Pre-Transition Protocol for Joining Thurston Springer

 

 

CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT

            The undersigned employee (“Employee”) of Thurston, Springer, Miller, Herd & Titak, Inc. (“Thurston”) acknowledges and agrees that as part of Employee’s [adminstrative, staff or sales assistant] responsibilities with Thurston, Employee has been or will be given access to certain confidential or proprietary information of Thurston, including but not limited to information about clients and prospective clients, business methods and records.  In consideration of Employee’s at-will employment or continued at-will employment with Thurston and the promises and obligations contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Confidential Information.      All confidential information relating to Thurston, its clients and prospective clients, and its business, including, without limitation, information regarding clients and prospective clients, addresses and contact information, account details, marketing, products, services, research and development, accounting and financial matters, strategic and business plans, manuals, policies, processes, procedures, records, budgets, pending projects and proposals, trade information or secrets, or records and copies of records pertaining to the operations, business accounts, clients, prospective clients or business of Thurston, as well as information that Thurston is contractually bound or has a duty to keep confidential under any agreement or understanding with a third party, as well as other confidential information, documents, and records regarding Thurston’s business which it has acquired and/or developed through substantial amounts of time, money and effort, is collectively and individually defined as “Confidential Information.”

2. Restrictions on Use and Disclosure. Employee hereby agrees that all Confidential Information is and shall remain the sole and exclusive property of Thurston.  Employee shall not at any time, either during or subsequent to the voluntary or involuntary termination of Employee’s employment with Thurston, use, publish, transfer, disseminate or otherwise disclose to any person, corporation or other entity any of the Confidential Information without the prior written consent of Thurston, except: (i) as necessary in the performance of Employee’s job duties during Employee’s employment with Thurston; or (ii) as required by law.  Employee shall return to Thurston all Confidential Information and other Thurston property of any kind in Employee’s possession, custody or control promptly upon Thurston’s request and/or upon the voluntary or involuntary termination of Employee’s employment for any reason and Employee shall not keep any copies, duplicates, or excerpts thereof in any form (including but not limited to electronic or hard copy).

3. Restrictive Covenant. Employee agrees that at all times following the voluntary or involuntary termination of his/her employment by Thurston, Employee shall not, directly or indirectly, contact a party who was a client or a prospective client of Thurston within the twelve (12) month period preceding termination of Employee’s employment with Thurston and about whom Employee obtained or accessed Confidential Information from Thurston in order to solicit or provide or offer to solicit or provide products or services competitive to those offered by Thurston.

4. Consent to Reasonableness. Employee specifically consents to, and hereby waives any defense concerning, the reasonableness of the above restrictions in each and every respect and agrees that such restrictions are necessary to protect Thurston, its goodwill, trade secrets, and other Confidential Information.

5. Remedies for Breach. Employee acknowledges and agrees that any actual or threatened breach of this Agreement will cause irreparable harm to Thurston and that it may be difficult to determine or adequately compensate Thurston through monetary damages.  Accordingly, Employee agrees that Thurston shall be entitled to obtain injunctive relief (temporary, preliminary or permanent) against such breach or threatened breach.  Employee further agrees that Thurston shall also be entitled to recover reasonable costs and attorneys’ fees incurred by it to enforce this Agreement.  Employee acknowledges that nothing contained herein shall be construed to prohibit or otherwise limit Thurston from pursuing any other remedies which may be available, including the recovery of damages from Employee.

6. This Agreement is supplementary to, and does not supersede, any consistent provisions of existing agreements by Employee with respect to the confidentiality or trade secrets of Thurston, and any such agreements shall remain in full force and effect.

 

This AGREEMENT, by and between THURSTON, SPRINGER, MILLER, HERD & TITAK, INC. (hereinafter referred to as BROKER/DEALER) and You (hereinafter referred to as SALESMAN), covers the manner in which commissions shall be paid to SALESMAN.

SALESMAN hereby agrees to waive payment of commissions due from BROKER/DEALER on investment company contracts, variable annuities, insurance contracts and direct participation programs, including 12b-1 fees, until such time as BROKER/DEALER is in receipt of such fee. Any sale whereupon the commission payment for the securities purchased is to be made in installments, shall be deemed to be payable to the SALESMAN when the BROKER/DEALER is in receipt of the installment.

A member shall provide an associated person with the following written statement whenever the associated person is asked, pursuant to FINRA Rule 1010, to manually sign an initial or amended Form U4, or otherwise provide written (which may be electronic) acknowledgment of an amendment to the Form U4:

 

The Form U4 contains a pre-dispute arbitration clause. It is in item 5 of Section 15A of the Form U4. You should read that clause now. Before signing the Form U4, you should understand the following:

 

(1) You are agreeing to arbitrate any dispute, claim or controversy that may arise between you and your firm, or a customer, or any other person that is required to be arbitrated under the rules of the self-regulatory organizations with which you are registering. This means you are giving up the right to sue a member, customer, or another associated person in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

 

(2) A claim alleging employment discrimination, including a sexual harassment claim, in violation of a statute is not required to be arbitrated under FINRA rules. Such a claim may be arbitrated at FINRA only if the parties have agreed to arbitrate it, either before or after the dispute arose. The rules of other arbitration forums may be different.

 

(3) Arbitration awards are generally final and binding; a party's ability to have a court reverse or modify an arbitration award is very limited.

 

(4) The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

 

(5) The arbitrators do not have to explain the reason(s) for their award unless, in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the first scheduled hearing date.

 

(6) The panel of arbitrators may include arbitrators who were or are affiliated with the securities industry or public arbitrators, as provided by the rules of the arbitration forum in which a claim is filed.

 

(7) The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.

 

Notify the Chief Compliance Officer immediately:
Associated Persons must update their Form U4 disclosure information promptly when certain events occur or if any of the information changes or becomes inaccurate.

This Independent Contractor Agreement (“Agreement”) is made between Thurston, Springer, Miller, Herd & Titak, Inc., an Indiana Corporation, (hereinafter called "Company"), with principal offices at 9000 Keystone Crossing, Suite 700, Indianapolis, Indiana 46240, and the Financial Professional completing this Thurston Springer Transition Packet, (hereinafter called “FP”).

Section 1:  Appointment  

1.1 The Company hereby appoints the above-referenced FP to act as an independent contractor to offer, sell and service securities and variable insurance products for the Company. The Company further authorizes the FP to collect all sums due from customers on all such transactions. The FP agrees to remit promptly to the Company all collections from customers without commingling any customer payment with the FP’s own funds.

1.2 The FP agrees to sell only securities and variable insurance products available on the Company’s product list or through the trading desk of the Company. Should the FP fail to report any securities sold or fail to remit all sums collected in connection therewith, this Agreement shall terminate, with the reason for termination filed with the appropriate authorities/regulators, and all commissions due the FP shall be forfeited.

1.3 Applications or orders obtained by the FP will not bind the Company. The Company may, in its sole discretion at any time, reject any and all applications or orders transmitted to it by the FP and may refuse to accept payment made by any customer on such rejected application or order.

Section 2:  Independent Contractor

2.1 Nothing contained herein shall in any way be construed to create the relationship of employer and employee, or co-partners or co-joint ventures, between the Company and the FP. The FP shall at all times be an independent contractor and hereby acknowledges the responsibility for his/her own taxes and ineligibility for employment benefits. The FP shall be free to exercise the FP’s own judgment as to the prospects the FP will solicit and the time and place of such solicitation. The FP shall not have the right to alter or amend any certificate of stock, or incur any liability on behalf of the Company.

2.2 The FP agrees to conduct the FP’s business as an independent contractor and to pay all related expenses. These expenses include, but are not limited to:

a. all licensing, renewal and administrative fees charged by FINRA, federal and state agencies, or the Company.

b. all insurance licensing, renewal and continuing education fees;

c. fees assessed for off-site audits conducted by the Company, FINRA or other federal or state agencies; and

d. all costs incurred by the FP in employing personnel to assist the FP, providing for office space and equipment, providing for all costs of telephone and other communication costs, and other incidental costs incurred in the conduct of the FP’s sales activities.

Section 3.  Limitation on Activities

3.1 The FP agrees not to solicit prospects until all securities and insurance licenses required by law have been obtained by the FP. All rights of the FP under this Agreement shall automatically terminate upon cancellation or non-renewal of any required license or membership, except the FP's right to accrued commissions as hereinafter set forth.

3.2 The FP further agrees not to act nor be involved in any activities which may cause the Company to be in violation of the rules and regulations of the Financial Industry Regulatory Authority (FINRA), the Securities Exchange Commission or applicable state laws or regulations.

3.3 The FP also agrees to comply with all Company procedures as may be prescribed from time to time by the Company.

Section 4.  Compliance

4.1 The FP shall make full disclosure to all prospects and customers solicited by the FP of all facts material to the insurance or securities being offered, and shall not make any untrue statements, interpretations or misrepresentations.

4.2 The FP understands it is the FP’s responsibility to annually, or more often if necessary, review the Registered Representative Manual and Compliance Bulletins so that the FP remains familiar with them and that the FP’s business practices are consistent with and conform to the Manual. The FP understands it is the FP’s responsibility to instruct, train and manage his/her employees with regard to the Registered Representative Manual and Compliance Bulletins.  FP agrees to notify the Company immediately of any violations of the Company’s procedures.

4.3 The FP will not be employed by any other broker-dealer, or accept compensation from any other party as a result of any business activity, other than a passive investment, outside the scope of the FP’s relationship with the Company unless the FP has provided prior written notification to the Company, and the Company approves the request in writing. If there is any change to the FP’s outside business activities, the FP will promptly notify Company in writing.

4.4 The FP agrees to abide by the Company’s procedures for reporting all private securities transactions, as outlined in the Registered Representative Compliance Manual and Compliance Bulletins.

4.5 The FP agrees to make available to the Company, in a separate file, all business correspondence received or deposited in the mail, sent or received by e-mail or given to prospective customers, at the times requested by the Company. The FP shall be free to use sales materials as long as materials are lawful, truthful, and not misleading. The FP understands and agrees that pursuant to FINRA and SEC regulations, and the Company’s Registered Representative Compliance Manual and Compliance Bulletins, all advertising and sales literature proposed to be used by the FP must be pre-approved by the Company and if applicable, appropriate regulatory authorities prior to use, including letterhead and business cards.

Section 5.  Confidentiality

5.1 All confidential information relating to the Company, its clients and prospective clients, and its business, including, without limitation, information regarding clients and prospective clients, addresses and contact information, account details, marketing, products, services, research and development, accounting and financial matters, strategic and business plans, manuals, policies, processes, procedures, records, budgets, pending projects and proposals, trade information or secrets, or records and copies of records pertaining to the operations, business accounts, clients, prospective clients or business of the Company, as well as information that the Company is contractually bound or has a duty to keep confidential under any agreement or understanding with a third party, as well as other confidential information, documents, and records regarding the Company’s business which it has acquired and/or developed through substantial amounts of time, money and effort, is collectively and individually defined as “Confidential Information.”

5.2  FP hereby agrees that all Confidential Information is and shall remain the sole and exclusive property of the Company.  FP shall not at any time, either during or subsequent to the voluntary or involuntary termination of this Agreement, use, publish, transfer, disseminate or otherwise disclose to any person, corporation or other entity any of the Confidential Information without the prior written consent of the Company, except: (i) as necessary in the performance of FP’s obligations under this Agreement; or (ii) as required by law.  FP shall return to the Company all Confidential Information and other property of the Company of any kind in FP’s possession, custody or control promptly upon the Company’s request and/or upon the voluntary or involuntary termination of this Agreement.  FP shall not keep any copies, duplicates, or excerpts thereof in any form (including but not limited to electronic or hard copy). Notwithstanding the foregoing, FP may disclose and use a client’s nonpublic information to provide products and services requested by the client.  In all cases, FP may disclose the client’s nonpublic personal information to others only in a manner that is consistent with the Company’s most current privacy policy (as distributed by Company).

5.3 FP will at all times ensure that all Confidential Information, including but not limited to, nonpublic, personal information, is maintained in a safe and secure manner pursuant to the requirements of applicable laws, rules, regulations and Company’s policies and procedures.

5.4 FP shall only dispose of Confidential Information in a safe and secure manner as required by applicable laws, rules and regulations as amended from time to time. All terms and conditions set forth in the Section shall survive termination of this Agreement for any reason.

5.5 In contemplation of or upon termination of this Agreement, FP agrees not to provide, either alone or with the assistance of others, any third party with nonpublic information relating to any Company customer unless Company and the third party are both members of the Broker Protocol and the customer has not provided Company with a notice that the customer has “opted out” of the release of such information.

5.6  FP specifically consents to, and hereby waives any defense concerning, the reasonableness of the above restrictions in each and every respect and agrees that such restrictions are necessary to protect the Company, its goodwill, trade secrets, and other Confidential Information.

5.7  In all circumstances, FP shall comply with the privacy policy of the Company and with any other privacy rules of any regulatory authority applicable to the Company.

Section 6.  Authorization to Access Records

6.1 In accordance with procedures suggested by the U.S. Securities and Exchange Commission, FP hereby authorizes all officers and directors of Company, as well as persons designated by them, to access FP’s personal computer(s) or electronic device(s) as they deem necessary to complete their review of all correspondence and other records required under the Securities Exchange Act of 1934. FP also agrees to provide information to Company, its officers and directors and designees, regarding all other storage equipment FP may use to retain business and personal records.

Section 7.  Compensation

7.1 Commissions include commissions or concessions received by Company as a result of FP making sales or the servicing of securities through First Clearing, mutual funds, mutual funds through First Clearing, variable products, limited partnerships and investment advisory services. 

7.2 Commission payout level is based on rolling twelve-month average gross production as per the attached Compensation Schedule.

7.3 Commissions are paid on the 15^th of the month and the last day of the month, with the exception that if the 15^th shall fall on a weekend or holiday, then payment will be made on the prior business day. 

7.4 Waiver.  The payment of all investment related compensation due FP is waived by FP until Company has received the compensation and will be paid at the applicable level on the next regularly scheduled payment date.  Company’s liability to the FP for payment of the compensation is limited to the compensation actually received by the Company.

7.5 Chargebacks.  FP agrees that FP is liable for all charge backs resulting from trading, order errors or reversals. FP also agrees to be responsible for commission reversals or failures to pay or deliver on the part of FP’s clients.  FP agrees to pay for the cost of arbitration or a lawsuit to collect for such failures.  Company may deduct such cost from commissions and concessions due FP.

7.6 Tax Reporting.  For tax reporting purposes, FP’s 1099 figure will reflect “net commissions” received during the year.  “Net commissions” shall be defined as FP’s payout portion of the gross commission received, including overrides, if applicable, less charges, fees, adjustments or other deductions.  FP is advised that he/she is precluded from taking these deductions again from the net commission figure when reporting income for tax purposes.  FP understands Company’s policy not to issue 1099s for net commissions under $600.00.

7.7 No commission Sharing.  FP agrees not to share commissions or concessions directly or indirectly with an unlicensed individual or entity, or with a licensed individual of another FINRA member.  Payment of 12(b)1 trail commissions to an FP’s widow or designated beneficiary is only permitted when a written Agreement has been executed by Company and the FP.  The FP must be licensed and in good standing with the Company at the time of death.

7.8 Clearing Charges.

      As outlined in the Independent Contractor Rate Schedule. The Independent Contractor Rate Schedule will be provided to you when you join Thurston Springer (appended to this Agreement) and when updated. Outside of these disclosure events, a copy of the Independent Contractor Rate Schedule will be provided to you promptly on request.

Charges assessed by First Clearing shall be passed through at actual cost.  These include, but are not limited to, ‘cancels and rebills’, overnight delivery, extensions, supplies, forms and marketing materials.

7.9 Other Charges.

Fees will be billed to you per the Independent Contractor Rate Schedule in effect when fees are incurred.

7.10 Fee for Alternative Compliance Training.  All FP’s are required under FINRA rules to attend an annual compliance meeting each year. If you do not attend the offered compliance session, alternative compliance sessions may be arranged either in person or by phone. This alternative training may incur additional fees.

7.11 Branch Office Audit Fees.  You will be invoiced for the costs of conducting your required branch and office audits/inspections and any additional audits/inspections Compliance deems necessary.

Section 8.  Termination; Effect of Termination; Non-Solicitation.

8.1 This Agreement may be terminated without cause by either party hereto at any time upon giving the other party written notice of such termination.

8.2 Upon termination of this Agreement for any cause whatsoever, or in the event the FP ceases to be a duly licensed and registered representative of the Company, or is suspended, all rights of the FP to commissions hereunder, except then-accrued commissions due hereunder (subject to any charge backs and expenses and liabilities described in Section 7 hereunder), shall immediately terminate. “Accrued commissions” are those commissions received by the Company as a result of sales submitted to the Company as a result of the FP's sales activities while registered with the Company.

8.3  FP agrees that, during the term of this Agreement and for a period of two (2) years following termination of this Agreement, regardless of the reason or method of termination, FP will not, directly or indirectly, (A) hire any person who is an employee of the Company as of the date of termination, or solicit or induce, or attempt to solicit or induce, any person who is an employee of the Company to terminate that person’s employment with the Company; or (B) solicit or induce, or attempt to solicit or induce, any person otherwise associated with Company (including, without limitation, in a consultant or independent contractor status) to terminate such relationship with the Company.

Section 9.  Indemnification

9.1 In the event the Company initiates legal action to enforce any of the obligations of the FP hereunder, or conducts an investigation to respond to a customer complaint or regulatory inquiry, the FP agrees to pay the Company for attorney's fees and other expenses incurred by the Company in taking such action, in making such an investigation and preparing responses. The FP agrees that Company may withhold commissions and fees due FP and apply them to cover such Company expenses.

9.2 The FP also agrees to indemnify and hold Company harmless against any liability, loss or expense, including legal fees, incurred by the Company arising out of or in connection with (a) FP’s violation, or alleged violation, whether inadvertent, negligent or intentional, of : (1) any federal or state statute, regulation or common law, or any FINRA rule; (2) any provision of this Agreement, or (3) any rule or procedure prescribed by the Company; (b) any services the FP performed for any individual or entity other than the Company; or (c) activities of the FP’s secretarial or administrative assistants. The FP agrees that Company may withhold commissions and fees due the FP and apply them to cover such liability, loss or expense.

Section 10.  Notices

10.1 Any notices required or desired to be sent to the company shall be mailed to: Thurston, Springer, Miller, Herd & Titak, Inc., 9000 Keystone Crossing, Suite 700, Indianapolis, Indiana 46240.

10.2 Any notices required or desired to be sent hereunder to the FP shall be mailed to the FP at the FP’s latest business address provided to Company.

Section 11.  Entire Agreement

11.1 This Agreement supersedes all prior agreements between the FP and the Company, and it represents the entire agreement between the parties with respect to the subject of this Agreement. This Agreement may not be amended except by a written amendment signed by both parties; provided, however, that Company may amend charges, payout rates and payment schedules by 30 days advance written notice to FP.  The FP agrees not to assign this Agreement or any right or interest in it, including the right to receive any amounts payable to the FP, except with the Company’s prior written consent.

Effective Date

This Agreement is effective when the Thurston Springer Transition Packet is accepted and approved by Thurston Springer.

 

 

You are required to obtain permission from Thurston Springer to hold, maintain or manage a securities accounts held with a brokerage firm (other than those transferring to Thurston Springer) by you or anyone in your immediate family (Self / Spouse / Kids) – or any account in which you have a financial or beneficial interest. (Variable Annuity and Mutual fund only accounts are excluded).

 

Please report all accounts you hold at other firms, and accounts in which you have a beneficial interest via this Thurston Springer form.

 

 

Broker/Dealers and their licensed Representatives conduct their business in an area which is held to the highest ethical standards and is subject to stringent government regulation. As part of its continuing compliance program, Thurston, Springer, Miller, Herd & Titak, Inc. requires each of its licensed Representatives to execute acknowledgement of the fact that Thurston, Springer, Miller, Herd & Titak, Inc. relies upon the representations made here in fulfilling its duty to supervise the activities of its Representatives.

In consideration of my continued status as Representative with Thurston, Springer, Miller, Herd & Titak, Inc. and in acknowledgement of the reliance which Thurston, Springer, Miller, Herd & Titak, Inc. places upon these representations in conducting its compliance program, I make the following representations and agree I will report any violation to the Compliance Officer of the firm.

1. I know the new suitability and “Know your Customer” rules and will comply.

 

2. I acknowledge that Thurston, Springer, Miller, Herd & Titak, Inc. does not permit discretionary accounts except those specifically approved by your designated firm Principal. Discretion does not include price or time as long as the order is entered the same day the client approves the transaction.

 

3. Both agent and security must be registered or legally exempt in any state in which a transaction takes place.

 

4. Each item of advertising, sales literature or other materials distributed to customers or prospects shall be approved by your designated firm Principal prior to use.

 

5. All securities related correspondence, typewritten, handwritten or electronic, must be filed with your designated firm Principal and must be approved prior to mailing, including any such items no matter what the content is, that is sent to 25 or more within 30 days. The procedure may vary depending on your designated firm Principal. Any written document you create that addresses a client’s financial needs may be construed as financial planning and must be cleared with Compliance before providing it to a client.

 

6. All customer and business related emails must be sent via our email system so that they are captured for archive and review. No business emails may be sent or received to your personal email address. No Instant Messaging or text messages may be utilized for business matters. No business related material may be posted to any social networking site unless specifically approved by your designated firm Principal.

 

7. Money and/or securities are never borrowed or taken from a customer in any manner.

 

8. Securities are never received from a customer without issuing a receipt and the securities must be forwarded immediately to Thurston Springer’s Operations Department or clearing firm.

 

9. All checks for brokerage accounts shall be made payable to Thurston Springer’s clearing firm and shall be promptly forwarded to Thurston Springer’s Operations department for deposit to the client’s account. In the case of a product, the check shall be made payable to the fund or annuity company, shall be copied and logged in by date and shall be mailed promptly.

 

10. Employees are strictly prohibited from conducting any securities or investment business or arranging for any securities transactions other than through Thurston, Springer, Miller, Herd & Titak, Inc. without the written permission of your designated Principal of the firm. I am required to disclose via the appropriate Thurston Springer form any financial interest I may have any securities accounts with outside broker/dealers, investment advisers, banks or other financial institutions.

 

11. Operating an account under a fictitious name is prohibited.

 

12. Sharing directly or indirectly in any profits or losses of a customer is prohibited. Guaranteeing a customer against loss is prohibited.

 

13. Receiving a fee of any kind which is not disclosed or approved by your designated Principal beforehand is prohibited.

 

14. All customer complaints, either written or oral, must be brought to the attention of the Compliance Officer immediately.

 

15. New account information is factual and kept current to the best of my knowledge.

 

16. All accounts operated by a third party are covered by a Power of Attorney or Trading Authorization properly executed by the registered owner. This includes any account opened in the name of the wife and operated by the husband or vice versa.

 

17. The policy of Thurston, Springer, Miller, Herd & Titak, Inc. is to prohibit the acceptance of cash.

 

18. I understand it is a violation of the SEC Insider Trading regulations to trade on material, non-public information.

 

19. I am ever mindful of regulations governing free-riding, suitability, excessive trading, misrepresentation, unauthorized trading and penny stocks.

 

20. I am aware of the cold calling regulations and shall seek approval from my designated firm Principal, and utilize the do-not-call list prior to contacting any prospective client.

 

21. I am aware of the company’s policies involving sales of mutual funds.
∙ I ensure that my clients received a prospectus at the time they purchased mutual fund shares.
∙ I utilize Letters of Intent or Rights of Accumulation to ensure that my clients have received the appropriate breakpoints.
∙ I am aware of the prohibition against mutual fund switching.
∙ I am aware of the prohibition against selling mutual funds below breakpoints.
∙ I am aware of the prohibition against selling mutual funds on “dividends.”
∙ I am aware of the prohibition against splitting mutual fund purchases.
∙ If I have sell contingent deferred sales load mutual funds (back-end load), I fully represent the nature of the sales charge to my clients and refrained from referring to these funds as “no load”.

 

22. I am aware of the requirement to immediately report any event that would result in an amendment to my U-4.

 

23. I am aware of the firm’s policies and the regulations pertaining to anti-money laundering and the Patriot Act.

 

24. I am not engaged in any outside business activity except as previously approved in writing by my designated firm Principal..

 

25. I have read and understand the firm’s Code of Ethics, and will comply with all
requirements. I have submitted all holdings reports as required by the Code.

 

26. I am aware of the firm’s policy regarding gifts and entertaining of clients.

 

The Federal Trade Commission and federal banking regulators have issued joint regulations which will apply to most member firms and will require that:

Each financial institution or other creditor develop and implement a written program to detect, prevent and mitigate identity theft in connection with the opening of certain accounts and the maintenance of certain existing accounts (referred to as the Red Flags Rule). This program must be approved by the Board of Directors, must be overseen by a member of senior management, must include staff training, oversight of service providers and consider the guidelines provided by the agencies.
We have determined that our firm meets the definition of “financial institution or creditor” and that we have “covered accounts”.

 

Firm Policy
Our firm’s policy is to protect our customers and their accounts from identity theft and to comply with the FTC’s Red Flags Rule. We will do this by developing and implementing this written ITPP, which is appropriate to our size and complexity, as well as the nature and scope of our activities. This ITPP addresses 1) identifying relevant identity theft Red Flags, 2) detecting those Red Flags, 3) responding appropriately to any that are detected to prevent and mitigate identity theft, and 4) updating our ITPP periodically to reflect changes in risks.
Our identity theft policies, procedures and internal controls will be reviewed and updated periodically to ensure they account for changes both in regulations and in our business.
Rule: 16 C.F.R. § 681.1(d).

 

ITPP Approval and Administration
Brian Sweeney, Chief Compliance Officer and a member of senior management, is the designated identity theft officer and is responsible for the oversight, development, implementation and administration (including staff training and oversight of third party service providers) of this ITPP.
Rule: 16 C.F.R. § 681.1(e) and Appendix A, Section VI.(a).

 

Relationship to Other Firm Programs
We have reviewed other policies, procedures and plans required by regulations regarding the protection of our customer information, including our policies and procedures under Regulation S-P, our CIP and red flags detection under our AML Compliance Program in the formulation of this ITPP, and modified either them or this ITPP to minimize inconsistencies and duplicative efforts.
Rule: 16 C.F.R. § 681.1, Appendix A, Section I.

 

Identifying Relevant Red Flags
To identify relevant identity theft Red Flags, our firm assessed these risk factors: 1) the types of covered accounts it offers, 2) the methods it provides to open or access these accounts, and 3) previous experience with identity theft. Our firm also considered the sources of Red Flags, including identity theft incidents our firm has experienced, changing identity theft techniques our firm thinks likely, and applicable supervisory guidance. In addition, we considered Red Flags from the following five categories (and the 26 numbered examples under them) from Supplement A to Appendix A of the FTC’s Red Flags Rule: 1) alerts, notifications or warnings from a credit reporting agency; 2) suspicious documents; 3) suspicious personal identifying information; 4) unusual use of or suspicious activity relating to a covered account; and 5) notices from other sources such as customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts. We understand that some of these categories and examples may not be relevant to our firm and some may be relevant only when combined or considered with other indicators of identity theft. We also understand that the examples are not exhaustive or a mandatory checklist, but a way to help our firm think through relevant red flags in the context of our business.
Rule: 16 C.F.R. § 681.1(d)(2)(i) and Appendix A, Section II.

 

Detecting Red Flags
We have reviewed our covered accounts, how we open and maintain them, and how to detect Red Flags that may have occurred in them. Our detection of those Red Flags is based on our methods of getting information about applicants and verifying it under our CIP of our AML compliance procedures, authenticating customers who access the accounts, and monitoring transactions and change of address requests. For opening covered accounts, that can include getting identifying information about and verifying the identity of the person opening the account by using the firm’s CIP. For existing covered accounts, it can include authenticating customers, monitoring transactions, and verifying the validity of changes of address.
Rule: 16 C.F.R. § 681.1(d)(2)(ii) and Appendix A, Section III.

Preventing and Mitigating Identity Theft
We have reviewed our covered accounts, how we open and allow access to them, and our previous experience with identity theft, as well as new methods of identity theft we have seen or foresee as likely. Based on this and our review of the FTC’s identity theft rules and its suggested responses to mitigate identity theft, as well as other sources, we have developed our procedures below to respond to detected identity theft Red Flags.

 

Procedures to Prevent and Mitigate Identity Theft
When we have been notified of a Red Flag or our detection procedures show evidence of a Red Flag, we will take the steps outlined below, as appropriate to the type and seriousness of the threat:

 

Applicants. For Red Flags raised by someone applying for an account:
1. Review the application. We will review the applicant’s information collected for our CIP under our AML Compliance Program (e.g., name, date of birth, address, and an identification number such as a Social Security Number or Taxpayer Identification Number).
2. Get government identification. If the applicant is applying in person, we will also check a current government-issued identification card, such as a driver’s license or passport. If the applicant is submitting an application via other means, we will require a copy of government-issued identification. If the applicant does not possess such a document, we will use non-documentary means to verify their identity.
3. Seek additional verification. If the potential risk of identity theft indicated by the Red Flag is probable or large in impact, we may also verify the person’s identity through non-documentary CIP methods, including:
a. Contacting the customer;
b. Independently verifying the customer’s information by comparing it with information from a credit reporting agency, public database or other source;
c. Checking references with other affiliated financial institutions; or
d. Obtaining a financial statement.
4. Deny the application. If we find that the applicant is using an identity other than his or her own, we will deny the account.
5. Report. If we find that the applicant is using an identity other than his or her own, we will report it to appropriate local and state law enforcement; where organized or wide spread crime is suspected, the FBI or Secret Service; and if mail is involved, the US Postal Inspector. We may also, as recommended by FINRA’s Customer Information Protection web page’s “Firm Checklist for Compromised Accounts,” report it to our FINRA coordinator; the SEC; state regulatory authorities, such as the State Securities Commission; and our clearing firm.
6. Notification. If we determine personally identifiable information has been accessed, we will prepare any specific notice to customers or other required notice under state law.

 

Access seekers. For Red Flags raised by someone seeking to access an existing customer’s account:
1. Watch. We will monitor, limit, or temporarily suspend activity in the account until the situation is resolved.
2. Check with the customer. We will contact the customer using our CIP information for them, describe what we have found and verify with them that there has been an attempt at identity theft.
3. Heightened risk. We will determine if there is a particular reason that makes it easier for an intruder to seek access, such as a customer’s lost wallet, mail theft, a data security incident, or the customer’s giving account information to an imposter pretending to represent the firm or to a fraudulent web site.
4. Check similar accounts. We will review similar accounts the firm has to see if there have been attempts to access them without authorization.
5. Collect incident information. For a serious threat of unauthorized account access we may, as recommended by FINRA’s Customer Information Protection web page’s “Firm Checklist for Compromised Accounts,” collect if available:
a. Firm information (both introducing and clearing firms):
i. Firm name and CRD number
ii. Firm contact name and telephone number
b. Dates and times of activity
c. Securities involved (name and symbol)
d. Details of trades or unexecuted orders
e. Details of any wire transfer activity
f. Customer accounts affected by the activity, including name and account number, and
g. Whether the customer will be reimbursed and by whom.
6. Report. If we find unauthorized account access, we will report it to appropriate local and state law enforcement; where organized or wide spread crime is suspected, the FBI or Secret Service; and if mail is involved, the US Postal Inspector. We may also, as recommended by FINRA’s Customer Information Protection web page’s “Firm Checklist for Compromised Accounts,” report it to our FINRA coordinator; the SEC; State regulatory authorities, such as the State Securities Commission; and our clearing firm.
7. Notification. If we determine personally identifiable information has been accessed that results in a foreseeable risk for identity theft, we will prepare any specific notice to customers or other required under state law. [see note at 6, under “Applicants” above]
8. Review our insurance policy. Since insurance policies may require timely notice or prior consent for any settlement, we will review our insurance policy to ensure that our response to a data breach does not limit or eliminate our insurance coverage.
9. Assist the customer. We will work with our customers to minimize the impact of identity theft by taking the following actions, as applicable:
a. Offering to change the password, security codes or other ways to access the threatened account;
b. Offering to close the account;
c. Offering to reopen the account with a new account number;
d. Not collecting on the account or selling it to a debt collector; and
e. Instructing the customer to go to the FTC Identity Theft Web Site to learn what steps to take to recover from identity theft, including filing a complaint using its online complaint form, calling the FTC’s Identity Theft Hotline 1-877-ID-THEFT (438-4338), TTY 1-866-653-4261, or writing to Identity Theft Clearinghouse, FTC, 6000 Pennsylvania Avenue, NW, Washington, DC 20580.
Rule: 16 C.F.R. § 681.1(d)(iii) and Appendix A, Section IV.

 

Clearing Firm and Other Service Providers
Our firm uses a clearing firm and other service providers in connection with our covered accounts. We confirm that our clearing firm and any other service provider that performs activities in connection with our covered accounts, especially other service providers that are not otherwise regulated, comply with reasonable policies and procedures designed to detect, prevent and mitigate identity theft or take appropriate steps of their own to prevent or mitigate the identify theft or both. Our clearing firm is First Clearing, 1 North Jefferson, St. Louis, Missouri 63103, 888-322-2532.

 

Our other service providers that perform activities in connection with our covered accounts are:

 

Network Services Group and Global Relay
The duties of users of consumer reports do not apply to our firm.
The duties of debit and credit card issuers do not apply to our firm.
Rule: 16 C.F.R. § 681.1(e)(4) and Appendix A, Section VI.(c).

 

Internal Compliance Reporting
Our firm’s staff with responsibilities for developing, implementing and administering our ITPP will assess the program at least annually or upon any significant change and an updated report will be made as applicable to our Board of Directors. The report will address the effectiveness of our ITPP in addressing the risk of identity theft in connection with covered account openings, existing accounts, service-provider arrangements, significant incidents involving identity theft and management’s response and recommendations for material changes to our ITPP.
Rule: 16 C.F.R. § 681.1, Appendix A, Section VI.(b).

 

Updates and Annual Review
Our firm will update this plan whenever we have a material change to our operations, structure, business or location or to those of our clearing firm, or when we experience either a material identity theft from a covered account, or a series of related material identity thefts from one or more covered accounts. Our firm will also follow new ways that identities can be compromised and evaluate the risk they pose for our firm. In addition, our firm will review this ITPP annually to modify it for any changes in our operations, structure, business, or location or substantive changes to our relationship with our clearing firm.
Rule: 16 C.F.R. § 681.1 (d)(2)(iv) and Appendix A, Sections V. and VI. (a) & (b).

Training
Each employee will receive a copy of the firm’s program and will be required to sign a statement that they have read and understand the policies and procedures pertaining to identity theft. We will also utilize FINRA’s webcast entitled “Important Issues in Customer Data Protection” and other materials that may be made available from time to time.

 

Table of Contents
1 - Statement of General Policy
2 - Definitions
3 - Standards of Business Conduct
4 - Prohibition Against Insider Trading
5 - Personal Securities Transactions
6 - Gifts and Entertainment
7 - Protecting the Confidentiality of Client Information
8 - Service as an Officer or Director
9 - Compliance Procedures
10 - Certification
11 - Records
12 - Reporting Violations and Sanctions

 

Statement of General Policy
This Code of Ethics (“Code”) has been adopted by Thurston, Springer, Miller, Herd & Titak, Inc. and is designed to comply with Rule 204A-1 under the Investment Advisers Act of 1940 (“Advisers Act”). This Code establishes rules of conduct for all employees of Thurston Springer and is designed to, among other things, govern personal securities trading activities in the accounts of employees and associated persons, immediate family/household accounts and accounts in which an employee/associated person has a beneficial interest. The Code is based upon the principle that Thurston Springer and its employees/associated persons owe a fiduciary duty to Thurston Springer's clients to conduct their affairs, including their personal securities transactions, in such a manner as to avoid (i) serving their own personal interests ahead of clients, (ii) taking inappropriate advantage of their position with the firm and (iii) any actual or potential conflicts of interest or any abuse of their position of trust and responsibility. The Code is designed to ensure that the high ethical standards long maintained by Thurston Springer continue to be applied. The purpose of the Code is to preclude activities which may lead to or give the appearance of conflicts of interest, insider trading and other forms of prohibited or unethical business conduct. The excellent name and reputation of our firm continues to be a direct reflection of the conduct of each employee/associated person.
Pursuant to Section 206 of the Advisers Act, Thurston Springer and its employees/associated persons are prohibited from engaging in fraudulent, deceptive or manipulative conduct. Compliance with this section involves more than acting with honesty and good faith alone. It means that the Thurston Springer has an affirmative duty of utmost good faith to act solely in the best interest of its clients. Thurston Springer and its employees/associated persons are subject to the following specific fiduciary obligations when dealing with clients:
¤ The duty to have a reasonable, independent basis for the investment advice provided;
¤ The duty to obtain best execution for a client’s transactions where the Firm is in a position to direct brokerage transactions for the client;
¤ The duty to ensure that investment advice is suitable to meeting the client’s individual objectives, needs and circumstances; and
¤ The duty to be loyal to clients: In meeting its fiduciary responsibilities to its clients, Thurston Springer expects every employee/associated person to demonstrate the highest standards of ethical conduct for continued employment/association with Thurston Springer. Strict compliance with the provisions of the Code shall be considered a basic condition of employment with Thurston Springer. Thurston Springer's reputation for fair and honest dealing with its clients has taken considerable time to build. This standing could be seriously damaged as the result of even a single securities transaction being considered questionable in light of the fiduciary duty owed to our clients. Employees / Associates are urged to seek the advice of the Chief Compliance Officer for any questions about the Code or the application of the Code to their individual circumstances. Employees should also understand that a material breach of the provisions of the Code may constitute grounds for disciplinary action, including termination of employment with Thurston Springer The provisions of the Code are not all-inclusive. Rather, they are intended as a guide for employees/associated persons of Thurston Springer in their conduct. In those situations where an employee/associate may be uncertain as to the intent or purpose of the Code, he/she is advised to consult with the Compliance Officer. The Chief Compliance Officer may grant exceptions to certain provisions contained in the Code only in those situations when it is clear beyond dispute that the interests of our clients will not be adversely affected or compromised. All questions arising in connection with personal securities trading should be resolved in favor of the client even at the expense of the interests of employees/associates.
The Chief Compliance Officer will periodically report to senior management/board of directors of Thurston Springer to document compliance with this Code.

 

Definitions
For the purposes of this Code, the following definitions shall apply:
¤ “Access person” means any supervised person who: has access to nonpublic information regarding any clients’ purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any Reportable fund our firm or its control affiliates manage or has access to such recommendations; or is involved in making securities recommendations to clients that are nonpublic.
¤ “Account” means accounts of any employee and includes accounts of the employee’s /associates’ immediate family members (any relative by blood or marriage living in the employee’s household), and any account in which he or she has a direct or indirect beneficial interest, such as trusts and custodial accounts or other accounts in which the employee has a beneficial interest, controls or exercises investment discretion.
¤ “Beneficial ownership” shall be interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 in determining whether a person is the beneficial owner of a security for purposes of Section 16 of such Act and the rules and regulations thereunder.
¤ 'Fund' means an investment company registered under the Investment Company Act.
¤ 'Reportable fund' means any registered investment company, i.e., mutual fund, for which our Firm, or a control affiliate, acts as investment adviser, as defined in section 2(a) (20) of the Investment Company Act, or principal underwriter.
¤ “Reportable security” means any security as defined in Section 202(a)(18) of the Advisers Act, except that it does not include: (i) Transactions and holdings in direct obligations of the Government of the United States; (ii) Bankers’ acceptances, bank certificates of deposit, commercial paper and other high quality short-term debt instruments, including repurchase agreements; (iii) Shares issued by money market funds; (iv) Transactions and holdings in shares of other types of open-end registered mutual funds, unless Thurston Springer or a control affiliate acts as the investment adviser or principal underwriter for the fund; and (v) Transactions in units of a unit investment trust if the unit investment trust is invested exclusively in mutual funds, unless Thurston Springer or a control affiliate acts as the investment adviser or principal underwriter for the fund.
¤ “Supervised person” means directors, officers and partners of Thurston Springer (or other persons occupying a similar status or performing similar functions); employees of Thurston Springer and any other person who provides advice on behalf of Thurston Springer and is subject to Thurston Springer's supervision and control.

Standards of Business Conduct
Thurston Springer places the highest priority on maintaining its reputation for integrity and professionalism. That reputation is a vital business asset. The confidence and trust placed in our firm and its employees by our clients is something we value and endeavor to protect. The following Standards of Business Conduct set forth policies and procedures to achieve these goals. This Code is intended to comply with the various provisions of the Advisers Act and also requires that all supervised persons comply with the various applicable provisions of the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and applicable rules and regulations adopted by the Securities and Exchange Commission (“SEC”). Section 204A of the Advisers Act requires the establishment and enforcement of policies and procedures reasonably designed to prevent the misuse of material, nonpublic information by investment advisers. Such policies and procedures are contained in this Code. The Code also contains policies and procedures with respect to personal securities transactions of all Thurston Springer's supervised persons as defined herein. These procedures cover transactions in a reportable security in which a supervised person has a beneficial interest in or accounts over which the supervised person exercises control as well as transactions by members of the supervised person’s immediate family. Section 206 of the Advisers Act makes it unlawful for Thurston, Springer, Miller, Herd & Titak, Inc. or its agents or employee/associates to employ any device, scheme or artifice to defraud any client or prospective client, or to engage in fraudulent, deceptive or manipulative practices. This Code contains provisions that prohibit these and other enumerated activities and that are reasonably designed to detect and prevent violations of the Code, the Advisers Act and rules thereunder.

 

Prohibition of Insider Trading
Trading securities while in possession of material, nonpublic information, or improperly communicating that information to others may expose supervised persons and Thurston Springer to stringent penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten years imprisonment. The SEC can recover the profits gained or losses avoided through the illegal trading, impose a penalty of up to three times the illicit windfall, and/or issue an order permanently barring you from the securities industry. Finally, supervised persons and Thurston Springer may be sued by investors seeking to recover damages for insider trading violations. The rules contained in this Code apply to securities trading and information handling by supervised persons of Thurston Springer and their immediate family members.
The law of insider trading is unsettled and continuously developing. An individual legitimately may be uncertain about the application of the rules contained in this Code in a particular circumstance. Often, a single question can avoid disciplinary action or complex legal problems. You must notify the Compliance Officer immediately if you have any reason to believe that a violation of this Code has occurred or is about to occur.

 

General Policy
No supervised person may trade, either personally or on behalf of others (such as investment funds and private accounts managed by Thurston Springer, while in the possession of material, nonpublic information, nor may any personnel of Thurston Springer communicate material, nonpublic information to others in violation of the law.

Personal Securities Transactions - General Policy
Thurston Springer has adopted the following principles governing personal investment activities by Thurston Springer's supervised persons:
¤ The interests of client accounts will at all times be placed first;
¤ All personal securities transactions will be conducted in such manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility; and
¤ Supervised persons must not take inappropriate advantage of their positions.

 

Pre-Clearance Required for Participation in IPOs
No supervised person shall acquire any beneficial ownership in any securities in an Initial Public Offering for his or her account, as defined herein without the prior written approval of the Compliance Officer who has been provided with full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of the supervised person’s activities on behalf of a client) and, if approved, will be subject to continuous monitoring for possible future conflicts.

 

Pre-Clearance Required for Private or Limited Offerings
No supervised person shall acquire beneficial ownership of any securities in a limited offering or private placement without the prior written approval of the Compliance Officer who has been provided with full details of the proposed transaction (including written certification that the investment opportunity did not arise by virtue of the supervised person’s activities on behalf of a client) and, if approved, will be subject to continuous monitoring for possible future conflicts.

 

Interested Transactions
No supervised person shall recommend any securities transactions for a client without having disclosed his or her interest, if any, in such securities or the issuer thereof, including without limitation:
¤ any direct or indirect beneficial ownership of any securities of such issuer;
¤ any contemplated transaction by such person in such securities;
¤ any position with such issuer or its affiliates; and
¤ any present or proposed business relationship between such issuer or its affiliates and such person or any party in which such person has a significant interest.

 

Gifts and Entertainment General Policy
Thurston Springer has adopted the policies set forth below to guide supervised persons in this area as follows:
¤ Giving, receiving or soliciting gifts in a business may give rise to an appearance of impropriety or may raise a potential conflict of interest;
¤ Supervised persons should not accept or provide any gifts or favors that might influence the decisions you or the recipient must make in business transactions involving Thurston Springer, or that others might reasonably believe would influence those decisions;
¤ Modest gifts and favors, which would not be regarded by others as improper may be accepted or given on an occasional basis. Entertainment that satisfies these requirements and conforms to generally accepted business practices also is permissible;
¤ Where there is a law or rule that applies to the conduct of a particular business or the acceptance of gifts of even nominal value, the law or rule must be followed.

Reporting Requirements
¤ Any supervised person who accepts, directly or indirectly, anything of value from any person or entity that does business with or on behalf of Thurston Springer including gifts and gratuities with value in excess of $100 per year must obtain consent from the Compliance Officer before accepting such gift.
¤ This reporting requirement does not apply to bona fide dining or bona fide entertainment if, during such dining or entertainment, you are accompanied by the person or representative of the entity that does business with Thurston Springer.
¤ This gift reporting requirement is for the purpose of helping Thurston Springer monitor the activities of its associated persons. However, the reporting of a gift does not relieve any supervised person from the obligations and policies set forth in this Section or anywhere else in this Code. If you have any questions or concerns about the appropriateness of any gift, please consult the Compliance Officer.

 

Protecting the Confidentiality of Client Information
In the course of investment advisory activities of Thurston Springer, the firm gains access to non-public information about its clients. Such information may include a person's status as a client, personal financial and account information, the allocation of assets in a client portfolio, the composition of investments in any client portfolio, information relating to services performed for or transactions entered into on behalf of clients, advice provided by Thurston Springer to clients, and data or analyses derived from such non-public personal information (collectively referred to as 'Confidential Client Information'). All Confidential Client Information, whether relating to Thurston Springer current or former clients, is subject to the Code's policies and procedures. Any doubts about the confidentiality of information must be resolved in favor of confidentiality.

 

Non-Disclosure of Confidential Client Information
All information regarding Thurston Springer's clients is confidential. Information may only be disclosed when the disclosure is consistent with the firm's policy and the client's direction. Thurston Springer does not share Confidential Client Information with any third parties, except in the following circumstances:
¤ As necessary to provide service that the client requested or authorized, or to maintain and service the client's account. Thurston Springer will require that any financial intermediary, agent or other service provider utilized by Thurston Springer (such as broker-dealers or sub-advisers) comply with substantially similar standards for non-disclosure and protection of Confidential Client Information and use the information provided by Thurston Springer only for the performance of the specific service requested by Thurston Springer.;
¤ As required by regulatory authorities or law enforcement officials who have jurisdiction over Thurston Springer, or as otherwise required by any applicable law. In the event Thurston Springer is compelled to disclose Confidential Client Information, the firm shall provide prompt notice to the clients affected, so that the clients may seek a protective order or other appropriate remedy. If no protective order or other appropriate remedy is obtained, Thurston Springer shall disclose only such information, and only in such detail, as is legally required;
¤ To the extent reasonably necessary to prevent fraud, unauthorized transactions or liability.

 

Employee/Associated Person Responsibilities
All supervised persons are prohibited, either during or after the termination of their employment with Thurston Springer from disclosing Confidential Client Information to any person or entity outside the firm, including family members, except under the circumstances described above. A supervised person is permitted to disclose Confidential Client Information only to such other supervised persons who need to have access to such information to deliver the Thurston Springer services to the client. Supervised persons are also prohibited from making unauthorized copies of any documents or files containing Confidential Client Information and, upon termination of their employment with Thurston, Springer must return all such documents to Thurston Springer. Any supervised person who violates the non-disclosure policy described above will be subject to disciplinary action, including possible termination, whether or not he or she benefited from the disclosed information.

 

Security of Confidential Personal Information
Thurston Springer enforces the following policies and procedures to protect the security of Confidential Client Information:
¤ The Firm restricts access to Confidential Client Information to those supervised persons who need to know such information to provide Thurston Springer services to clients;
¤ Any supervised person who is authorized to have access to Confidential Client Information in connection with the performance of such person's duties and responsibilities is required to keep such information in a secure compartment, file or receptacle on a daily basis as of the close of each business day;
¤ All electronic or computer files containing any Confidential Client Information shall be password secured and firewall protected from access by unauthorized persons;
¤ Any conversations involving Confidential Client Information, if appropriate at all, must be conducted by supervised persons in private, and care must be taken to avoid any unauthorized persons overhearing or intercepting such conversations.

 

Privacy Policy
As a registered investment adviser, Thurston Springer and all supervised persons, must comply with SEC Regulation S-P, which requires investment advisers to adopt policies and procedures to protect the 'nonpublic personal information' of natural person clients. 'Nonpublic information,' under Regulation S-P, includes personally identifiable financial information and any list, description, or grouping that is derived from personally identifiable financial information. Personally identifiable financial information is defined to include information supplied by individual clients, information resulting from transactions, any information obtained in providing products or services. Pursuant to Regulation S-P Thurston Springer has adopted policies and procedures to safeguard the information of natural person clients.

 

Enforcement and Review of Confidentiality and Privacy Policies
The Compliance Officer is responsible for reviewing, maintaining and enforcing Thurston Springer's confidentiality and privacy policies and is also responsible for conducting appropriate employee training to ensure adherence to these policies. Any exception to this policy requires the written approval of the Compliance Officer.

 

Service as an Officer or Director
No supervised person shall serve as an officer or on the board of directors of any publicly or privately traded company without prior authorization by the Compliance Officer or a designated supervisory person based upon a determination that any such board service or officer position would be consistent with the interest of Thurston Springer's clients. Where board service or an officer position is approved, Thurston Springer shall implement a “Chinese Wall” or other appropriate procedure, to isolate such person from making decisions relating to the company’s securities.

Compliance Procedures Reporting Requirements
Every supervised person shall provide initial and annual holdings reports and quarterly transaction reports to the Compliance Officer which must contain the information described below. It is the policy of Thurston Springer that each supervised person must arrange for their brokerage firm(s) to send automatic duplicate brokerage account statements to the Compliance Officer.

 

1. Initial Holdings Report - Every supervised person shall, no later than ten (10) days after the person becomes a supervised person, file an initial holdings report containing the following information:
¤ The title and exchange ticker symbol or CUSIP number, type of security, number of shares and principal amount (if applicable) of each reportable security in which the supervised person had any direct or indirect beneficial interest ownership when the person becomes a supervised person;
¤ The name of any broker, dealer or bank, account name, number and location with whom the supervised person maintained an account in which any securities were held for the direct or indirect benefit of the supervised person; and
¤ The date the report is submitted (by the supervised person). The information submitted must be current as of a date no more than forty-five (45) days before the person became a supervised person.

 

2. Annual Holdings Report
Every supervised person shall, no later than January 31 each year, file an annual holdings report containing the same information required in the initial holdings report as described above. The information submitted must be current as of a date no more than forty-five (45) days before the annual report is submitted.

 

3. Quarterly Transaction Reports
Every supervised person must, no later than thirty (30) days after the end of each calendar quarter, file a quarterly transaction report containing the following information:
With respect to any transaction during the quarter in a reportable security in which the supervised persons had any direct or indirect beneficial ownership:
¤ The date of the transaction, the title and exchange ticker symbol or CUSIP number, the interest rate and maturity date (if applicable), the number of shares and the principal amount (if applicable) of each covered security;
¤ The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);
¤ The price of the reportable security at which the transaction was effected;
¤ The name of the broker, dealer or bank with or through whom the transaction was effected; and
¤ The date the report is submitted (by the supervised person).

 

4. Exempt Transactions - A supervised person need not submit a report with respect to:
¤ Transactions effected for, securities held in, any account over which the person has no direct or indirect influence or control;
¤ Transactions effected pursuant to an automatic investment plan, e.g. a dividend retirement plan;
¤ A quarterly transaction report if the report would duplicate information contained in securities transaction confirmations or brokerage account statements that Thurston Springer. holds in its records so long as the firm receives the confirmations or statements no later than 30 days after the end of the applicable calendar quarter;
¤ Any transaction or holding report if Thurston Springer has only one supervised person, so long as the firm maintains records of the information otherwise required to be reported.

 

5. Monitoring and Review of Personal Securities Transactions: The Compliance Officer, or a designee, will monitor and review all reports required under the Code for compliance with Thurston Springer's policies regarding personal securities transactions and applicable SEC rules and regulations. The Compliance Officer may also initiate inquiries of supervised persons regarding personal securities trading. Supervised persons are required to cooperate with such inquiries and any monitoring or review procedures employed Thurston Springer. Any transactions for any accounts of the Compliance Officer will be reviewed and approved by the President, or other designated supervisory person. The Compliance Officer shall at least annually identify all supervised persons who are required to file reports pursuant to the Code and will inform such supervised persons of their reporting obligations.

 

Initial Certification
All supervised persons will be provided with a copy of the Code and must initially certify in writing to the Compliance Officer that they have: (i) received a copy of the Code; (ii) read and understand all provisions of the Code; (iii) agreed to abide by the Code; and (iv) reported all account holdings as required by the Code.

 

Acknowledgement of Amendments
All supervised persons shall receive any amendments to the Code and must certify to the Compliance Officer in writing that they have: (i) received a copy of the amendment; (ii) read and understood the amendment; (iii) and agreed to abide by the Code as amended.

 

Annual Certification
All supervised persons must annually certify in writing to the Compliance Officer that they have: (i) read and understood all provisions of the Code; (ii) complied with all requirements of the Code; and (iii) submitted all holdings and transaction reports as required by the Code.

 

Further Information
Supervised persons should contact the Compliance Officer regarding any inquiries pertaining to the Code or the policies established herein.

 

Records
The Compliance Officer shall maintain and cause to be maintained in a readily accessible place the following records:
¤ A copy of any Code of Ethics adopted by the Firm pursuant to Advisers Act Rule 204A-1 which is or has been in effect during the past five years;
¤ A record of any violation of Thurston Springer's Code and any action that was taken as a result of such violation for a period of five years from the end of the fiscal year in which the violation occurred;
¤ A record of all written acknowledgements of receipt of the Code and amendments thereto for each person who is currently, or within the past five years was, a supervised person which shall be retained for five years after the individual ceases to be a supervised person of Thurston Springer;
¤ A copy of each report made pursuant to Advisers Act Rule 204A-1, including any brokerage confirmations and account statements made in lieu of these reports;
¤ A list of all persons who are, or within the preceding five years have been, access persons;
¤ A record of any decision and reasons supporting such decision to approve a supervised persons' acquisition of securities in IPOs and limited offerings within the past five years after the end of the fiscal year in which such approval is granted.

Reporting Violations and Sanctions
All supervised persons shall promptly report to the Compliance Officer or an alternate designee all apparent violations of the Code. Any retaliation for the reporting of a violation under this Code will constitute a violation of the Code. The Compliance Officer shall promptly report to senior management all apparent material violations of the Code. When the Compliance Officer finds that a violation otherwise reportable to senior management could not be reasonably found to have resulted in a fraud, deceit, or a manipulative practice in violation of Section 206 of the Advisers Act, he or she may, in his or her discretion, submit a written memorandum of such finding and the reasons therefore to a reporting file created for this purpose in lieu of reporting the matter to senior management. Senior management shall consider reports made to it hereunder and shall determine whether or not the Code has been violated and what sanctions, if any, should be imposed. Possible sanctions may include reprimands, monetary fine or assessment, or suspension or termination of the employee’s employment with the firm.

INSIDER INFORMATION - It is unlawful, under federal and state securities laws for any person to trade and/or recommend trading in securities on the basis of material and nonpublic, or "insider" information. Thurston Springer requires stringent avoidance of the misuse of insider information.

 

"INSIDER" INFORMATION is material, nonpublic information. What constitutes "insider" information is broadly construed by the courts and regulatory bodies. Generally speaking, information is "material" if it has "market significance" in that it is likely to influence reasonable investors, including reasonable speculative investors, in determining whether to trade the securities to which the information relates. For example, information is likely to be "material" if it relates to significant changes affecting such matters as dividends, earnings estimates, write-downs or assets or additions to reserves for bad debts or contingent liabilities, the expansion or curtailment of operations, proposals or agreements involving a merger, acquisition, divestiture or leveraged buy-out, new products or discoveries, major litigation, liquidity problems, extraordinary management developments, public offerings, changes of debt ratings, issuer tender offers, recapitalizations, etc.

 

MISUSE CONSTITUTES FRAUD - Misuse of material and nonpublic, or "insider," information constitutes fraud, a term broadly defined under the securities laws. Fraudulent misuse of "insider" information includes purchasing and/or selling securities on the basis of such information for the account of the firm, an employee, a customer or anyone else, or tipping such information to anyone or using it as a basis for recommending, by way of a research report or otherwise, the purchase or sale of a security.

 

Penalties for trading on or communicating material non-public information are severe. A person can be subject to some or all of the penalties below, even if he or she does not personally benefit from the act that caused the violation. Penalties include: civil injunctions, treble damage, disgorgement of profits, jail sentences, fines for the person who committed the violation, fines for the employer or other controlling person. Persons guilty of fraudulently misusing "insider" information are also subject to dismissal of employment by Thurston, Springer, Miller, Herd & Titak, Inc.

 

Given the potentially severe consequences of any misjudgment, any employee uncertain as to whether any information possessed is "insider" information should contact the Compliance Officer for advice rather than relying on his/her own judgment or interpretation.

 

Brian Sweeney is Thurston Springer’s Chief Compliance Officer.

 

Thurston Springer has implemented a comprehensive information security program that is tailored to our information retention system and the needs of our clients. This includes administrative, technical and physical safeguards appropriate to our size and complexity and the nature and scope of our business.
The program must be designed to ensure the security and confidentiality of customer information; protect against any anticipated threats or hazards to the security or integrity of such information; and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. Our firm’s reputation with its clients has taken considerable time to build and is a vital business asset. The confidence and trust placed in our firm and its employees by our clients is something we value and must endeavor to protect. Should a security breach occur and we have to notify our customers that their personal information may have been compromised our reputation could be irreparably harmed.
To meet the goals of our information security policies, the following standards and procedures have been developed:

 

Physical Security Standards
¤Client information shall not be left unattended in offices, desks or conference rooms unless these areas are secure.
¤Client files, documents or other records shall be stored in locked cabinets or desks when not in use and, in all cases, shall be secured at the end of the business day.
¤Visitors shall not be allowed to walk unescorted in areas where client information is accessible.
¤Records or documents containing client information shall be destroyed or shredded before disposal.
¤Outgoing mail should be properly secured by placing in the mailbox, not in a basket beneath the box.
¤Access restrictions at physical locations containing customer information, such as computer server rooms, records storage areas and off-site record storage facilities shall be utilized. Cleaners will not be permitted in these areas except during office hours when they can be supervised.
Protocols shall be established for “locking down” offices at the close of business and for access to offices after business hours.

 

Employee Security Standards
Employees are required to sign appropriate confidentiality agreements as part of their employment agreements (maintained in the files).
We limit access to client information to those employees that require access to the information to either provide client services or conduct firm operations.
Employees are advised of the prohibition of disclosing client information over the telephone, by fax or by e-mail unless they have clearly identified the person to whom they are communicating as either the client, a fiduciary representative of the client, or a party that needs the information to complete a transaction for the client; i.e., a clearing firm, mutual fund company or other appropriate third party. The only exception to this procedure is if the client (who has been clearly identified) gives the employee instructions to provide the information to an unrelated third party, providing the name and the telephone number, fax number or email address of the party. If the person to whom they are
communicating cannot clearly be identified as the client, then the instructions must be in writing and the signature must be verified as that of the client by comparing it to the signature on file.
We have developed plans for dealing with terminations to ensure that access to client information is discontinued as soon as possible. This includes, but is not limited to, removal of access privileges, computer accounts, and control of keys and return of firm property. Whenever possible, terminated employees receive a briefing on continuing responsibilities for confidentiality and privacy of client information.

 

Electronic Records Security Standards
¤Personal computers with access to client information shall not be left unattended, or in the alternative, screen savers/sleep mode will incorporate password protection.
¤Password protections for access to network PCs, client network accounts, and email user accounts are required and passwords are changed periodically. Users are trained to avoid easy-to-guess passwords, not to divulge their passwords, and not to store passwords where others can access them.
¤An appropriate schedule to back up electronic files is in place. Backup copies shall be tested to ensure that they are usable and are stored securely. Security measures have been implemented to prevent unauthorized access to backup copies.
¤Access to client information on our network is limited to those employees who require such access to service the client or conduct firm operations.
¤Processes, as appropriate, have been developed for requesting, establishing and closing user accounts.
¤The need for encryption technology will be considered in the event that we elect to communicate client information electronically.
¤Home computers and laptops shall be password protected, shall have no client information stored on their hard drives and shall be reported to management if lost or stolen. They shall not be left unattended, even for a short period of time.
¤All retired PCs shall have their hard drives removed and destroyed.
¤We will periodically review and assess security measures designed to prevent unauthorized access to client information on the firm’s web site.

 

Service Provider Arrangements
With respect to third parties with which the firm shares client information or which have access to such information, we will exercise appropriate due diligence in selecting providers and make inquiry as to their security policies and procedures; require, when feasible, service providers by contract to implement appropriate measures designed to meet the objectives of our information security policies; and, where indicated by a risk assessment, monitor service providers to confirm that they have not shares or reused client information in violation of privacy rules.

 

Registered Associates Duties Regarding Products & Services Offerings
*Request training for any product or service in which you do not understand adequately enough to:
*Perform a Customer Specific suitability analysis in connection with any recommended transactions
*Provide a balanced disclosure of both the risks and rewards associated with a particular product
in all types of market conditions
*Provide additional product information aka 'disclosure' for products & services that are deemed complex or risky (such as prospectus, offering statement, memorandum, ADV Part 2

 

 

 

CURRENTLY APPROVED PRODUCTS & SERVICES AND LICENSES REQUIRED

MUTUAL FUNDS
S6 OR S7 and S63
Education Required

FDIC Covered Products (CD's & MMkt)
S6 OR S7 and S63
Education Required

STOCKS (LOCAL LISTINGS & WALLSTREET JOURNAL)
S7 and S63
Education Required

RETIREMENT PLANS
S6 OR S7 and S63
Education Required

LISTED REITS (REAL ESTATE INVESTMENT TRUST)
S7 and S63
Education Required

ETFs (EXCHANGE TRADED FUNDS)
S7 and S63
Education Required

PUBLICLY TRADED LIMITED PARTNERSHIPS
S7 and S63
Education Required

UITs (UNIT INVESTMENT TRUST)
S7 and S63
Education Required

GOVERNMENT AND CORPORATE SECURITIES
S7 and S63
Education Required

FIXED INCOME SECURITIES
S7 and S63

Product-Specific Education Not Required

MUNICIPAL SECURITIES including 529 CSP
S7, S63, S52 for underwriting and trading
Education Required

VARIABLE ANNUITIES = securities & life product
S6 OR S7 and S63 AND Life License w/VA designation beginning 7/1/2012
Education Required

INSURANCE PRODUCTS

VARIABLE ANNUITIES = life and securities product
S6 OR S7 and S63 AND Life License w/VA designation beginning 7/1/2012
Education Required

FIXED ANNUITIES
Life License
Education Required

LONG TERM CARE
LTC License
Education Required

LIFE INSURANCE (TERM WHOLE UNIVERSAL)
Life License
Education Required

VARIABLE LIFE
Life License w/VA designation beginning 7/1/2012
Education Required

EQUITY INDEXED ANNUITIES
Life License
Education Required

HEALTH SAVINGS PLANS
S6 OR S7 and S63
Education Required

 

PRODUCTS AND SERVICES DEEMED TO HAVE ADDITIONAL RISKS OR ARE COMPLEX:

 

INVESTMENT ADVISORY SERVICES    

S7, S63 AND S65 (or S66)

Education Required

OPTIONS                                      

S7 and S63

Education Required

MARGIN ACCOUNTS                        

S7 and S63

Education Required

 

SPECULATIVE SECURITIES & PENNY STOCK
S7 and S63
Education Required

EQUITY LINKED CDs and ANNUITIES
S7 and S63
Education Required

LEVERAGED OR INVERSE ETFs
S7 and S63
Education Required

 

PRINCIPAL PROTECTED NOTES
S7 and S63
Education Required

REVERSE CONVERTIBLES
S7 and S63
Education Required

 

ASSET BACKED SECURITIES
S7 and S63

Education Required

VARIABLE and EQUITY LINKED ANNUITIES
S7, S63 Life Insurance License
Education Required

 

BUSINESS DEVELOPMENT COMPANY
S7 and S63
Education Required

 

PRODUCTS NOT CURRENTLY APPROVED FOR SALE WHETHER SOLICITED OR UNSOLICTED UNTIL APPROVED BY THE FIRM AND PROCEDURES FOLLOWED. ALSO NOTE, IT IS POSSIBLE A "MATERIAL CHANGE IN BUSINESS" MUST BE FILED WITH FINRA.

 

COMMODITIES
DISTRESSED DEBT
LIFE SETTLEMENTS
HEDGE FUNDS
ROYALTY TRUSTS
LIQUIFIED HOME EQUITY
REG D PRIVATE PLACEMENTS
PUBLICLY OFFERED DPPs
UNLISTED REITS
REPOS AND SWAPS
PROMISSORY NOTES
CHURCH BONDS

 

It may be possible that we are holding products that are inherited by way of transfers in or products sold years ago. If in the client's best interest due to a lack of liquidity, taxation, or any other legitimate reason, we may have such products in current client accounts.

 

I understand that the Registered Representative Manual and/or Investment Adviser Policies and Procedures Manual provided to me as an associated person of Thurston Springer address regulatory responsibilities and requirements to which I must adhere, as well as any internal policies and procedures with which I must also be in compliance. I understand further that changes to the content of the manuals will be made from time and that I have an on-going responsibility to remain current with the then-operative Manual.

I agree to initially read the entire Manuals as soon as possible after receipt, and understand that I am to direct any questions I may have concerning the material to my Supervising Principal or Compliance. I acknowledge that it is my responsibility to have a reasonable understanding of all rules and regulations that come from our regulators that direct my behavior as a registered representative of Thurston Springer. I will continue to refer to the Manual, and to our regulators’ Manuals/Rules & Regulations to ensure that I am acting in a fully compliant manner at all times, with both the regulatory requirements and with any internal policies and procedures issued by Thurston Springer.

I understand that any violation of provisions of the Registered Representative Compliance Manual and/or the Investment Adviser Policies and Procedures Manual, or of any directives issued by Thurston Springer, or of any of the rules promulgated by any regulatory agency may subject me to internal disciplinary action and/or termination, as well as civil, criminal and/or regulatory sanctions.

 

Regulator and informational websites:
www.finra.org