phone numbers will be forwarded to that location and all direct lines will be forwarded to the staff member’s mobile phone.
VI. Customers’ Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities. In the event of an internal or external SBD, if telephone service is available, our registered persons will be able to handle telephone calls from our customers. 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.
VII. Data Back-Up and Recovery (Hard Copy and Electronic)
Registered representatives that maintain books and records at the affected locations should make every effort to retrieve or back-up such records. If any such records were permanently destroyed, a list of the types of books and records required to be maintained pursuant to NASD Rule 4510 and SEA Rules 17a-3 and 17a-4 must be prepared. The list should include the time periods affected, but need not include records that can be recreated from an electronic database or that can be retrieved otherwise from a service bureau, back-up records storage facility, etc.
If you have damage to your records:
- Do not destroy the records until instructed it is ok to do so.
- Inventory the damaged records using the damaged records log in Attachment B of this plan.
Our firm maintains its primary hard copy books and records at the home office in Santa Barbara, CA.
Our branch maintains its primary electronic records at: www.netdocuments.com.
Mike Woods 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 Account Forms, regulatory records, client correspondence including Emails, applications for direct investment company and variable products.
Our branch maintains backup hard copy books and records at: N/A
Pensionmark Securities backs up electronic records at: NetDocuments
Responsible Party: Mike Woods
Backup Frequency: Daily
The document types and forms that are backed up are: Client Accounts and/or Records.
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 electronically recover data from our electronic storage at our main office location; or, if our primary site is inoperable, we will electronically recover data and continue operations from our back-up site or an alternate location.
VIII. 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 telephone, voice mail and secure 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 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.
IX. Mission Critical Systems
Our firm’s “mission critical systems” are those that ensure prompt and accurate processing of securities transactions which include
- Accounting software
- Internet Access
- Password lists
- Microsoft Office (including Word, Excel, Powerpoint & Access)
We have primary responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions.
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 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.
a. Our Firm’s Mission Critical Systems
i. Securities Transactions
Currently, our firm does not receive or accept orders from customers via the telephone, fax or mail. We only accept customer order via application way. During an SBD, either internal or external, we will continue to take orders via cell phone and internet communication and through any other 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 notices posted the firm’s website and/or recorded voice messages at the firm’s main office number. If necessary, we will advise our customers to place orders directly with the investment companies and insurance carriers. We may talk to our customers via telephone, e-mail or in personal visits with the customer. Clients should be able to reach us by telephone to facilitate any of their needs. Alternatively, clients will also have direct access to any other business relationships, including any private companies that such clients have done business with.
ii. Order Execution
Currently, our firm accepts customer orders application way, and may set up periodic investments by submitting them to the mutual fund company or insurance carrier. We have contacted our custodians and were told that, under their BCP, we can expect service via cellular telephone. In the event of an internal SBD, we will enter and send records to our custodians by the fastest alternative means available. In the event of an external SBD, we will maintain the order in paper format, and deliver the order to the appropriate custodian 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 custodians for order entry. Information will be promptly posted to our web site and/or recorded via voice message.
iii. Order Entry
Currently, our firm enters orders by recording them on paper and/or submitting them electronically to our custodians electronically or telephonically. We have contacted our custodians and were told that, under their BCP, we can expect service via cellular telephone. In the event of an internal SBD, we will enter and send records to our custodians by the fastest alternative means available. In the event of an external SBD, we will maintain the order in electronic or paper format, and deliver the order to the appropriate custodian 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 custodians for order entry. Information will be promptly posted to our web site and/or recorded via voice message.
X. Alternate Communications Between the Firm and Customers, Employees, and Regulators
We communicate with our customers using the telephone, e-mail, fax, U.S. mail, and in person visits at our firm or at the customer’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.
We 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. Senior management will contact each other and establish the means and responsibility of who will contact the financial advisors and support staff.
We are currently a member of FINRA and a fully registered broker-dealer with the SEC. In addition, we are registered with the State of California and other states. 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.
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:
Wells Fargo Bank, N.A.
420 Montgomery Street
San Francisco, CA 94101
If our banks and other lenders are unable to provide the financing, we will seek alternative financing immediately from other institutions as applicable.
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 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: Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). 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.
XIII. Disclosure of Business Continuity Plan
We provide in writing a BCP disclosure statement to customers at the time of a transaction. We also mail the disclosure statement to customers upon request.
XIV. Updates and Annual Review
The Firm will update this plan whenever we have a material change to our operations, structure or business location. In addition, the Firm will review this BCP annually to modify it for any changes in our operations, structure, business, or location.