SUMMARY DISCLOSURE
STATEMENT
P.R. Herzig & Co. Inc. has developed a Business
Continuity Plan on how we will respond to events that
significantly disrupt our business. Since the timing and
impact of disasters and disruptions are unpredictable,
we will have to be flexible in responding to actual
events as they occur. With that in mind, we are
providing you with this information on our business
continuity plan.
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.
This plan is subject to modification, and any
modifications to the plan will be promptly posted on the
firm’s Web site. Customers may alternatively request to
receive an updated version of the plan by mail.
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. We intend to be operational within 24 hours of
an internal SBD. 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.
Approval and
Execution Authority
Arthur Pesner, Compliance Officer and a registered
principal, is responsible for approving the plan and for
conducting the required annual review. Tom Herzig,
President, has the authority to execute this BCP.
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 disk stored in the home of an officer of the
firm.
Business
Description
Our firm conducts business in equity and fixed income
securities with retail and small institutional
customers. We do not engage in private placements. Our
firm is an introducing firm and does not perform any
type of clearing function for itself or others. We
accept and enter orders, but we do not hold customer
funds or securities. All transactions are sent to our
clearing firm, which executes our orders, compares them,
allocates them, clears and settles them. Our clearing
firm also maintains our customers’ accounts, can grant
customers access to them, and delivers funds and
securities. Our clearing firm maintains a comprehensive
recovery plan, a summary of which we make available to
our clients upon request.
Office Location
Our office is located at One Expressway Plaza, Suite
200, Roslyn Heights , NY 11577 . Our main telephone
number is 516-621-0200. Our email address is mail@prherzig.com
We engage in order taking and entry and all other
business functions at this location.
Alternative
Physical Location(s) of Employees
In the event of an SBD, we will move our staff from
affected offices to a broadband-equipped home of an
officer of the firm. Our alternative telephone numbers
are:
516-767-3512
516-680-0664
516-761-4900
Customers’ Access
to Funds and Securities
Our firm does not maintain custody of customers’
funds or securities, which are maintained at our
clearing firm, Pershing LLC. 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 website a notice that customers
may access their funds and securities by contacting
Pershing at 201-413-4320, 201-413-3635 or as otherwise
indicated under "Business Continuity Disclosure" at
http://www.pershing.com/footer/legal_disclosure.html.
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.
Rules: NASD Rule 3510(a); Securities
Exchange Act Rule 15c3-1; 15 U.S.C. 78eee (2003).
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: Axys portfolio management program from
Advent Software, Reuters quotation system (Web-based),
and a Web-based order entry system which can be accessed
from a back-up location.
Data Back-Up and
Recovery (Hard Copy and Electronic)
Our firm maintains its primary hard copy books and
records and its electronic records at our main office in
Roslyn Heights , NY . Arthur Pesner is responsible for
the maintenance of these books and records. Our firm
maintains the following document types and forms that
are not transmitted to our clearing firm: Axys portfolio
management program and internal accounting programs.
Our firm maintains a weekly back-up of electronic
books and records at the home of an officer of the firm.
We maintain additional backups of certain critical
records on remote servers run by third parties. Our
compliance officer, Arthur Pesner, is responsible for
the maintenance of these back-up books and records.
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.
Rule: NASD Rule 3510(c)(1).
Financial and
Operational Assessments
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 communications, and secure e-mail.
In addition, we will retrieve our key activity records
as described in the section above, Data Back-Up and
Recovery (Hard Copy and Electronic).
Rules: NASD Rules 3510(c)(3) & (f)(2).
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
clearing firm and bank, 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,
including notification of all customers of the firm.
Rules: NASD Rules 3510(c)(3), (c)(8) &
(f)(2).
(End of Plan Summary)
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