Business Continuity Plan
This disclosure provides you with information pertaining to the business continuity plan of Network 1 Financial Securities, Inc. (Network 1) and is designed to illustrate the approach Network 1 will take in the event of an external and internal significant business disruption.
Overview of Network 1 Financial Securities, Inc.
Network 1 Financial Securities, Inc. is a broker-dealer who handles customer retail accounts, investment banking, and proprietary trading. We are a member of the FINRA, SIPC, and MSRB. Our home office is located in Red Bank, NJ with branch offices in Lyndhurst, NJ; Montague, NJ; Syosset, NY; Freeport, NY; Great Neck, NY; Brooklyn, NY; Jupiter, FL; and Boca Raton, FL with various independent contractors throughout New Jersey.
Network 1 has a variety of mission critical systems that allow us to effectively and promptly process customer orders, manage and maintain customer accounts, and conduct daily business. These systems are provided by various third parties.
Our business continuity plan (BCP) ensures the safety and security of our employees. It also ensures the continued access to accounts, funds, and securities of our customers. The safety of our employees allows us to continue to serve our customers promptly and efficiently. In the case of a business disruption that impairs our main office operations, we will move our operations to one of our alternate (branch) office locations as promptly as possible. Out clearing firm can provide balances and account information in the interim.
In addition to the BCPs of our third party providers and their regular maintenance of their plans and back-up systems, Network 1 also backs-up its records on a regular basis to ensure that all vital information is maintained so that we may effectively serve our customers in the event of a Significant Business Disruption (SBD). Back-up data is maintained at an off-site location in case our main office becomes inaccessible. In case of an emergency in which Network 1 cannot effectively communicate and serve customers, all customers will be referred to our clearing firm for maintenance of their accounts and access to their securities and funds or to an alternate branch office for processing their orders.
Business Continuity Planning Response Scenarios
The details of our business continuity plan contain information that is confidential and may not be disseminated publicly. The following scenarios have been prepared to disclose how Network 1 would handle a SBD according to our business continuity plan.
Scenario 1: A significant business disruption occurs that leads to the complete shutdown of securities trading, clearance/settlement, and/or other banking services nationwide.
Network 1 will continue to function under normal operations unless we are in the affected area or a securities industry holiday is declared. We will work with our clearing firm to provide access of their accounts to customers and prepare to resume full operation upon the resumption of the markets and other third party providers. If Network 1 is in the affected area, we will either move operations to another one of our offices, if possible, or refer all customers to our clearing firm to access their account balances. Our recovery time objective is within two hours if not in the affected area and within twenty-four hours if in the affected area.
Scenario 2: A specific exchange is unable to trade. (nationwide)
During this disruption, Network 1 will continue to accept customer orders and rely on our clearing firm to make appropriate routing decisions to continue to effectively serve our customers. Our recovery time objective is immediate as we will continue regular business operations. Recovery time for the exchange is dependent upon the exchange itself.
Scenario 3: Our telecommunications does not function for some reason. (nationwide or limited to the Firm)
In the event our telephone system fails to function properly, Network 1 will work diligently with our provider to correct the problem as soon as possible. If the problem cannot be fixed within a short time frame, we will try to work with other providers to restore service, otherwise we will rely on which ever other lines of communication are available that the Firm deems necessary (i.e., cell phone, email, mail, or in person). Our recovery time objective is within two hours for establishing some form of communication with customers. Recovery time for the particular telecommunications system is dependent upon the particular system.
Scenario 4: Our main office experiences a power failure. (regional)
Network 1 will remain in operation, to the extent that it is possible, through back-up batteries in order to complete current transactions and refer customers to one of our alternative business locations (one of our branch offices) or our clearing firm. Our website is maintained through an off-site server and will be used to communicate with customers, if available, as well as through the telephone if that is available, as well. Our clearing firm is located out of our region and will, therefore, be our primary means to continue to service our customers throughout a disruption. Our recovery time objective is within four hours.
Scenario 5: Our main office is closed. (single building, immediate area, regional)
Network 1 would remain open for business referring our customers to an alternate branch office until we are able to re-establish our office at one of our branch locations. In the event of this type of business disruption, we will communicate with our customer through our alternate business locations and our website, as our website is maintained at an alternate office location. Our recovery time objective is within twenty-four hours.
In the event of any significant business disruption, we will work diligently to restore and/or maintain our operations. In the interim, we will rely on our clearing firm to service our customers until we are able to restore operations. Information regarding the situation can be obtained by calling our clearing firm, COR Clearing LLC at 866-774-0218, or calling us at 732-758-9001 or, toll free at 1-800-886-7007. (Our phones will be forwarded to another of our office locations.) You can also contact other branch locations such as Montague, NJ at 1-800-960-3833 or our website at www.network1.com.
Updates to this Disclosure
As conditions in our Firm and industry environments change, we will revise our BCP when appropriate. Whenever this disclosure is updated, we will place the revised document on our website and customers may request the revised disclosure be sent in hard copy through the mail.