Penson Financial Services, Inc. (PFSI) provides a variety of services requiring technology and operations processes for its correspondents.  As a firm, PFSI realizes that we must be prepared for a variety of events which could potentially cause a disruption in normal operating procedures.  As such, Penson has implemented a strategic Business Continuity Plan for our worldwide headquarters in Dallas, Texas. 

A wide variety of events could occur that would require the initiation of this Business Continuity Plan.  While it is difficult to provide an exhaustive list of grounds for initiation, examples include anything from natural disasters to terrorist attacks.  If PFSI is unable to support our business critical systems (both automated and manual) in a timely manner, due to failures, attacks or accidents, the Business Continuity Plan will be initiated.

The goal of the Business Continuity Plan  is to ensure that PFSI can continue to process our correspondents' business.  Although there are a variety of services that PFSI offers, in the event of the implementation of the Business Continuity Plan, PFSI will focus primarily on maintaining business critical processes that support Purchase and Sales, Margins and other T+1 clearing and settlement procedures. 

THE PROCESS

The process begins with the escalation of information to the appropriate party and can end with the evacuation of PFSI's headquarters, where recovery of critical business processes will begin.  To initiate the plan, PFSI will follow the below process:

Escalate

Assess

Authorize

Evacuate                 Notify

Recover

If an initiation event occurs, the person(s) who identify the issue will escalate the event to PFSI's Senior Management Team to assess the magnitude of the event.  This team includes PFSI's President, Executive Vice President and/or Chief Operating Officer.  If the Senior Management team's assessment results in the need to evacuate, authorization is required by either the Senior Management Team or the individuals outlined by the building's property management (i.e. Dallas Police Department, Chief Engineer, etc.)

Once evacuation procedures are initiated:

• Senior Management will contact the respective managers and directors;
• Managers and directors will notify and instruct their respective employees to evacuate;
• IT will contact business critical third party vendors; and
• Clearing Services will contact correspondents, a subset of vendors, the NASD and other Penson Worldwide, Inc. divisions.

It is at that time, that the recovery procedures will begin at the Disaster Recover (D/R) Site, or "hot site."  PFSI's D/R Site is located in Las Colinas, a residential and commercial subdivision of the Dallas suburb, Irving.  This site, which is approximately 15 miles from the Dallas headquarters office of PFSI, places the D/R Site far enough away from downtown to be supported by a separate power gird, while still being close enough to efficiently move personnel in the event of a crisis. 

The D/R Site has the capacity for approximately 85 PFSI employees with fully operational and functional desktop workstations.  Each terminal has been assigned to a particular member of the Disaster Staff (D/S) or department, and has been configured with standard and specialized software packages as appropriate.  The exact extensions of management and other select personnel will be transferred from the Dallas headquarters to the D/R site.  Important documentation and reference materials are also stored at the D/R Site.

The primary role of Operations within the Business Continuity Plan is to maintain and restore critical business processes.  Members of the D/S will carry out T+1 clearing and settlement procedures including:

• The ability to submit end of day trade files for posting to Phase 3
• Nightly batch processing of batch
• The ability to generate Phase 3 reports
• The ability to generate all existing daily custom reports
• The ability to generate all existing daily custom file extracts
• The ability to communicate T+1 exceptions
• The ability to communicate account buy power
• The ability to communicate account balances
• The ability to communicate account positions
• The ability to Access the Web

MAINTAINECE

PFSI conducts regular "Disaster Drills."  These drills consist of testing of systems operability as well as having members of the D/S participating in mock scenarios to perform business critical processes and procedures.  The tests include, but are not limited to, submitting test trades, reviewing of daily reports and testing with third party vendors.  Routine systems maintenance and upgrades are also part of the testing procedures.

PFSI also holds periodic departmental meetings in order to update the emergency contact information and to refresh the D/S of disaster recovery procedures.  PFSI will update this plan whenever there is a material change to our operations and/or systems infrastructure. 

To have a full copy of the public Comprehensive Business Continuity Plan sent to you, please fill out the request form below: