D & D Securities Inc.
Business Continuity Plan (“BCP”)
I. Governance and Funding
Our firm’s BCP Officer is:
Joe Pavao, President & Chief Executive Officer
Telephone:
(B) 416.369.6925
(M) 416.999.3730
Email:
II. Firm Policy
Our firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and firm property, by 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 Disruption (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 fire in our building.
External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, 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 carrying broker, Penson Financial Services Canada.
B. Staff Awareness
We are ensuring that all personnel are continually aware of their responsibilities and know how to remain in contact and what to do in the event of a crisis. The BCP Officer has responsibility for the staff awareness plan.
Our firm will maintain copies of our BCP plan and the annual reviews, and the changes that have been made to it for inspection. An electronic copy is located on a disk and held in an offsite safety box.
III. Business Description
Our firm conducts business in equity, fixed income, and derivatives. 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. The orders can be executed either with our Carrying Broker or on D & D’s trading terminals. If the orders are executed on D & D’s trading terminals, the executed transactions are forwarded electronically to our Carrying Broker for processing to our client and inventory accounts. All transactions are sent to our carrying broker (includes transactions executed directly by the Carrying Broker), who compares them, clears and settles them. Our Carrying Broker also maintains our customers’ accounts, can grant customers access to them, and deliver funds and securities. Our firm services retail, institutional customers and has security inventory accounts.
Our Carrying Broker is Penson Financial Services Canada, 330 Bay Street, Suite 711, Toronto, Ontario, M5H 2S8. Telephone number is 416-943-1547, Terry Bourne, CEO. Email is
.
IV. Office Locations
Our firm has only the Head Office location.
- Head Office Location
Our Head Office is located at 150 York Street, Suite 1714, Toronto, Ontario, M5H 3S5. The main telephone number is 416-363-0201. We engage in order taking and entry at this location.
V. Alternative Physical Location(s) of Employees
In the event of an SDB, our staff will be notified by the BCP Officer (and his/her appointed team) of the SBD and that they will work from home until further notification.
VI. Customer Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities, which are maintained by our carrying broker, Penson Financial Services Canada. In the event of an internal or external SDB, if telephone service is available, our registered persons will take customer orders or instructions and contact our carrying broker on their behalf.
If the main telephone service is not available, an emergency telephone number is available on our web page. The emergency number will give an automated message to any caller that employees of the firm can be contacted at an alternative telephone number. The internet address for D & D is www.dndsecurities.ca. The emergency telephone number is 416-999-3730.
The firm will make this information available to customers through its disclosure policy which is disclosed on our client monthly statements.
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 150 York Street, Suite 1714, Toronto, Ontario, M5H 3S5. The CFO is responsible for the maintenance of these books and records. Our firm maintains the following types and forms that are not transmitted to our carrying broker:
- Account Opening Documents
- Trading Blotters
- Trade Tickets
- Monthly Statements and Client Contracts
- Registration Documentation
- Accounting Records (General Ledger, Account Payable, Payroll)
Our firm maintains its backup hard copy books and records at:
- Account Opening Documents are on a flash drive that is kept in an offsite safety deposit box.
- Trading blotters and trade tickets are maintained in hard copy at Brambles. Electronic copies of Trading blotters are maintained by Frontline.
- Monthly Statements and Client Contracts are maintained on CD-ROM in an offsite safety deposit box.
- Registration Documentation is maintained on a flash drive that is kept in an offsite safety deposit box.
- General Ledger records are maintained in hard copy at Brambles and electronically (daily) by Frontline Technologies Inc.
- Accounts payable and payroll records are maintained in hard copy at Brambles and electronically by Frontline Technologies Inc.
The firm’s records that are held by Frontline are automatically backed up daily and a message notifies the firm that the back-up has been successful.
General Ledger records are backed up daily.
Account Opening Documentation is backed up monthly.
Registration Documentation is backed up when changes are made.
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 an alternative 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 an alternative location.
VIII. Financial and Operational Assessments
A. Operational Risk
In the event of an SDB, 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 SDB will determine the means of alternative communication, the communication options we will employ will include telephone voice mail, secure e-mail and cell phones. 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 the IDA to apprise them of our financial status. If we determine that we may be unable to meet our obligations to our counter-parties or otherwise continue to fund our operations, we will request additional financing to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with the IDA and immediately take appropriate steps, including reducing our inventory positions.
IX. Mission Critical Systems
Our firm’s “mission critical systems” are those that ensure prompt and accurate processing of securities transactions, including order taking, order entry, execution, 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:
We have prime responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions of order taking, entry and execution (which can also be performed by Penson). Our carrying broker provides the execution (if required), clearance and settlement of securities transactions, the maintenance of customer
Accounts, access to customer accounts, and the delivery of funds and securities.
Our carrying broker represents that it backs up at a remote site. Our carrying broker represents 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. Our carrying broker has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing.
Recovery-time objectives provide concrete goals to plan 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 capability to accept and process new transactions and payments after a wide-scale disruption. Our carrying broker has the following SBD recovery time and resumption objectives: recovery time periods: Click here for bulletin BCP Bylaw 17.19 dated September 1, 2007.
A. Our Firm’s Mission Critical Systems
I. Order Taking
Currently, our firm receives orders from customers via the telephone and in person visits by the customer.
During an SBD, either internal or external, we will continue to take orders via the telephone. We will inform our
customers what alternatives they have to inform us of their orders. Customers will be informed of the alternatives
by hearing a message when they contact us on our emergency telephone number, available on our web site. The customers
will be directed to an alternative telephone number to place their orders or for any account information they require.
II. Order Entry
Currently, our firm enters orders by recording them on paper and electronically sending them to:
a. Canadian trades are entered on exchanges electronically.
b. US trades are entered electronically to our carrying broker.
In the event of an internal SBD, we would send all orders to our carrying broker by the fastest means available,
which include telephone or e-mail.
In the event of an external SBD, we will maintain the order in electronic or paper format, and deliver the order
to our carrying broker by the fastest alternative means available when it resumes operations. In addition, during
an internal SBD, we may need to refer our customers to deal directly with our carrying broker for order entry.
III. Order Execution
We currently execute Canadian trades through IRESS and/or Belzberg Trader
workstations. The IRESS/Belzberg environment provides traders with the ability to access their workstations from an offsite
location as long as they can access the internet.
In the event of an internal SBD, we will deliver the orders to our carrying broker for execution either by telephone,
cellular phone or e-mail depending on what system has failed.
In the event of an external SBD that prevents our staff from accessing our premises, sales staff will communicate with
their clients by any means that is available to them. Any security transactions their clients wish to transact will be
filtered to a designated supervisory employee of the firm. That individual will relay the transaction either to a
designated offsite trader or our carrying broker.
B. Mission Critical Systems Provided by our Carrying Broker
Our firm relies, by contract, on our carrying broker to provide order execution (US , listed and unlisted, options, foreign), order comparison, order allocation, and the maintenance of customer accounts, delivery of fund (funding of customer and inventory accounts) and securities, and access to customer accounts.
X. Communication With Customers, Employees, and Regulators
We now communicate with our customers using the telephone, e-mail, fax, mail, and in person visits at our firm. In the event of an SBD, we will assess whichever means of communication that 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 the other 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 mail.
We have informed our customers to contact our emergency telephone number (available on our web site and monthly statements) in case of a significant business disruption at our firm and the possibility that customers were unable to reach us using the main telephone numbers. The emergency telephone number will have a message with instructions for the clients.
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, cell, and office numbers. We have identified persons, noted below, who live near each other and may reach each other in person:
The person to invoke the use of the call tree is: Joe Pavao
(Note: This table has been omitted from the Web version of this document to protect the privacy of our employees)
D. Regulators
We are currently members of the Investment Industry Regulatory Organization of Canada. We communicate with our regulators using the telephone, e-mail, fax, 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 closet in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.
XI. External Dependencies
We have contacted our critical service providers (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:
Carrying Broker – Penson Financial Services Canada – see contact list attached
Trading Terminals – maintained by Iress Market Tech – 416-620-1614 and
Belzberg Technologies – 416-360-3000
E-mail and internet access is provided by Frontline Technologies Inc.
Telephone system is maintained by Smart IP
Our carrying broker funds our client accounts. In addition the carrying broker holds and funds our inventories (including Treasury Bills), and holds the majority of our cash. The firm basically operates an impress bank account on the firm’s general ledger for the payment of salaries and expenses. The impress bank account is funded from the firm’s cash held by our carrying broker.
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 carrying broker 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 IDA regulation. We now file reports with the IDA using internet/SIRFF, paper copies in the mail and electronically using fax or e-mail. In the event of an SBD, we will check with the IDA and any 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.
Our principal regulator contact at the Investment Industry Regulatory Organization of Canada (“IIROC”), is Mr. Ben Yee, Manager, Financial Compliance, and he can be reached at 416.943.5872 (Telephone), 416.364.4878 (Facsimile), or at (E-mail).
XIII. 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 carrying broker. In addition, our firm will review this BCP annually, on August 1, 2008, to modify it for any changes in our operations, structure, business, or location or those of our carrying broker.
In addition to the annual review, the plan will also be tested annually at this time.
XIV. Testing of BCP
The BCP was distributed to all employees. Several calls were made to the emergency telephone number and the calling tree was initiated on a test basis. Calls were made to Penson’s trading departmentt. and credit departmentt. No major problems were encountered in the test. The test was conducted in August 2007.
XV. Senior Management 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.
Signed: Joe Pavao
Title: President & Chief Executive Officer
Date: October 1, 2007 |
