Business Continuity Plan





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P.R. Herzig & Co. Inc. has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions are unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.

Firm Policy

Our firmís policy is to respond to a Significant Business Disruption (SBD) by safeguarding employeesí lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firmís books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will assure customersí prompt access to their funds and securities.

This plan is subject to modification, and any modifications to the plan will be promptly posted on the firmís Web site. Customers may alternatively request to receive an updated version of the plan by mail.

Significant Business Disruptions (SBDs)

Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firmís ability to communicate and do business, such as a fire in our building. We intend to be operational within 24 hours of an internal SBD. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing firm.

Approval and Execution Authority

Arthur Pesner, Compliance Officer and a registered principal, is responsible for approving the plan and for conducting the required annual review. Tom Herzig, President, has the authority to execute this BCP.

Plan Location and Access

Our firm will maintain copies of its BCP plan and the annual reviews, and the changes that have been made to it for inspection. An electronic copy of our plan is located on disk stored in the home of an officer of the firm.

Business Description

Our firm conducts business in equity and fixed income securities with retail and small institutional customers. We do not engage in private placements. Our firm is an introducing firm and does not perform any type of clearing function for itself or others. We accept and enter orders, but we do not hold customer funds or securities. All transactions are sent to our clearing firm, which executes our orders, compares them, allocates them, clears and settles them. Our clearing firm also maintains our customersí accounts, can grant customers access to them, and delivers funds and securities. Our clearing firm maintains a comprehensive recovery plan, a summary of which we make available to our clients upon request.

Our clearing firm is Pershing LLC, whose address is One Pershing Plaza, Jersey City, NJ 07399, and telephone number is 201-413-2000. Our contact person is Brian Greenstein,  whose phone number is 201-413-4320 and e-mail is Pershing provides recorded instructions at 201-413-3635 or as otherwise indicated under "Business Continuity Disclosure" at

Office Location

Our office is located at One Expressway Plaza, Suite 200, Roslyn Heights , NY 11577 . Our main telephone number is 516-621-0200. Our email address is We engage in order taking and entry and all other business functions at this location.

Alternative Physical Location(s) of Employees

In the event of an SBD, we will move our staff from affected offices to a broadband-equipped home of an officer of the firm. Our alternative telephone numbers are:




Customersí Access to Funds and Securities

Our firm does not maintain custody of customersí funds or securities, which are maintained at our clearing firm, Pershing LLC. In the event of an internal or external SBD, if telephone service is available, our registered persons will take customer orders or instructions and contact our clearing firm on their behalf, and if our Web access is available, our firm will post on our website a notice that customers may access their funds and securities by contacting Pershing at 201-413-4320, 201-413-3635 or as otherwise indicated under "Business Continuity Disclosure" at

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.

Rules: NASD Rule 3510(a); Securities Exchange Act Rule 15c3-1; 15 U.S.C. 78eee (2003).

Mission Critical Systems

Our firmís ďmission critical systemsĒ are those that ensure prompt and accurate processing of securities transactions, including order taking, entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities. More specifically, these systems include: Axys portfolio management program from Advent Software, Reuters quotation system (Web-based), and a Web-based order entry system which can be accessed from a back-up location.

Data Back-Up and Recovery (Hard Copy and Electronic)

Our firm maintains its primary hard copy books and records and its electronic records at our main office in Roslyn Heights , NY . Arthur Pesner is responsible for the maintenance of these books and records. Our firm maintains the following document types and forms that are not transmitted to our clearing firm: Axys portfolio management program and internal accounting programs.

Our firm maintains a weekly back-up of electronic books and records at the home of an officer of the firm. We maintain additional backups of certain critical records on remote servers run by third parties. Our compliance officer, Arthur Pesner, is responsible for the maintenance of these back-up books and records.

In the event of an internal or external SBD that causes the loss of our paper records, we will physically 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 physically 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.

Rule: NASD Rule 3510(c)(1).

Financial and Operational Assessments

Operational Risk

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 communications, 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).

Rules: NASD Rules 3510(c)(3) & (f)(2).

Financial and Credit Risk

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. We will contact our clearing firm and bank, and investors to apprise them of our financial status. 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, including notification of all customers of the firm.

Rules: NASD Rules 3510(c)(3), (c)(8) & (f)(2).

(End of Plan Summary)