Objective

While we recognize it is impossible to create a business continuity and disaster recovery plan (BCP) to handle every possible eventuality, it is our intent at Alpha to set up a framework to be used in most likely scenarios. Please note that this BCP is part of our firm’s formal policies and procedures and we have chosen to disclose it here for the peace of mind of our clients and prospective clients. We spend time every day thinking about how we will secure and protect our clients’ savings, so it’s obvious that we also make sure, as a firm, not to become a liability to our clients in the event of an unexpected accident, fire, or even terrorist action. We will always endeavor to reopen lines of communication with our clients if the existing ones are severed for any reason. We will always try to ensure clients can access their account information and execute financial transactions in a crisis, either through us or directly with their broker-dealer as long as the financial exchanges and brokers are able to process the orders. This framework provides guidance as to how we plan to respond should an unforeseen situation occur.

Business Description

Alpha is a registered investment advisor (RIA) that advises clients on their investment portfolios and conducts business in equity, fixed income, and other listed securities. Alpha is not a bank, custodian or broker-dealer and therefore we do not hold customer funds or securities. All transactions are sent to each client’s brokerage firm(s), which execute our orders, allocate them (if necessary), clear, and settle them. Client brokerage firms also maintain our clients’ accounts, can grant clients access to them, and receive/deliver all funds and securities.

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 Alpha’s books and records, and allowing our clients to transact business. In the event that we determine we are unable to continue business we will ensure clients are aware that they continue to have prompt access to their funds and securities directly through their broker(s), bank(s), and custodian(s) (as appropriate). 

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 problem with our computer systems, a fire in our building, or the death of a key member of our firm. External SBDs prevent the operation of the securities markets or a number of firms, such as an electrical power failure/blackout, a terrorist attack, a city flood, an epidemic/pandemic illness, or a wide-scale regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, such as the various brokerage firms and internet service providers we and our clients use.

Approval and Execution Authority

The Chief Compliance Officer is responsible for approving this plan and for conducting the annual review. The CCO has the authority to execute this BCP.

Plan Location and Access 

Alpha will maintain copies of its BCP and annual reviews, and all changes that have been made to it. A physical copy of the BCP will be stored with the company’s written Policies and Procedures Manual in the office of the CCO, and an electronic copy which is kept on a remote server accessible only by key personnel that have a secure password. The electronic copy will be maintained at one online data service provider which helps us store and manage our archives and company business continuity plans. The electronic file is stored as a PDF entitled “Alpha Business Continuity Plan” in the folder “Compliance” of our firm’s main menu folder “Alpha RIA.” This data archive is downloaded regularly and kept at a key person’s home with password protection for storage and preservation at a geographically separate location from our offices.

Office Locations

Our office address and phone number are: 40 Wall Street, Suite 2806, New York, NY, 10005, +1 (212) 933-9301

We engage in client servicing, order taking, and order entry at this location.

Alternative Physical Location(s) of Employees

In the event of an SBD that makes it impossible or impractical to use any or all of the company offices, we will move our staff from affected offices to the closest of our alternative locations, or require that they work from their homes or another safe location to be determined at that time. 

Clients’ Access to Funds and Securities

Alpha does not maintain custody of clients’ funds or securities, which are all maintained at our clients’ brokerage firms, clients’ banks, and/or clients’ custodians. In the event of an internal or external SBD, if telephone service is available, our investment advisor representatives (IAR) will take customer orders or instructions and contact the clients’ brokerage firm(s) on their behalf. If our internet access is available, our firm will either email or post on our website or social media that clients may access their funds and securities by contacting their broker/banker/custodian directly.

Data Back-Up and Recovery (Hard Copy and Electronic)

Alpha maintains its primary hard copy books and records, and electronic records at: 40 Wall Street, Suite 2806, New York, NY 10005.

The CCO 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 clients’ brokerage firm(s): Investment Advisory Contracts, client documents, client correspondence, and other related business documents.

The firm backs up its electronic records regularly by online and local digital backup, and keeps a copy at: 40 Wall Street, Suite 2806, New York, NY 10005. 

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 (such as employees homes).

Operational Assessments

Operational Risk

In the event of an SBD, we will immediately identify what means will permit us to communicate with our clients, employees, critical business constituents, 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 and social media, telephone voice mail, secure e-mail, 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).

Mission Critical Systems

Alpha’s “mission critical systems” are those that ensure client communication, access to client accounts, and trading systems. More specifically, these systems include the office computer systems.

We have primary responsibility for establishing and maintaining our business relationships with our clients. Our clients’ brokerage firms provide 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.  

We initially verify that all of our clients’ brokerage firms maintain a business continuity plan and the capacity to execute that plan.

Our clients’ brokerage firms represent that they back up their records at a remote site. Our clients’ brokerage 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 their primary site. Our clients’ brokerage firms have also confirmed the effectiveness of their back-up arrangements to recover from a wide scale disruption through their own routine testing procedure.

Recovery-time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that can 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 clients’ brokerage firms have the following SBD recovery time objectives: recovery time period of critical, core trading functions as soon as possible; and critical, non-core trading functions within 24 hours following a disruption.

Our Firm’s Mission Critical Systems

Trading

Currently, Alpha enters trades by recording them electronically and sending them to our clients’ brokerage firms electronically or telephonically. 

In the event of an internal SBD, we will enter and send records to our clients’ brokerage firm (or the client’s individual broker) by the fastest alternative means available. In the event of an external SBD, we will maintain the order in electronic or paper format and deliver the order to the clients’ brokerage firm(s) by the fastest means available when they resume operations. In addition, during an internal SBD, we may need to refer our clients to deal directly with their bank(s) or brokerage firm(s) for order entry.

Client Account Information

We currently access client account information via our clients’ brokerage firms’ website and by phoning our clients’ broker/banker. In the event of an internal SBD, we would access client information via email correspondence with the clients’ broker/banker, alternate phone systems, etc.

Alternate Communications with Clients, Employees, and Regulators

Clients

We now communicate with our clients using the phone, email, our website, fax, US mail, and in-person visits at our firm or at the client’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 each different client. For example, if we have communicated with a client by email but the internet is unavailable, we will call them on the phone and follow up where a record is needed with paper copy in the US mail or a courier service (UPS, DHL, etc.).

Employees

We now communicate with our employees using the phone, 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 each employee.

Regulators

We communicate with our regulators using the telephone, email, fax, their websites, and US 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 (written or oral) to the means that we have used in the past to communicate with each different regulator.

Regulatory Reporting

Alpha is subject to regulation by the United States SEC and the New York Attorney General. 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 and/or other relevant 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.

Updates and Annual Review

Our firm will update this BCP whenever we have a material change to our operations, structure, business, or location, or any such changes to our other key business service providers (such as our clients’ brokerage firms). In addition, our firm will review this BCP annually, to modify it for any changes in our operations, structure, business, or location, or any such changes to those of our clients’ brokerage firms.

Please let us know if you have any questions on this framework which we use to protect our firm and clients like you.