Welton Street Investments LLC
Business Continuity Plan (BCP)
I. Emergency Contact Persons
Welton Street Investments LLC (“Welton Street”) has two emergency contact persons:
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
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.
B. Approval and Execution Authority
Mark Quam, President, is responsible for approving the plan and for conducting the required annual review. Mark Quam 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 our server.
III. Business Description
Our firm acts as an agent for the sale of Direct Participation Programs (“DPP”) offered by various plan sponsors. Our firm 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 the firm offering the DPP. These firms also maintain our customers’ account information.
IV. Office Locations
Our firm has one office which is located in Denver, Colorado.
A. Office Location #1
Our office is located at 4600 S. Syracuse Street, Suite 530, Denver CO 80237. Our main telephone number is (888) 569-1031. Our employees may travel to that office by means of foot, car, train, or bus. We engage in order taking and entry at this location.
V. Alternative Physical Location(s) of Employees
We have the ability to utilize the space of a company located in the downtown area of Denver, Colorado in the event our main office location becomes unavailable to receive those staff. We also have the ability to work from home offices if needed.
VI. Customers’ Access to Funds and Securities
Our firm does not maintain custody of customers’ funds or securities, which are maintained at the selling broker-dealer or their transfer agent or clearing firm. 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 selling plan sponsors on their behalf, and if our Web access is available, our firm will post on our Web site how customers may access their funds and securities. 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)
Our firm maintains its primary hard copy books and records and its electronic records at 4600 S. Syracuse Street, Suite 530, Denver CO 80237. Mark Quam is responsible for the maintenance of these books and records. Our firm maintains the following document types and forms that are not transmitted to the selling plan sponsor:
- New Account Forms and associated documents
- Customer Identification Records
- Firm financial records
Our firm maintains back-up copies of this critical information electronically on the firm’s main server. These records are maintained in “pdf files”. Mark Quam, President is responsible for the maintenance of these back-up books and records. (In addition, much of the client information is duplicated by the various plan sponsors selling the DPPs.)
The firm runs a data backup of all server data, email databases and network storage locations to high capacity tape media each night of the week from Monday through Friday nights. Tape library hardware is employed, which allows all of the above mentioned data, for all servers, to be written to two backup tapes for each nightly backup session.
The tapes utilized for the Monday through Thursday night backups remain inside the library hardware and are copied over each week. These are used for short-term data restores where the lost data being restored was lost less then a week ago.
The tapes utilized for Friday night backups are stored offsite with our data security vendor on the Wednesday following the Friday night backup. There are five sets of Friday night backup tapes that correspond to the weeks of any given month. When there are only four Fridays in a month, then only four sets of the Friday tapes are used, but if there happens to be five Fridays in a month, then all five sets are used. These tapes remain with the data security vendor until they are needed again (e.g. the first Friday of a new month will overwrite the tapes used on the first Friday on the previous month).
On the last business day of each month, a set of Monthly tapes is used, and then stored with the data security vendor until needed again on the last business day on the next month. Also, on the last business day of the calendar year, a set of Yearly tapes is used and then stored by the contractor until needed again on the last business day of the following year.
Tape backups are tested on a regular basis by IT personnel by restoring data from the tapes back to the servers in order to assure proper operation of the backup software and tape library hardware. In addition, backup logs are monitored daily as well as the backup server’s system logs in an effort to detect any problems or discrepancies.
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, telephone voice mail, secure email, etc. In addition, we will retrieve our key activity records as described in the section above.
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 sponsor 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 as recommended by them.
IX. Mission Critical Systems
Critical Information Systems and Allowable Downtime
The IT systems offered and supported by the IT department, in terms of recovery from an SBD, can be split into the two categories of Mission Critical and Non-Mission Critical. The IT department recognizes that all systems hold value and play important roles in the daily operations of the companies, and that opinions may vary as to the levels of importance of each system depending on a user’s function within the business. The IT department will always strive to restore all supported information systems as quickly as possible, but believes that adherence to the below hierarchy of system restoration will advance the SBD recovery process and work toward the greater goal of business continuity.
Systems deemed Mission Critical will carry a maximum allowable downtime, in the event of an SBD, of 24 hours. Those other systems that are deemed Non-Mission Critical will carry a maximum allowable downtime of 72 hours.
A. Mission Critical Systems
- Microsoft Exchange email servers (two)
- External telephone system
B. Non-Mission Critical Systems
- Wireless (mobile) email services
- Web server functionality
- MAS-90 accounting software
- Virtual Private Networking (VPN) connectivity
- User and company data storage
SBD Response and Action List
I. Welton Street’s external telephone lines will be rerouted to employee cell phones. Welton Street personnel will respond as quickly as possible to their calls.
II. IT personnel will recover the most recent backup tapes from offsite, if none are able to be recovered from the IT base of operations. IT personnel will then report to Dividend Capital Securities in downtown Denver where two “hot spare” email servers will be updated with the latest email data available on tape and then put online for web mail access.
III. IT personnel will work to bring all Non-Mission Critical systems online and make them available to users as quickly as possible either from the alternate location or from the base of operations, if usable. All Non-Mission Critical systems will be brought back online before the designated 72 hour deadline.
1. Order Taking
Currently, our firm receives orders from customers via telephone, 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 the next business day. If necessary, we will advise our customers to place orders directly with plan sponsors.
2. Order Execution
We currently execute orders by send appropriate closing documents to plan sponsors. In the event of an internal SBD, in which we were unable to send documents ourselves, we could have the clients send their documents directly to the plan sponsors.
X. Alternate Communications between the Firm and Customers, Employees, and Regulators
A. Customers
We now communicate with our customers using the telephone, email, our Web site, fax, U.S. mail, and in-person visits at our firm’s physical 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.
B. Employees
We now communicate with our employees using the telephone, email, 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.
C. Regulators
We are currently members of the following SROs: Financial Industry Regulatory Authority (FINRA). We communicate with our regulators using the telephone, email, 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 an 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 an SBD to them or our firm.
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 an internal or external SBD. If our bank and other lenders are unable to provide the financing, we will seek alternative financing immediately.
C. Counter-Parties
We have contacted our critical counter-parties, such as other broker-dealers or plan sponsors, to determine if we will be able to carry out our transactions with them in light of an internal or external SBD. Where the transactions cannot be completed, we will 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 the Securities and Exchange Commission (SEC), FINRA and various state regulatory agencies. We now file reports with our regulators using paper copies via the U.S. mail, and electronically using fax, email, and the Internet. In the event of an SBD, we will check with the SEC, NASD, 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 account opening. We also post the disclosure statement on our Web site and mail it to customers upon request. Our disclosure statement is available upon request.
XIV. Updates and Annual Review
Our firm will update this plan whenever we have a material change to our operations, structure, business or location. 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.