I. Emergency Contact Persons
Our firm’s four emergency contact persons are Joshua Rogers (312) 203-4580, UnBo (Bob) Chung (312) 550-0117, David Hock (503) 709-7943 and Micah Rayner (321) 482-1505. These names will be updated in the event of a material change, and our Executive Representative will review them on an ongoing basis within 30 days.
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 firm.
B. Approval and Execution Authority
Joshua rogers, a registered principal and President of the firm, is responsible for approving the plan and for conducting the annual review. He may delegate the task of conducting review to UnBo (Bob) Chung, Chief Compliance Officer. Joshua Rogers has 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 the Nitix Server.
III. Business Description
Our firm is approved to conduct a general, municipal, and options business on a fully disclosed basis, as well as sell mutual funds, variable products, private placements, and REITs. However, at the present time, the majority of new business is derived from products sold on a subscription or application basis. As an introducing firm, we do not perform any type of clearing function for ourselves or other Broker/ Dealers. Furthermore, we do not hold customer funds or securities. We accept and enter orders through the clearing firm or mail applications and subscriptions. Our clearing firms execute all of our client orders, compare them, allocate them, report them, and clear and settle them. They also maintain our customers’ accounts, can grant customers access to them, and deliver funds and securities. Our firm currently services only retail customers.
We have one fully disclosed clearing arrangement: Pershing via a third-party arrangement with AWM, www.aretewealth.com via the web or (312) 940-3684 via telephone.
IV. Office Locations
A. Main Office Location #1 – Nashville, TN
Our main office OSJ is located at 2 International Plaza, Ste 301, Nashville, TN 37217.
The telephone numbers are (888) 690-3580 or (615) 690-3580.
B. Office Location #2 – Chicago, IL
Office located at 1115 W. Fulton Market, 3rd Floor, Chicago, IL 60607.
Its main telephone is (312) 940-3684.
C. Non-OSJ Branch Office Locations – See separate List
D. Non-Registered Locations – See separate List (N/A at this time)
V. Alternative Physical Location(s) of Employees
In the event of an SBD at the main office OSJ that is anticipated to last more than two business days, we would move our compliance and operations staff from affected offices to the Chicago, IL office. Otherwise, the staff would work from their homes.
VI. Customers’ Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities, which are maintained at Pershing LLC through AWM. 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 on their behalf, and if our Web access is available, our firm will post on our Web site that customers may access their funds and securities by contacting AWM at: www.aretewealth.com via the web or (312) 940-3684 via telephone.
VII. Data Back-Up and Recovery (Hard Copy and Electronic)
Our firm maintains all books and records in hard copy form except for electronic mail which is maintained by Smarsh email monitoring and retention system. All hard copy documents are maintained at the main office OSJ in Nashville, TN.
Our firm maintains the following document types and forms that are not transmitted to our clearing firm: new account forms, order tickets, accounting records.
Our firm maintains its back-up hard copy books and records at an off-site location. These records are paper copies and/or electronic files. The designated principal is responsible for the maintenance of these back-up books and records. Our firm backs up its paper records by copying and taking them to our back-up site. We back up our records every at least quarterly.
The firm backs up its electronic records daily to an off-site 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 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 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 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 our web site, Cellular telephones, voice mail, and secure email. 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 assets and liquid assets to evaluate our ability to continue to fund our operations and remain in capital compliance. We will contact our clearing firm and customers 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 Parent company immediately to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators as required by SEC Rules 15c3-1 and 17a-11, 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 those services provided by our clearing firm.
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, entry and execution. Our clearing firms 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 firms’ contracts provide that our clearing firms will maintain a business continuity plan and the capacity to execute that plan. Our clearing firms represent that they will advise us of any material changes to the plan that might affect our ability to maintain our business [and presented us with an executive summary of the plan, which is attached]. In the event our clearing firms execute the plan, clearing firms represent that they will notify us of such execution and provide us equal access to services as its other customers. If we reasonably determine that our clearing firms have not or cannot put the plan in place quickly enough to meet our needs, or is otherwise unable to provide access to such services, our clearing firms represent that clearing firms will assist us in seeking services from an alternative source.
Our clearing firms represent that they back up our records at a remote site. Our clearing firms represent that they operate a back-up operating facility in a geographically separate area with the capability to conduct the same volume of business as the primary site. Our clearing firm has also confirmed the effectiveness of the back-up arrangements to recover from a wide scale disruption by testing the 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.
A. Our Firm’s Mission Critical Systems
As previously noted, the majority of our revenue is derived from application or subscription business.
1. Order Taking
Currently, our firm receives orders from customers via telephone or 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 any available method. If necessary, we will advise our customers to place orders directly with our clearing firm.
2. Order Entry
Currently, our firm enters orders by recording them on paper and electronically and sending them to our clearing firms electronically or telephonically. Alternatively, we place customer orders through an electronic system. We have contacted our clearing firms and were told that, under the BCP, we can expect services within the quickest time possible.
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 electronically, fax and telephone. 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 firms for order entry.
B. Mission Critical Systems Provided by Our Clearing Firm
Our firm relies, by contract, on our clearing firms 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
We now communicate with our customers using the telephone, e-mail, our Web site, 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.
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 and office phone numbers. We have identified persons, noted below, who may reach each other in person:
The person to invoke use of the call tree is: Josh Rogers
- Josh Rogers
- UnBo (Bob) Chung
- David Hock
- Micah Rayner
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. The address of our primary FINRA and SEC Regulators follows:
Securities and Exchange Commission
Mail Stop 8031
100 F Street, NE
Washington, DC 20549
Atlanta Regional Office
3475 Lenox Road, N.E., Suite 1000
Atlanta, GA 30326-1232
FINRA Document Processing
9509 Key West Ave.
Rockville, MD 20850
FINRA New Orleans District Office
1100 Poydras Street
Energy Center, Suite 850
New Orleans, LA 70163-0802
Phone: (504) 522-6527 and Fax: (504) 522-4077
We are registered in several states; instead of providing all the information here, we access the most recent updates on the North American Securities Administrators Association web site: https://www.nasaa.org/contact-your-regulator.
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.
200 Galleria Parkway SE
Atlanta, GA 30339 / 866-762-7741
Arete Wealth Management LLC
1115 W. Fulton Market
Chicago, IL 60607
One Wall Street
New York, NY 10286, USA
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.
We have contacted our critical counter-parties, such as our clearing firm and product sponsors 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. Again, it should be noted that currently most of our business is application and subscription, so not time sensitive in that the price does not fluctuate during the day or day to day.
XII. Regulatory Reporting
Our firm is subject to regulation by: FINRA, the Securities and Exchange Commission, MSRB and the state securities regulators in the states the firm is registered. 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
Our Business Continuity Plan summary, provided to all new customers, addresses the possibility of a future SBD and how we plan to respond to events of varying scope.
In addressing the events 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 recovery time; and (3) provides general information on our intended response. Our summary discloses the existence of back-up facilities and arrangements, to the extent applicable.
In addition, as required by FINRA Rule 4370, as we maintain a web site, we are required to post the summary on our website, as well as make it available in writing on customer request.
XIV. Updates and Annual Review
FINRA Rule 4370 requires each firm to conduct an annual review of its business continuity plan to determine whether any modifications are necessary in light of changes to the member’s operations, structure, business, or location. If no changes are needed, the CEO will note on the most recent plan and initial and date.
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.
Chief Compliance Officer
March 31, 2023