Business Continuity Plan
(Effective December 2016) The purpose of this Business Continuity Plan (BCP) is to provide information to clients and other interested parties regarding Blakeslee & Blakeslee, Inc. (the firm) and the steps we will take in the event of a disruption to our business, either internally or externally. For questions about this plan, please contact Kara Woodruff at 805/543-4366.
I. EMERGENCY CONTACT PERSONS
In the event of emergency, please contact the following firm principals at either the business phone 805/543-4366 or via the contact information below:
Sam Blakeslee - 805-234-7313, firstname.lastname@example.org
Kara Woodruff - 805-440-6650, email@example.com, firstname.lastname@example.org
Deirdre Torres - 805-235-4857, email@example.com
II. Firm BCP Policy/Objectives
The objective of the firm’s BCP is to respond quickly and effectively to a significant business disruption (SBD) by safeguarding employee’s lives, firm property, and the financial and other resources of clients. In the event of an SBD, we will make a prompt financial and operational assessment, quickly recover and/or resume operations as needed, and protect the firm books, records, files, and the like. We will ensure the continuity of our operations and enable clients to transact business. In the event that we determine we are unable to continue our business operations, we will assure clients prompt access to their funds and securities.
Our BCP contemplates two kinds of SBD’s: internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire or flooding in an office. 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 clearing firm, Wedbush Securities, Inc.
Sam Blakeslee and/or Kara Woodruff are responsible for approving and executing the BCP and for conducting the required annual review. The firm maintains its BCP in its manual of written supervisorial procedures and copies are available for inspection. A copy is also provided to FINRA. An electronic copy of our plan is located on the firm’s primary server, as well as the backup server located offsite, and on our website at www.blakeslee-blakeslee.com.
III. Firm Business Description
Blakeslee & Blakeslee, Inc., conducts business primarily in mutual funds, equities, fixed income securities, annuities, and life insurance products. 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, or any other funds or securities. We accept and enter orders and transactions are sent to our clearing firm or to investment or insurance companies directly via “application way.” These entities execute, clear, and settle our orders. Our clearing firm also maintains our customers’ accounts, can grant customers access to them, and delivers funds and securities. Our firm services primarily retail customers and we do not engage in private placements.
Our clearing firm is Wedbush Securities, 1000 Wilshire Blvd., 7th Floor, Los Angeles CA 90017, 213-688-8000, www.wedbush.com.
IV. Office Locations
- San Luis Obispo/Corporate Office 1101 Marsh Street
San Luis Obispo, CA 93401
- Paso Robles Branch Office 544 12th Street
Paso Robles, CA 93446
- Santa Maria/Orcutt Office
1157 E. Clark Avenue, Suite H
Santa Maria, CA 93455
V. Alternative Physical Location(s)
In the event of an SBD, we will move our staff from the affected office(s) to the closest of our unaffected office locations. If none of our other office locations is available to receive those staff, we will move them to a temporary location in San Luis Obispo within one mile of our corporate office, to the extent possible. An alternative location will be established and posted on our website if required by the circumstances.
VI. Customers’ Access to Funds and Securities
As noted above, our firm does not maintain custody of customers’ funds or securities; rather, those are maintained with our clearing firm or directly with the applicable investment or insurance company. 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 investment /insurance company, on their behalf. If web access is available, we will post a message noting that our customers may access their funds and/or securities by contacting their registered representative or any of the firm principals listed at the top of this BCP.
If any regulatory or other applicable agency 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 the SIPC and the trustee by providing our books and records identifying customer accounts subject to SIPC regulation. The firm has maintained a minimum capital that exceeds our regulatory requirement.
VII. Data Back-Up and Recovery
Our firm maintains its primary hard copy of books, records, files, including electronic records, at our corporate office, with backup materials at offsite locations. The firm principals are responsible for the maintenance of these books and records. All critical/electronic files are backed up at least daily and submitted to an offsite, secure location.
In the event of an internal or external SBD that causes the loss of our paper records, we will physically recover them from our electronic back-up systems or from our clearing broker, Wedbush Securities
VIII. Financial and Operational Assessments
Operational Risk. In the event of an SBD, we will immediately identify the means that 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, voicemail, and email correspondence.
Financial and Credit Risk. In the event of an SBD, we will also 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, 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 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, 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 direct internet site access to the Wedbush database. The internet site database allows our firm to processes securities transactions, verify client account information, and allow for customer account access and delivery of funds and securities.
We have a primary responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions of order taking. Our clearing firm provides the 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 the 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. In the event our clearing firm executes a plan, it represents that it will notify us of such execution and provides 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 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 with the capability to conduct the same volume of business as its primary site. Our clearing firm has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing every six (6) months.
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; resumptions refer 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 4 hours maximum and resumption time of same business day.
Our Firm’s Mission Critical Systems
- Order Taking
Currently, our firm receives orders from customers via telephone or in person visits by 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 telephone. If necessary we will advise our customer to place orders directly with our clearing firm at Wedbush Securities.
- Order Entry
Currently, our firm enters orders by recording them on paper and electronically and sending them to our clearing firm electronically or telephonically. We have contacted Wedbush Securities (our clearing firm) and were told that, under its BCP, we can expect services with in 1 hour.
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 telephone correspondence. 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.
- Order Execution
We currently execute orders by calling Wedbush Securities directly by telephone. In the event of an internal SBD, we would call from an alternative location. In the event of an external SBD, we would call from an alternative location.
X. Alternative Communications Between the Firm and Customers, Employees, and Regulators
We now communicate with our customers using the telephone, fax, U.S. mail, email, and in person visits at our firm or at the other 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 (oral or written) 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 now communicate with our employees using the telephone 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 oral 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 any may reach each other in person.
Caller Call Recipients Kara Woodruff
David Cryden, Sam Blakeslee, Craig Darnell,
Stephen Hiltscher, Ashaki Smith, Michael Perlman
Steve Armas, Chris Coates
Judy Hogue, Jessica Roberts, Jane Russell, Tricee Wright
Jeb Brown, Bruce Williams
We are currently members of the following SROs: FINRA. We communicate with our regulators using the telephone, e-mail, fax and U.S. mail. 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 either 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
We have contacted our critical business constituents (business 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:
1000 Wilshire Blvd.
Los Angeles, CA 90071
1998 Santa Barbara Ave #100
San Luis Obispo, CA 93401
250 Bridge Street
San Luis Obispo, CA 93401
142-198 E Main Street
Santa Maria, CA 93444
3220 S. Higuera Street #325
San Luis Obispo, CA 93401
545 12th. Street
Paso Robles, CA 93446
21362 Vista Estate Drive
Lake Forest, CA 92630
We have contacted our critical 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: Heritage Oaks Bank 1144 Morro Street, San Luis Obispo, CA 93401 (805) 549-7200. If our banks and other lenders are unable to provide the financing, we will seek alternative financing immediately from Heritage Oaks Bank 545 12th Street, Paso Robles, CA 93446 (805) 369-5200.
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 FINRA, SEC and the Department of Corporations. 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.
XIII. Disclosure of Business Continuity Plan
We disclose in writing a summary of our BCP to customers at account opening (for existing clients will disclose in annual mailing). We also mail it to customers upon request. Our summary addresses the possibility of a future SBD and how we plan to respond to events of varying scope. In addressing the event of varying scope, our summary (1) provides specific scenarios of varying severity (e.g., a firm-only business disruption, a disruption to a single building, a disruption to a business district, a city-wide business disruption, and a regional disruption); (2) states whether we plan to continue business during that scenario and, if so, our planned recover time; and (3) provides general information on our intended response. Our summary discloses the existence of back-up facilities and arrangements.
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, 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.