Business Continuity Plan
Business Continuity Plan for Vestech Securities, Inc. (VSI) and Vestech Asset Management, Inc. (VAM)
Updated September 07, 2021
I. Emergency Contact Persons
Our firm’s two emergency contact persons are:
John Huang, President
Phone: 314.828.2111 Ext 888
Email: jhuang@e-vestech.com
Marco Ramirez, Chief Compliance Officer / Counsel
Phone: 314.828.2111 Ext 501
Cell: 314.498.5005
Fax: 314.261.9188
Email: mramirez@e-vestech.com
The firm will provide FINRA with the contact information for the two emergency contact persons: (1) name; (2) title; (3) mailing address; (4) email address; (5) telephone number; and (6) facsimile number through the FINRA Contact System (FCS). John Huang will promptly notify FINRA of any change in this information through FCS (but no later than 30 days following the change) and will review, and if necessary update, this information within 17 business days after the end of each calendar year.
Rule: FINRA Rule 4370(f); FINRA Rule 4517.
II. 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.
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 and custodian firms.
B. Approval and Execution Authority
John Huang President, a registered principal, is responsible for approving the plan and for conducting the required annual review. Marco Ramirez, CCO/Counsel and Paul Knese, AMLO / DSO, have the authority to execute this BCP.
C. Plan Location and Access
Our 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 Sharefile by Citrix in the Compliance WSP Folder.
Rule: FINRA Rule 4370(b), (d) and (e).
III. Business Description
VSI conducts business in equity, fixed income, and derivative securities. VSI 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. 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 retail and institutional customers. While we introduce private placement offerings to our customers, we do not engage in underwriting of such offerings.
Our clearing firm is StoneX Correspondent Clearing and its contact information are:
Address: 2 Perimeter Park South, Suite 100W
Bermingham, AL 35243
Phone: 800.264.4863
Website: https://stonex.com
Our contact person at that clearing firm is Don Exner and can be reached by either of following:
Address: 2600 N. Military Trail Suite 350
Boca Raton, FL 33431
Phone: 800.264.4863
Email: DON.EXNER@StoneX.com
Our clearing firm has also given us the following alternative contact in the event it cannot be reached:
Name: Jennifer Morello
Address: 2600 N. Military Trail Suite 350
Boca Raton, FL 33431
Phone: 561.544.7872
Email: Jennifer.Morello@intlfcstone.com
Website: https://stonex.com
VAM is a registered investment advisory firm and conducts its business as an investment advisor to individuals, companies, and small retirement plans. Services involve developing and implementing investment plans for clients as an advisor. It does not act as a broker. VAM does not hold client funds or securities. All client assets are held at a custodian firm or mutual fund company. With the exception of several mutual fund accounts, all client assets are currently custodied with StoneX, Equity Trust Solutions, and Interactive Brokers (IBKR).
The contact information to the custodian firms are below:
Custodian: StoneX, Inc.
Address: 2 Perimeter Park South, Suite 100W
Bermingham, AL 35243
Phone: 800.264.4863
Website: https://stonex.com
Custodian: Equity Trust Company
Address: 1 Equity Way
Westlake, OH 44145
Phone: 855.233.4382
Website: https://www.trustetc.com
Custodian: Interactive Brokers
Address: One Pickwick Plaza
Greenwich, CT 06830
Phone: 877.442.2757
IV. Office Locations
Our firm has offices located in:
A. St. Louis, MO (Home Office) | B. Eureka, MO (Registered Office) |
C. Erie, PA (Registered Office) | D. Houston, TX (Registered Office) |
E. Las Vegas, NV (Registered Office) |
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A. St. Louis, MO (Home Office)
Our St. Louis Office is located at 11477 Olde Cabin Rd. Suite 310, St. Louis, MO 63141. Its main telephone number is 314.828.2111. Our employees may travel to that office by means of foot, car, bus, etc. We engage in order taking and entry at this location.
B. Eureka, MO
Our Eureka Office is located at 125 South Central Ave., Eureka, MO 63128. Its main telephone number is 314.919.2024. Our registered rep and staff may travel to that office by means of foot, car, bus, etc. The office engages in order taking at this location.
C. Erie, PA
Our Erie Office is located at 5942 Spires Dr., Erie, PA 16509. Its main telephone number is 814.868.8570. Our registered rep and staff may travel to that office by means of foot, car, bus, etc. The office engages in order taking and entry at this location.
D. Houston, TX
Our Houston Office is located at 12 Greenway Plaza Suite 1100, Houston, TX 77046. Its main telephone number is 832.339.2937. Our registered rep and staff may travel to that office by means of foot, car, bus, etc. The office engages in order taking and entry at this location.
E. Las Vegas, NV
Our Eureka Office is located at 8275 S. Eastern Ave. Suite 200-454, Las Vegas, NV 89123. Its main telephone number is 702.929.6700. Our registered rep and staff may travel to that office by means of foot, car, bus, etc. The office engages in order taking and entry at this location.
V. Alternative Physical Location(s) of Employees
In the event of an SBD, we will move our staff from affected office(s) to the closest of our unaffected office location(s). If none of our other office locations is available to receive those staff, we will setup offices in their homes and route calls through our Home Office main number at 314.828.2111. The Home Office telephone number will automatically redirect calls to their contact numbers at their homes or to their cell phones.
Rule: FINRA Rule 4370(c)(6).
VI. Customers’ Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities. All client assets are held at either the clearing firm, or other custodian firms referenced in section III or mutual fund companies. 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 or custodian firms on their behalf, and if our Web access is available, our firm will post on our website that customers may access their funds and securities by contacting the clearing or the custodian firms as referenced in Section III above. 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.
Rules: FINRA Rule 4370(a); Securities Exchange Act Rule 15c3-1; see also 15 U.S.C. § 78eee.
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 11477 Olde Cabin Road, Suite 310, Saint Louis, MO, 63141. Designated principals of the firm are responsible for maintenance of these books and records in their respective areas of responsibilities. The primary contact for books and records is John Huang and can be reached at314.828.2111 ext. 888 Our firm maintains the following document types and forms that are not transmitted to our clearing firm and custodian firms. The document types include but not limited to:
- CUSTOMER RECORDS: client identification documents, disclosure documents, customer acknowledgment and agreements.
- AML RECORDS: client identification documents, FINCEN search records, OFAC check records, etc.
- COMPLIANCE AND SUPERVISORY RECORDS
- PERSONNEL RECORDS
- FINANCIAL AND OPERATIONS RECORDS
- CORPORATE RECORDS
- CORRESPONDENCE RECORDS
Our firm maintains its primary books and records electronically and retains hard-copy records relating to financials and operations as back-up at the Home Office. The designated principals are responsible for maintenance of books and records in their respective areas of responsibilities. John Huang is the Primary contact for books and records and can be reached at (314) 828 – 2111 ext. 888. Our firm scans and stores documents and records daily in real-time and such records are synchronized in real-time to a third party managed electronic storage site.
The third-party vendor firm backs up our electronic records daily by creating and mirroring copies at multiple data centers in separate geographical locations. Additionally, a dedicated computer synchronizing in real-time to the third-party vendor is served as an off-site back-up. That computer is located at John Huang’s place of residence.
In the event of an internal or external SBD that causes the loss of our paper or electronic records, we will recover them from our third-party vendor. If our primary site is inoperable, we will continue operations from our back-up site or an alternate location. For the loss of electronic or physical records, we will recover data from our third party vendor or, if our vendor is inoperable, and continue operations from our back-up site or an alternate location using the synchronized data from the off-site back-up computer.
Rule: FINRA Rule 4370(c)(1).
VIII. Financial and Operational Assessments
Our firm will monitor its operational, financial, and credit risk on an on-going basis by reviewing its financial accounts in places where it holds accounts. If a SBD should occur, the firm will take appropriate steps to make sure its access to its accounts are not affected.
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 website, telephone voice mail, secure email, 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).
Rules: FINRA Rules 4370(c)(3),(c)(4), (c)(5), (c)(7), (c)(9 & (g)(2)).
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 and custodian firms, 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 notifying our customers if they would be directly impacted by any changes the firm may have to implement.
Rules: FINRA Rules 4370(c)(3), (c)(8) & (g)(2).
IX. Mission Critical Systems
Our firm’s “mission critical systems” are those that ensure prompt and accurate to client accounts and records and processing of securities transactions. These systems include the systems of our clearing and custodian firms who provide custody services and processing of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities.
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 and custodian firms provides, through contract, the execution, comparison, allocation, clearance and settlement of securities transactions, maintenance of customer accounts, access to customer accounts and the delivery of funds and securities.
Our clearing and custodian firms contract provide that it will maintain a business continuity plan and the capacity to execute that plan. The clearing and custodian firms represent that it will advise us of any material changes to its plan that might affect our ability to maintain our business. In the event our clearing or a custodian 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 either of the firms 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 and custodian firms represents that it will assist us in seeking services from an alternative source.
Our clearing and custodian firms represent that it backs up our records at a remote site. Our clearing and custodian firms 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 clearing and custodian firms 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.
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 and custodian firms have the following SBD recovery time and resumption objectives: recovery time period of a few hours and resumption time of within the same business day.
Marco Ramirez will periodically review our clearing and custodian firms’ capabilities to perform the mission critical functions the clearing firms has contracted to perform for our firm.
A. Our Firm’s Mission Critical Systems
1. Order Taking
Currently, our firm receives orders from customers via telephone or walk in. 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 a method the firm deems appropriate at that time. If necessary, we will advise our customers to place orders directly with our clearing or custodian firms.
2. Order Entry
Currently, our firm enters orders by recording them electronically and sending them to our clearing or custodian firms electronically or telephonically. Alternatively, we place customer orders through the systems of our clearing and custodian firms who provide custody services and processing of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities. We have contacted our clearing firms and were told that, under its BCP, we can expect services within the same business day.
In the event of an internal SBD, we will enter and send records to our clearing firms by the fastest alternative means available, which include via telephone or electronic transmissions. In the event of an external SBD, we will maintain the order in electronic or paper format, and deliver the order to the clearing firms 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 and Custodian Firms
Our firm relies, by contract, on our clearing and custodian firms to provide order execution, order comparison, order allocation, customer account maintenance and/or access and delivery of funds and securities.
Rules: FINRA Rules 3510(c)(2) & (g)(1).
X. Alternate Communications Between the Firm and Customers, Employees, and Regulators
- Customers
We now communicate with our customers using the telephone, email, our website, fax, U.S. mail and in-person visits at our firm or another 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 email 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.
Rule: FINRA Rule 4370(c)(4).
- Employees
We now communicate with our employees using telephone, email, and in person, etc. 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, noted below, who live near each other and may reach each other in person:
The person to invoke use of the call tree is: John Huang
Caller | Call Recipients |
John Huang | Marco Ramirez, Paul Knese |
Marco Ramirez | Any other employee |
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Rule: FINRA Rule 4370(c)(5).
- Regulators
We are currently members of the following self-regulatory organizations (SROs), and are also regulated by: FINRA, SEC, MSRB, and Securities Commission of the registering States. We communicate with our regulators using telephone, email, fax, U.S. mail, in person, etc. 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.
Rule: FINRA Rule 4370(c)(9).
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.
Rules: FINRA Rule 4370(c)(7).
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: U.S. Bank at 1795 Clarkson Rd, Chesterfield, MO 63017. The bank maintaining our Proprietary Account of Introducing Brokers/Dealers (PAIB account) is:
StoneX Correspondent Clearing
2 Perimeter Park South, Suite 100W
Bermingham, AL 35243
Contact: Don Exner
Phone: 800.264.4863
Email: don.exner@stonex.com
If our banks and other lenders are unable to provide the financing, we will seek alternative financing immediately from any other available bank source.
Rules: FINRA Rule 4370(c)(7).
C. Counter-Parties
We have contacted our critical counterparties, 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 and custodian firms or contact those counterparties directly to make alternative arrangements to complete those transactions as soon as possible.
Rules: FINRA Rule 4370(c)(7).
XII. Regulatory Reporting
Our firm is subject to regulation by: FINRA, SEC, MSRB. We now file reports with our regulators using paper copies in the U.S. mail, and electronically using fax, email 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.
Rule: FINRA Rule 4370(c)(8).
XIII. Disclosure of Business Continuity Plan
Attached is our written BCP disclosure statement we provide customers at account opening. We also post the disclosure statement on our website and mail it to customers upon request.
Rule: FINRA Rule 4370(e).
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 and custodian firms. In addition, our firm will review this BCP annually, on to modify it for any changes in our operations, structure, business or location or those of our clearing and custodian firms.
Rule: FINRA Rule 4370(b).
XV. Senior Manager Approval
Approve the firm’s BCP by signing below.
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.
Rule: FINRA Rule 4370(d).
Name: John Huang
Title: President
Date: 9/8/2021