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Statements of Financial Condition

For a copy of our current statement of financial condition, please email us at financials@firstsw.com.

Fee Disclosures

The following fees may apply to your account effective August 1, 2013:

Money Market

   
Check Reorders: $6
Rush Orders for Checks: $22
Stop Payment: $32
Returned Checks: $35
Copies of Cancelled Paid Checks: $20
Check Writing Termination: $20
Gold Debit Card - Annual Fee: $40
   
Account Transfer/Deliveries between Broker Dealers or other Agents/Mutual Fund Companies
Account Transfer Fee (ACAT):  $75
Delivery of Book Entry Securities (per Issue): $25  plus any depository fees at cost
Receipt/Delivery of Foreign Securities: $100  plus any custodian fees (other fees may apply)
     
General    
Wire Transfer - U.S. Bank: $20
Wire Transfer - Foreign Bank: $50
Prepay Fee:  $20  plus interest at prevailing margin rate
Incoming Wire Transfer Fee $7  
Request for Fed Reference Number Fee $5  

Cleared Check Copy

$20  

Stop Payment

$32  

Returned Deposit Item

$35  

Returned Outgoing Wire Transfer Fee

$20  
     
Overnight Delivery - Minimum Fees    
Regular Next Day: $25
Priority Next Day:  $30
Saturday Delivery: $40
Foreign Address:  $60  minimum
     
Certificates    

Bulletin Board/OTC Pinks Deposit Fee

$200 Certificate, DWAC and DRS shares per deposit plus any pass through fees*

Non-Equity Physical Processing Fee

$150 per item plus any pass through fees*

Non-DTCC Eligible Receipt/Delivery

$100  per item plus any pass through fees*

RVP/DVP Fee

$50 per transaction plus any pass through fees*

Transfer Fee

$50  

DRS Deposit/Withdrawal

$50 per certificate plus any pass through fees*

DWAC Deposit/Withdrawal

$50 per event plus any pass through fees*

Canadian Deposit 

$150  per certificate plus foreign carrier fee

Foreign Deposit

$250 per certificate plus foreign carrier fee

Canadian Settlement 

$50 per settlement plus any pass through fees* 

Foreign Settlement 

$100 per settlement plus any pass through fees*

Transfer Agent Fee

  varies by Transfer Agent

DTCC Deposit

$12  

DTCC Restricted Deposit

$90  

DTCC Legal Deposit

$50  

DTCC Withdrawal by Transfer

$500 per request for physical certificates (includes accounts coded automatic transfer)

DTCC/TA Reject

$125 per reject
DTCC DRS Reject $75 per reject

DTCC New York Window Settlement

$50 plus any courier fees

DTCC Envelope Settlement Service

$35  
     
Other Fees    

Annual Safekeeping Fee

$50 per position
Bond Redemptions: $25  

Mandatory Reorganizations/Name Changes

$30  
Voluntary Reorganizations: $95 per instruction
 
Traditional IRA
Account Opening:  $25
Annual Fee:  $40
Account Termination:   $60
   
Other Retirement Accounts
Fees can vary by plan type.  Please contact the IRA department.
 
 
Inactive Account Fee: $50
   
 *Pass through fees may include, but are not limited to, charges from DTCC, transfer agents, third party custodians and foreign exchanges.  
Other fees may apply.

 

Business Continuity Plan

Business Continuity Plan Summary

INTRODUCTION

First Southwest Holdings, LLC., through its operating subsidiaries, (collectively, “FirstSouthwest”) is a leading national financial services firm engaged in public finance, corporate finance, housing finance, underwriting, investment management, financial consulting, arbitrage rebate and the provision of securities brokerage, trading, finance and clearing services among other services. Based in Dallas, Texas, FirstSouthwest has numerous offices located throughout the United States.

We have developed a business continuity plan (the “Plan”) with a view to crisis prevention and, in the event of a business interruption, swift and effective assessment, management and recovery. The Plan incorporates regular testing, monitoring and maintenance to sustain the technology, systems and procedures in place.

The following summary of First Southwest’s Plan outlines the firm’s capabilities, strategy for responding to a business interruption, and commitment to sustaining and updating its capabilities going forward.

DATA PROCESSING AND BACKUP CAPABILITIES

Protection of data and redundancy of systems are key considerations in designing and implementing First Southwest’s plan. FirstSouthwest utilizes industry leading vendors, servers, storage and networking technologies.   Computer systems, endpoint devices, and data storage equipment are maintained in secure environments with safeguards against intrusion and environmental disruption. These safeguards include monitoring systems that provide alerts of outages and environmental changes in our data center.

First Southwest’s system creates mirror images of trade and operating data in remote locations and integrates a daily backup protocol for further data protection. All critical file server data is backed up nightly at the corporate office. Branch office data that is physically stored on a server in the branch office is replicated throughout the day to a corporate server.  Smaller branch offices have their data hosted on a server physically located in the corporate office.  The branch office data hosted at corporate, as well as the data replicated from branch offices, is backed up using daily incremental and weekly full backups.  The weekly full backups are copied to tape and sent offsite for storage.

FirstSouthwest utilizes a storage-area network (SAN) that allows it to consolidate its disk space in high-capacity, high-performance cabinets. This technology allows FirstSouthwest to replicate critical data from the corporate office to the firm’s primary alternate data center in near-real time. The replication disks are located at the alternate site and the process is performed over the company’s private network.

BUSINESS CONTINUATION STRATEGY

Our Chief Information Officer has assumed responsibility for maintaining and updating the firm’s Plan. This charge is carried out with the assistance of senior management, department and office heads and key vendors. In developing the Plan, we conducted an inventory of existing systems while considering the potential impact of various crisis scenarios and the specific needs of the firm’s various business sectors and diverse customer base. As part of this analysis, we evaluated the specific challenges posed by a catastrophic loss to our facilities, information technology, personnel and communications systems.

First Southwest’s Plan incorporates numerous redundancies and geographical dispersion that insulate the firm and its customers from business interruption. The firm’s strategy includes having redundant systems in primary and alternate sites that are active at all times, permitting rapid recovery of operations and access to data. This strategy also includes the creation of mirror images of data in remote locations, accessible from multiple venues and recoverable within minutes or hours.

Mainframe Recovery

FirstSouthwest has analyzed its system usage and capability, and identified its mission-critical systems. While FirstSouthwest does not host mainframe systems on site, they are an important part of the firm’s operations and have been given significant attention. We have reviewed the recovery plans of each of our mission-critical service providers and have found them to be sufficient and reliable. We participate in our service providers’ testing schedules, and work closely with them to ensure the compatibility of our respective systems, especially as additional measures are implemented.

Communications Recovery

Telecommunications

Voice Services:

In the event of a telecommunications failure, FirstSouthwest is able to re-route all toll free and direct dial lines to our alternate recovery sites. Predefined contingency configurations have been supplied to the firm’s telephone service providers with implementation instructions in the event of a failure. This means that the firm’s telephone numbers can be re-routed in near real time. Also, with all FirstSouthwest offices on VOIP phones, we can now exercise the backup Session Initiated Protocol (SIP) circuit the event when the primary corporate SIP circuit has a failure. Basic local and Long Distance (LD) for both incoming and outgoing phone calls will continue to function until the primary SIP circuit is restored.

Data Circuits:

FirstSouthwest implemented a new telecommunications infrastructure in 2007, designed to facilitate business continuity. First Southwest’s private network provides primary connectivity to the corporate office, and secondary connectivity to the alternate site. Data connections from external vendors have backup connectivity through dedicated secondary circuits in the alternate site or through re-routing the service in case of an outage.

FirstSouthwest has placed high priority to preserve and recover Internet and e-mail access in the event of a business interruption. The firm’s corporate office has Internet service from two different service providers. In the event of an outage from one provider’s network, the capacity of the remaining provider is sufficient to run the firm’s critical business functions. In addition to redundant providers, we use a pair of “next generation” firewalls in a redundant configuration in our production and Disaster Recovery (DR) sites. Our DR site has a redundant and diverse Internet connection with a separate “next generation” firewall for protection. These redundant/diverse capabilities are active at all times in both production and DR sites.

Alternate Communications

Customers and Third Parties:

FirstSouthwest has compiled and regularly updates emergency contact information for critical vendors, service providers and key banking relationships. This information is available at all times in each of the firm’s disaster recovery sites. In addition, we have compiled information relating to each organization’s service capabilities, in the event alternate services providers are needed.

In the event of loss of communication in the corporate office, as discussed above, FirstSouthwest has the ability to selectively re-route toll-free numbers and local numbers for both telephone and facsimile to an alternate site, permitting swift restoration of communication with customers and business partners. In addition, customers can make use of mobile numbers to contact FirstSouthwest personnel. Independent Internet access in the corporate office and alternate sites permits FirstSouthwest personnel to communicate with customers and others via e-mail.

Employees:

In the event of a catastrophic loss to the corporate office, key employees such as executive officers, department heads key technical and operations personnel will be contacted directly and informed of the nature of the loss, the status of the event and any special instructions. All information technology staff members carry cellular telephones that are e-mail enabled. In the event of a business interruption, this will be the primary means of locating and notifying critical disaster recovery staff.

The firm’s employees can obtain information and updates by calling a designated toll-free number to receive messages from an automated voice attendant with recorded messages that will be updated as necessary.

Trading and Clearing Services Recovery

FirstSouthwest requires access to systems to execute, clear and settle trades. These systems, as well as a description of alternate methods to access these systems in the event of a significant loss to the corporate office, are discussed below.

  • The Firm’s has contracted with a software vendor to provide the Firm’s primary customer maintenance and trade entry system. FirstSouthwest has installed a redundant line for this service in the Firm’s alternate site. In addition, the vendor has primary and alternate sites which are both accessible from First Southwest’s sites.
  • Depository Trust Clearing Corporation (“DTCC”) provides clearance, settlement, custody and information services for First Southwest’s equity, debt and mortgage-backed securities transactions First Southwest has installed a duplicate line to the alternate site, which will permit swift re-routing of the service.
  • The Firm settles trades in government securities for FirstSouthwest with a bank. We can fully restore our communications and services with this bank by re-routing through independent lines to the alternate site.

Facility Protection

First Southwest’s corporate office and alternate recovery sites are located in buildings protected at all times by security guards, cameras and controlled access. In addition, First Southwest has installed in its primary and alternate recovery sites numerous fire protection measures that exceed building code requirements, and the firm participates in the fire drills and emergency evacuation tests conducted by building management.

FirstSouthwest has acquired a generator as an alternate power supply in the event of a disaster. The generator has the capacity to run the firm’s computer room, trading desk, operations department and certain other of the firm’s critical systems necessary to process and clear trades. Fuel is stored onsite for the generator to run for 24 hours. The firm has a fuel provider on retainer to supply additional fuel as needed.

Ongoing Testing

First Southwest has implemented a testing schedule for our business continuity systems, and we participate in the tests performed by our service providers. Whenever possible, we coordinate our testing schedule with that of our service providers to ensure proper functioning from each firm’s recovery site.

LOOKING AHEAD

FirstSouthwest will continue to evaluate its systems and procedures, including monitoring industry standards and available technological advances, to continue to improve its Plan.

Jeffrey Hammill

Managing Director, CIO


 

Margin Disclosure Statement

First Southwest Company and/or Broker-Dealers For Which it Clears Transactions

This document is being provided to you to give you some basic facts about purchasing securities on margin and to alert you to the risk with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review your Customer Margin and Short Agreement. Consult your broker regarding any questions or concerns you may have with your margin account(s).

When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price. If you choose to borrow funds, you will open a margin account. The securities purchased serve as collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, either the clearing firm of the introducing broker can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts, in order to maintain the required equity in the account.

It is important that you fully understand the risks involved in trading securities on margin. These risks include, but are not limited to, the following:

1. You can lose more funds than you deposit in the margin account. A decline in the value of securities that are purchased on margin may require you to provide additional funds to avoid the forced sale of those securities or assets in your account(s).

2. The clearing firm or the introducing broker can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements or higher “house” requirements, the clearing firm or the introducing broker can sell the securities or other assets in any of your account(s) to cover the margin deficiency. You also will be responsible for any short fall in the account after such a sale.

3. The clearing firm or the introducing broker can sell your securities or other assets without contacting you. Some investors mistakenly believe that a clearing firm or an introducing broker must contact them for a margin call to be valid and that securities or other assets held in their accounts cannot be liquidated to meet the call unless the investor has been contacted first. This is not the case. Most firms will attempt to notify the customer of a current margin call but are not required to do so. However, even if a firm has contacted a customer and provided a specific date by which the customer can meet a margin call, the firm can still take necessary steps to protect its financial interests, including immediately selling the securities without prior notice to the customer.

4. You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, the clearing firm or the introducing broker has the right to decide which security to sell in order to protect its interests.

5. The firm can increase its “house” maintenance margin requirements at any time and is not required to provide you advance written notice. These changes in firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause a liquidation or sellout of securities in your account(s).

6. You are not entitled to an extension of time on a margin call. While an extension of time to meet margin requirements may be available to customers under certain circumstances, a customer does not have the right to the extension.

Disclosure of SEC-Required Order of Execution Information

Partially Called Securities

The lottery process for a partial call, pre-refund or debasement is a random process designed to allocate called securities on a fair and impartial basis. The lottery process is based on a mathematical formula to randomly select accounts for allocation. For calls that are deemed favorable to the security-holder, firm accounts, as well as accounts of associated persons of broker-dealers are excluded until all client positions have been allocated. A favorable call occurs when the call price exceeds the current market price reflected in the back office application. If no price is available in the back office system, the call is presumed favorable. If a call is not deemed favorable to the security-holder, firm and associated persons' accounts are included in the lottery. Additional details concerning the lottery process will be provided upon request.


 

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