Company Policy: Steadfast Companies (“Steadfast” or the “Company”) is a group of companies involved in the acquisition/development, investment, management and operation of real estate, and includes Stira Capital Markets Group, LLC (“SCMG”). The SCMG policy is to respond to a Significant Business Disruption (“SBD”) by safeguarding employees’ lives and company property, making a financial and operational assessment, quickly recovering and resuming operations and protecting all SCMG books and records , and allowing our clients (if any) to transact business. In the event that we determine that we are unable to continue our business, we will promptly notify regulatory authorities, critical business constituents, and all clients. SCMG does not maintain nor hold funds or securities.
Significant Business Disruptions (SBDs): This business continuity plan (“BCP” or this “Plan”) anticipates two kinds of SBDs: internal and external. Internal SBDs affect only our Company’s ability to communicate and do business; for example, a fire in our building. External SBDs prevent the operation of the securities markets or the operation of a number of companies; for example, a city-wide flood or earthquake, a terrorist attack, or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems.
Approval and Execution Authority: The President of SCMG, a registered principal, is responsible for approving the BCP; and is responsible for the Plan’s implementation and execution. The Chief Compliance Officer, also a registered principal, is responsible for conducting the required annual review.
Plan Location and Access: Copies of this Plan, together with annual reviews and any changes that have been made to it for inspection, will be maintained at SCMG offices by the Chief Compliance Officer. We have given the FINRA Los Angeles District a copy of our Plan.
Business Description: SCMG is a specialty broker/dealer whose scope is primarily to wholesale activity and, accordingly, will have very few customers or accounts. However, SCMG operates primarily as the dealer/manager for Steadfast sponsored investment products and real estate investment trusts (collectively, “products”). The Company will develop a network of other broker/dealers to whom the products will be presented and supported for the subsequent sale to the broker/dealer’s retail customers. SCMG does not perform any type of clearing function for itself or others and does not utilize the services of a clearing company. Furthermore, we do not receive or hold customer funds or securities.
Office Locations: The Company is located at 18100 Von Karman Ave., Suite 500, Irvine, CA 92612, and its main telephone number is (949) 852-0700. Our employees may travel to that office by means of foot, car or bus. We do not engage in order taking and entry at this location.
Alternative Physical Location(s) of Employees: In the event of an SBD, our staff will work from their homes or other physical offices that may be designated until an appropriate alternative office location is located and made available.
Customers’ Access to Funds and Securities: SCMG does not maintain custody of customers’ funds or securities. In the event of an internal or external SBD, if telephone service is available, our registered persons will take incoming telephone calls. If web access is available, our company will post on our web site the SCMG’s current status. SCMG is a member of the Securities Investor Protection Corporation (“SIPC”) whose focus is, within limits, expedites the return of missing customer property by protecting each customer up to $500,000 for securities and cash (including a $250,000 limit for cash only). More information about SIPC is available at www.sipc.org. 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.
Data Back-Up and Recovery (Hard Copy and Electronic): SCMG maintains its primary hard copy books and records and its electronic records at the office location listed above. SCMG maintains template subscription documents, marketing material and the SCMG’s financial books and records. SCMG maintains its back-up books and records electronically, the electronic storage of this information is backed up daily. SCMG’s e-mails are also backed up daily and as well as archived by a third part provider. SCMG’s back up tapes containing this information are taken offsite weekly and stored in our bank’s vault. The SCMG backs up pertinent paper records by electronically scanning documents as needed and backing up as indicated above. Telephone services are managed internally and would be subject to availability provided by the telephone company. At this time there is no requirement nor are there any plans for telephones calls to be recorded. As such, no back-up of recorded calls takes place. In the event of an internal or external SBD that causes the loss of our paper records, we will 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 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.
Financial and Operational Assessments: 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 voice mail 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). Moreover, 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. 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 to address all our fiduciary obligations
Mission Critical Systems: Our SCMG’s “mission critical systems” are those that ensure prompt and accurate communications with regulators, affiliated companies, and outside broker/dealers that are supported by SCMG. More specifically, these systems include hardware and software elements (used for the order taking), telephony and electronic communication equipment (for communication and transactional activities). We have primary responsibility for establishing and maintaining these business relationships and have responsibility for managing our mission critical functions. 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 ability to complete all of activities after a wide-scale disruption; resumption refers to reduced capacity.
Order Taking: As a specialty broker/dealer, SCMG does not have many customers or accounts. If SCMG’s business model were to change, the following procedures would be followed. During an SBD, either internal or external, we will continue to take orders by phone or cell phone and mail. In addition, as communications permit, we will inform our customers when communications become available to tell them what alternatives they have to send their orders to us. Customers will be informed of alternatives by email, telephone or other means as appropriate.
Order Entry: In the event of an internal SBD, we will enter and send records to our backup site 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 backup site by the fastest means available when operations are resumed.
Other Services Currently Provided to Customers: In addition to those services listed above in this section, we also assist product sponsors and issuers in the marketing and distribution of various financial products. In the event of an internal or external SBD, we will continue to offer services as the situation allows.
Alternate Communications between the Company and Customers, Employees, and Regulators:
Customers: We now communicate with broker/dealers using the telephone, e-mail, our web site, fax, U.S. mail, and in person visits at SCMG or at other locations. 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 the other party. For example, if we have communicated with a party by e-mail but the internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail.
Employees: We now communicate with our employees using the telephone, e-mail, 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 our employees. We will also employ a call tree so that senior management can reach all employees quickly during an SBD. The call tree includes all staff home and office phone numbers and would be initiated by the President.
Regulators: We are currently a member of FINRA. We communicate with our regulators using the telephone, e-mail, fax, U.S. mail, 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 our regulators.
Critical Business Constituents, Banks, and Counter-Parties:
Business Constituents: We have contacted our critical business constituents (businesses with which we have an ongoing commercial relationship in support of our operating activities, such as vendors providing us critical services and issuers/product sponsors), and determined the extent to which we can continue our business relationship with them in light of an internal or external SBD. We will quickly establish alternative arrangements if a business constituent can no longer provide the needed goods or services when we need them because of a SBD to them or SCMG.
Banks: We have contacted our banks and lenders to determine if they can continue to provide the financing that we will need in light of an internal or external SBD. SCMG operating accounts are held at Manufacturer’s Bank.
Counterparties: We have contacted our critical counterparties, such as other broker-dealers, to determine if we will be able to carry out our regular business with them in light of the internal or external SBD. Where the regular business cannot be completed, we will work with or contact those counter-parties directly to make alternative arrangements to complete those transactions as soon as possible.
Regulatory Reporting: SCMG is subject to regulation by FINRA, SEC and various state securities regulators. 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, FINRA and other regulators to determine what 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: SCMG will update this Plan whenever we have a material change to our operations, structure, business or location. In addition, SCMG will review this Plan to modify it for any changes in our operations, structure, business, or location.