Business Continuity Plan
20 September 2013
This plan outlines the principles and processes Event Horizon Capital has adopted to prepare for and recover from disruptions such as fire, flood or power failure at our principal place of business at 306 Llanfair Road, Wynnewood, PA 19096, telephone 1-800-339-7150. It also outlines the steps the Firm has taken to assure clients continued access to their funds in the event the Firm is not able to continue serving clients, such as the death or disability of one of its Principals.
The Firm reviews and updates the Business Continuity Plan annually, updating and improving it appropriately. We share the plan with our clients, both as part of our disclosures and on our Website at www.eventhorizoncapital.com/bcp.
Design Principles of the Plan: We have chosen the following five design principles as guidelines in developing a consistent and complete plan.
- Redundant back-up of all data computer code, client and Firm records, communications and e-mail. We scan all paper documents so they can be efficiently backed up. In our offices, we maintain mirror servers for our databases to mitigate the effects of hardware failures. We back up all of our records and data every business day.
- Ability to recreate our infrastructure and conduct business from any location with electric power and Internet connectivity. We can perform many of the Firm’s operations with a simple laptop computer, but running the Firm’s algorithms require more computer power. We can rebuild our computer systems from generic hardware in 24 hours if necessary, and practice doing just this exercise quarterly. We use Web-based services for telephone, e-mail, data access, hosting our Web site and maintaining our accounting software.
- Depending on larger firms for mission-critical services. We rely on our broker to provide clients access to their accounts, and their ability to deal with business disruption. We rely on large, open source software projects with many users for the foundations of our software development strategy.
- Access to an alternative site. We maintain copies of our data on a portable hard drive in the bank vault at the Bank of America branch in Wynnewood, PA. We update the data archived at this site weekly. In the event that our primary location cannot be used to conduct business, we have a contract for contingency workspace with Regus Workspace Recovery.
- Graceful shutdown if the Firm cannot continue. We arrange for client positions to go to cash if we are unable to continue to manage their portfolios, and have a mechanism in place to inform clients and regulators the Firm is shutting down and to preserve our records if one of the Principals of the Firm dies or is disabled.
In the event of a significant business disruption, Event Horizon Capital would first assure the safety of its people and then take actions necessary to fulfill our fiduciary responsibilities. Depending on the severity of the disruption, we would take some or all of the following steps:
- Secure our records from our principal place of business. If these records were destroyed, we would use our back up copies stored in the bank vault at the Bank of America branch at 250 E Lancaster Ave, Wynnewood, PA, and if necessary bring them up to date with additional data stored with Web providers.
- Travel to our alternative location. Under the terms of our agreement with Regus Workspace Recovery, we can utilize any of their Philadelphia area locations as our alternative space. We expect to use their closest location, at 150 Monument Road, Suite 207, Bala Cynwyd, Pennsylvania, 19004, phone 484-278-6500. In a disaster scenario, this location might not be available, so we would utilize one of their other area locations.
- Re-establish communications with clients, our broker and if necessary, our regulator. We use a Web-based telephone system that rolls call forward to our cell phones, so we already have the ability to remain in contact with clients from a remote location. We can also redirect calls to a different number if necessary. Calls to the Firm’s telephone number would continue to reach us: 1-800-339-7150.
- Ensure our capital level is sufficient to satisfy our regulatory requirements. In the event we fall below the minimum capital level we would immediately inform our regulator.
- Resume operations from our alternative location. If the disruption is widespread, affecting more than our primary business location, we would post a notice on our Website and use email or telephone contact to inform clients of our status. We depend on our broker for critical services like custody and client statements, but we provide portfolio management and monitoring, which might be urgently needed in the face of a disaster.
Death or Disablement of One of the Principals
If one of the Principals of the Firm dies or is seriously disabled, the Firm may be unable to continue to manage client portfolios. In this eventuality, we have arranged for the following action to assure clients have access to their assets and are informed we can no longer serve them:
- Inform clients and regulators. The surviving Principal would inform clients, regulators and our broker or brokers of our change in status, and whether we can continue to perform our fiduciary duties. If the Firm cannot continue, the surviving Principal with file a Form ADV-W with the regulators.
- Close out client positions. We intend for client positions to last for a certain period of time, usually about a month, when we set them up. If necessary, the surviving Principal would close out the clients’ positions as they reach their normal exit times. When we create a position on behalf of a client we also instruct the broker to close the position -- to go to cash -- when the appropriate time is reached. As we rarely close positions sooner than this time, the process of closing out positions is a fail safe mechanism in case both Principals die or are disabled. Our broker is Interactive Brokers LLC, 1 Pickwick Plaza, Greenwich, CT 06830.
- Retention of records. The surviving Principal will preserve the Firm’s records for the required retention period if the other Principal dies or becomes disabled and the Firm has to discontinue operations.