Business Continuity

This is a summary of the Business Continuity Plan (the “Plan”) of Hutchinson, Shockey, Erley & Co. (HSE). The Plan is designed to address a significant business disruption affecting HSE’s business operations conducted at its Chicago headquarters and sets forth HSE’s objectives of safeguarding employees, recovering and resuming operations, protecting books and records, and enabling communications with employees, investors, key service providers, and regulators. All of HSE’s mission critical systems and processes are conducted or located in Chicago, although the firm also has offices in Milwaukee, Wisconsin, Phoenix, Arizona, Española, New Mexico, Denver, Colorado, Houston, Texas, St. Clair Shores, Michigan, and Los Angeles, California.

Whether you are a customer of HSE, an issuer of municipal securities, or a business partner, you should be aware that HSE is committed to planning for and being prepared for a significant business disruption. The Plan addresses two types of significant business disruptions – “internal” disruptions, such as a fire in HSE’s building, affecting only HSE’s ability to communicate and do business, and “external” disruptions, such as an event that might prevent the operation of the securities markets or a number of firms. In either event HSE’s goal will be to recover its critical business processes with minimal interruption, on the same day, if possible, although the length of the disruption is expected to be longer in the event of an external disruption, particularly one affecting the entire securities industry.

The Plan covers HSE’s critical business processes that are essential for HSE to continue to conduct business for a temporary period during a business interruption. Every important aspect of HSE’s securities business, including communications with customers and issuers of municipal securities, order entry and execution, order clearance and public finance is addressed in these processes.

Among the matters addressed in the Plan are the following: •Alternative Physical Location of Employees

  • Customers’ Access to Funds and Securities
  • Data Back-Up and Recovery
  • Financial and Operational Assessments
  • Mission Critical Systems
  • Alternate Communications Between the Firm and Customers, Employees and Regulators
  • Continuation of Business with Critical Business Constituents, Counter Parties and Banks
  • Communications with Regulator

Information technology is central to HSE’s operations. HSE has systems in place for the back-up and recovery of information needed to conduct its business. The Plan identifies the functions, processes and resources necessary to support the restoration and resumption of HSE’s business.

Customers of HSE should note that HSE does not have custody of customer securities, and has custody of funds for only a small minority of its customers. In the event of an internal or external significant business disruption, if telephone service is available, customers will continue to have access through normal channels to their investments and the ability to make purchases and sales despite HSE’s experiencing a significant business disruption, unless the disruption is industry wide in scope.

This summary is subject to modification from time to time as HSE reviews the Plan and its business operations. Customers may obtain a written copy of this summary by contacting Hutchinson, Shockey, Erley & Co., Chief Financial Officer, by mail at 222 West Adams St., Suite 1700, Chicago, IL 60606.

In conclusion, HSE’s Plan addresses the steps HSE will take to address a temporary business disruption in a systematic and organized fashion. The effects of a disaster are of course difficult to predict and the disruption of systems and processes on an industry-wide basis will pose great business continuity challenges for any firm in the securities industry. There can be no assurance that any plan can address such unforeseen contingencies.

Addendum
In the event of a pandemic, HSE’s Business Continuity Plan will be followed.

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