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LAFAYETTE INVESTMENTS, INC.
BUSINESS CONTINUITY DISCLOSURE SUMMARY
Lafayette Investments, Inc. (“Lafayette” or “the Firm”) creates and maintains this Business Continuity Plan (BCP) and emergency contact information that are designed to enable the Firm to continue to meet its obligations to clients and to communicate with Lafayette associates in the event of a significant business disruption. Lafayette provides this BCP Summary to clients upon account opening, and provides notice to all clients that it is available upon request. Lafayette's website provides a link to the Firm's Summary BCP.
Lafayette's BCP sets forth procedures that the Firm will follow in case of a significant business disruption. Lafayette will review and update the BCP as required by important changes to the Firm's operations. Lafayette will at a minimum conduct an annual review of its BCP and revise it as required by changes to the Firm's business operations. Lafayette's BCP includes the Firm's Pandemic Preparedness Guidance section to address additional challenges that may arise due to a Pandemic.
The following are the key elements of Lafayette's BCP:
- back-up and recovery;
- mission critical systems;
- Financial and operational assessments;
- Alternate communications between clients and Lafayette;
- Alternate communications between Lafayette and its employees;
- Alternate physical location of employees;
- Critical business constituent, bank and counter-party impact;
- Regulatory reporting;
- Communications with regulators; and
- How Lafayette will assist clients in obtaining, from their designated custodian, prompt access to their funds and securities in the event that Lafayette determines that it is unable to continue its business.
Lafayette has considered and made plans for disruptions that may affect its office, and disruptions that affect widespread areas of the region and of the continental United States. Lafayette relies on other organizations and systems, especially on the capabilities of the custodians of our clients, Schwab, Davenport, and Wilmington Trust.
In case of a disruption to Lafayette's office, employees can be relocated to alternate physical locations to continue to provide full service to clients and communicate with regulators. Lafayette has extended secure remote access capabilities to key employees via LogMeIn. Lafayette has tested remote access from the homes of these individuals,
who as a result have available, at the remote location of their choice, every capability currently available on their office computers.
Lafayette relies on Charles Schwab & Co. Inc., to provide mission critical systems. Charles Schwab & Co. Inc., by contract, has the responsibility to receive, execute, clear, and settle orders from Lafayette or its clients, who have chosen Schwab as their custodian. Schwab also provides maintenance of client accounts, access to client accounts
and delivery of funds and securities. Schwab's Business Continuity Disclosure states it has multiple geographically diverse service centers allowing for rapid transfer of work to alternate locations. Schwab Data Centers are located in central Arizona with the primary in Phoenix with a backup facility located in Chandler. It also states, "the alternate
data center maintains infrastructure to support the recovery of the Phoenix production data center to provide applications and data sources that support client access and the firm's internal operations." Schwab maintains redundant worksites to provide continuous service in the event of a malicious act, natural disaster, and/or anomaly resulting in the
unavailability of a specific work location. Schwab's BCP also states, "While no contingency plan can eliminate all risk of service interruption or temporarily impeded account access, we continually assess and update our plans to mitigate all reasonable risk."
Schwab's BCP is reviewed, updated, and tested at least annually. Schwab's internal and external
application providers perform independent testing of their back-up facilities. Charles Schwab has available multiple contact methods to be used in case of a business disruption, and Lafayette employees have access to these methods both at work and at home. Lafayette has established and tested a contact list with employees' home and cell phone numbers and
personal email accounts for use during a business disruption. Depending upon the type of business disruption that occurs, Lafayette can remain in contact with its employees and communicate alternate operational arrangements. It is Lafayette's intention to continue essential operations and resume normal operations as soon as possible in any of the scenarios
outlined above.
SIPC PROTECTION DISCLOSURE
Securities and cash in client accounts have protection in the event of Charles Schwab insolvency. Charles Schwab is a member of the Securities Investor Protection Corporation (SIPC). SIPC protects the clients of its member firms against the loss of their cash and securities in the event of the member's insolvency and liquidation.
SIPC coverage is limited to $500,000 per customer (including $250,000 for claims for cash). For more information on SIPC coverage, please see the explanatory brochure at www.sipc.orgor contact SIPC at (202) 371-8300.In addition to SIPC, Schwab clients receive an extra level of coverage through Ȯxcess SIPC" insurance protection for securities and cash. As stated on Schwab's website, under account protection, "This helps ensure claims will be covered in the event of a brokerage firm failure and funds covered by SIPC protections are exhausted. Schwab's Excess SIPC program has a $600 million aggregate (meaning the most the program will pay for the Excess SIPC portion of the losses). Commodity interests, futures contracts and cash in future accounts are not protected by SIPC."
Monies held in checking accounts, savings accounts, money market deposit accounts, and bank sweep feature are not covered by SIPC, but are instead eligible for FDIC insurance of up to $250,000 per depositor, per institution, in accordance with FDIC rules.
March 20, 2024
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