# INVESTORS BROKERAGE OF TEXAS, LTD. X-17A-5 (2021-03-17) — Broker-dealer annual report - Company: INVESTORS BROKERAGE OF TEXAS, LTD. - Form: X-17A-5 - Filed: 2021-03-17 - Period: 2020-12-31 - Accession: 0000710858-21-000002 - CIK: 710858 - File #: 8-28644 - Material weakness: No - Auditor: Hartgraves Accounting & Consulting, LLC - Auditor location: Dallas, TX - Contact: Timothy R Kohn - Phone: 2547593718 - Email: admin@hartgravesllc.com - Website: hartgravesllc.com - Signed by: Timothy R Kohn (Managing Principal) Original filing: https://www.sec.gov/Archives/edgar/data/710858/000071085821000002/auditedx17a.pdf --- {0}------------------------------------------------ UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours erresoonse ...... 12.00 | SEC FILE NUMBER | |-----------------| | 8-28644 | **FACING PAGE Information Required of Brokers and Dealers Pursuant to Section** 17 **of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | REPORT FOR THE PERIOD BEGINNING 0 1/01 /20
AND ENDING 12/31 /20 | | ------- | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|---------|---------------------------------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME oF BROKER-DEALER: Investors Brokerage of Texas, Ltd
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: {Do not use P.O. Box No.) | | | OFFICIAL USE ONLY
FIRM I.D. NO. | | | | | | | | | 225 South 5th Street | | | | | | | (No. and Street) | | | | | Waco | TX | | 76701 | | | (City) | (State) | | (Zip Code) | | | Joseph K. Brook&
INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report•
Hartgraves Accounting & Consulting, LLC
325 N. St. Paul Street, Suite 3100 Dallas | B. ACCOUNTANT IDENTIFICATION
--------
(Name - if individual, state last, first, middle name) | TX | 254-759-3708
(Area Code - Telephone Number)
75201 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE:
!certified Public Accountant
B
Public Accountant
Accountant not resident in United States or any of its possessions. | FOR OFFICIAL USE ONLY | | | | *•Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* > **Potential persons who are to respond to the collection of information contained In this form are not required to respond unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ # **OATH OR AFFIRMATION** | ------
•
my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
Investors Brokerage of Texas, Ltd | _______ | | _____
, as | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------|----------------------------------------------------------| | of December 31, | , 20 20 | | , are true and correct. I further swear (or affirm) that | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account
classified solely as that of a customer, except as follows: | | | | | | | | | | | | Managing Principal | | | This report•• c
ains (check all applicable boxes):
@ (a) Facing Page.
@ (b) Statement of Financial Condition.
12] (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
@ ( d) Statement of Changes in Financial Condition.
@ {e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
D {f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
~
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
D (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule l 5c3-l and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l 5c3-3.
0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
consolidation.
@ (1)
An Oath or Affirmation.
@ (m) A copy of the SIPC Supplemental Report.
@ (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | | Title
DAWN JONES
NeT.a.AV fl'U LIC
STATE OF TEXAS
MY COMM. EXP. 11/30/24
NOTARY ID 12622209·6 | | {2}------------------------------------------------ # **INVESTORS BROKERAGE OF TEXAS, LTD.** (A Subsidiary of lnsurors.com, Inc.) Report Pursuant to Rule 17a-5(d) December 31, 2020 {3}------------------------------------------------ # **INVESTORS BROKERAGE OF TEXAS, LTD.** {A Subsidiary of lnsurors.com, Inc.) ### TABLE OF CONTENTS Page | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | |---------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|----| | STATEMENT OF FINANCIAL CONDITION | | 3 | | STATEMENT OF INCOME | | 4 | | STATEMENT OF CHANGES IN PARTNERS' CAPITAL | | 5 | | STATEMENT OF CASH FLOWS | | 6 | | NOTES TO FINANCIAL STATEMENTS | | 7 | | SUPPLEMENTAL INFORMATION: | | | | Schedule I: | Computation of Net Capital Under Rule 15c3-1
of the Securities and Exchange Commission | 12 | | Schedule II: | Computation for Determination of Reserve
Requirements Under Rule 15c3-3 of the
Securities and Exchange Commission | 14 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON MANAGEMENT'S EXEMPTION REPORT | | 16 | {4}------------------------------------------------ # **Accounting & Consulting, LLC** #### **Report of Independent Registered Public Accounting Firm** To the Board of Directors of Investors Brokerage of Texas, Ltd. #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Investors Brokerage of Texas, Ltd. (the "Company") as of December 31, 2020, and the related statements of operations, changes in partners' capital and cash flows for the year then ended, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Supplemental Information** The supplementary information contained in Schedule I, Computation of Net Capital Under Rule 15c3-1 under the Rules of the Securities and Exchange Commission have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The Supplemental Information is the responsibility of the Company's management. Our audit procedures included determining whether the Supplemental Information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the Supplemental Information. In forming our opinion on the Supplemental Information, we evaluated whether the Supplemental Information, including its form and content, is presented in conformity with 17 C.F.R. § 240.17a-5. In our opinion, the supplementary {5}------------------------------------------------ information contained in Schedule I, Computation of Net Capital Under Rule 15c3-1, all under the Rules of the Securities and Exchange Commission are fairly stated, in all material respects, in relation to the financial statements asa whole. We have served as the Company's auditor since 2019. Dallas, Texas March 16, 2021 {6}------------------------------------------------ # INVESTORS BROKERAGE OF TEXAS, LTD. (A Subsidiary of lnsurors.com, Inc.) Statement of Financial Condition December 31 , 2020 ### ASSETS | Cash and cash equivalents
Deposit with clearing organization
Receivable from clearing organization
Prepaid expenses | \$
540,614
100,000
38,841
1,000 | |------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------| | Total Assets | 68Q,455
~ | | LIABILITIES AND PARTNERS' CAPITAL | | | Liabilities:
Accounts payable and accrued liabilities | \$
42,988 | | Total liabilities | 42,988 | | Partners' capital | 637,467 | | Total Liabilities and Partners' Capital | \$
680,455 | {7}------------------------------------------------ # INVESTORS BROKERAGE OF TEXAS, LTD. (A Subsidiary of Insurers.com, Inc.) Statement of Income For the Year Ended December 31 , 2020 | Revenues: | | |------------------------------------|----------------| | Commissions income | \$
905,941 | | Advisory fee income | 151,746 | | Distribution fees | 373,736 | | Group Annuity income | 138,429 | | Interest | 5,573 | | Other revenue | 6784 | | Total revenues | 1,582,209 | | Expenses: | | | Commission expense | 824,269 | | Employee compensation and benefits | 158,620 | | Lease and other shared expenses | 42,732 | | Clearing fees | 36,012 | | Communications | 3,176 | | Professional fees | 13,350 | | Dues and subscriptions | 21,744 | | Other expenses | 31 ,265 | | Total expenses | 1,131
,168 | | Net Income | \$
451 ,041 | {8}------------------------------------------------ ## INVESTORS BROKERAGE OF TEXAS, LTD. (A Subsidiary of lnsurors.com, Inc.) Statement of Changes in Partners' Capital For the Year Ended December 31 , 2020 | Balance at December 31, 2019 | \$
516,426 | |------------------------------|---------------| | Dividends | {330,000) | | Net income | 451,041 | | Balance at December 31, 2020 | \$
637,467 | {9}------------------------------------------------ ### INVESTORS BROKERAGE OF TEXAS, LTD. (A Subsidiary of lnsurors.com, Inc.) Statement of Cash Flows For the Year Ended December 31 , 2020 | Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
(Increase) decrease in assets: | \$
451,041 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------| | Receivable from clearing organizations | (38,602) | | Increase (decrease) in liabilities:
Accounts payable and accrued expenses | (23,471
) | | Net cash provided (used) by operating activities | 388,968 | | Cash flows from financing activities:
Dividends paid | (330,000) | | Net cash provided (used) by financing activities: | | | Net decrease in cash and cash equivalents | 58,968 | | Cash and cash equivalents at beginning of year | 481 ,646 | | Cash and cash equivalents at end of year | \$
540,614 | {10}------------------------------------------------ # INVESTORS BROKERAGE OF TEXAS, LTD. (A Subsidiary of lnsurors.com, Inc.) Notes to Financial Statements December 31, 2020 ### Note 1 - Summary of Significant Accounting Policies #### **Nature of Operations and Basis of Presentation** Investors Brokerage of Texas, Ltd (the "Company") is a limited partnership organized under the laws of the State of Texas. The Company is a broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company operates under SEC Rule 15c3-3(k)(2)(ii) whereby a clearing broker-dealer performs clearing functions for all broker-dealer transactions with customers and brokers and dealers on a fully disclosed basis and is considered a "Non-covered firm" for those activities conducted outside of the Company's clearing arrangement. The Company promptly transmits all customer funds and securities. The Company also has agreements for clearing functions with other various mutual funds and variable annuity brokers. The majority of the Company's customers are located in the central and south Texas areas. The Company receives commissions on trades that are facilitated through the clearing broker-dealer and other brokers. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles and to general practices within the broker-dealer industry. The accompanying financial statements include only the accounts of the Company. The general partner (0.1%) is lnsurors General Partner, LLC, which is a wholly-owned subsidiary of the limited partner (99.9%), lnsurors.com, Inc. (the "Parent").The Parent is owned by individual shareholders. The Company carries no customer cash accounts, margin accounts or credit balances and promptly transmits all customer funds and delivers all securities received in connection with its activities to its clearing broker, Hilltop Securities in Dallas, Texas. #### **Use of Estimates** Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. ### **Revenue Recognition** Revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. {11}------------------------------------------------ # INVESTORS BROKERAGE OF TEXAS. LTD. (A Subsidiary of lnsurors.com. Inc.) Notes to Financial Statements December 31 . 2020 # Note 1 - Summary of Significant Accounting Policies, continued #### **Commission Revenue** Commission revenue represents sales commissions generated by advisors for their clients' purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. The Company is the principal for commission revenue, as it is responsible for the execution of the clients purchases and sales, and maintains relationships with the product sponsors. Advisors assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. The Company generates two types of commission revenue: sales-based commission revenue that is recognized at the point of sale on the trade date and trailing commission revenue that is recognized over time as earned. Sales-based commission revenue varies by investment product and is based on a percentage of an investment product's current market value at the time of purchase. Trailing commission revenue is generally based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and is recognized over the period during which services, such as on-going support, are performed. As trailing commission revenue is based on the market value of clients' investment holdings, this variable consideration is constrained until the market value is determinable. ### **Advisory Revenue** Advisory revenue represents fees charged to advisors· clients' accounts on the respective advisory platform. The Company provides ongoing investment advice as well as brokerage and execution services on transactions, and performs administrative services for these accounts. This series of performance obligations transfers control of the services to the client over time as the services are performed. This revenue is recognized ratably over time to match the continued delivery of the performance obligations to the client over the life of the contract. The advisory revenue generated from the respective advisory platform is based on a percentage of the market value of the eligible assets in the clients· advisory accounts. As such, the consideration for this revenue is variable and an estimate of the variable consideration is constrained due to dependence on unpredictable market impacts on client portfolio values. The constraint is removed once the portfolio value can be determined. The Company provides advisory services to clients on its respective advisory platform through the advisor. The Company is the principal in these arrangements and recognizes advisory revenue on a gross basis, as the Company is responsible for satisfying the performance obligations and has control over determining the fees. Advisors assist the Company in performing its obligations. Fees are billed on a quarterly basis based on the account's value at the end of the quarter. Advance payments, if received, are deferred and recognized during the periods for which services are provided. ### **Distribution Fees** ### Mutual Funds, Insurance and Annuity Products The Company earns revenue for selling mutual funds, fixed variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not at the time of sale because it is variable constrained due to factors outside the Company's control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). The revenue will not be recognized until it is probable that a significant reversal will not occur. {12}------------------------------------------------ #### INVESTORS BROKERAGE OF TEXAS, LTD. {A Subsidiary of lnsurors.com, Inc.) Notes to Financial Statements December 31 , 2020 #### Note 1 - Summary of Significant Accounting Policies, continued #### **Interest Income** The Company earns interest income from client margin accounts and cash equivalents, net of operating expense. ## **Income Taxes** The Company is a qualified subchapter S subsidiary. The Parent has been approved to pay federal income taxes with an S corporation election. The Company and its affiliates are included in the consolidated federal income tax return filed by the Parent. Income taxes are calculated and paid by the shareholders of the Parent. Therefore, no provision or liability for federal income taxes has been included in the financial statements. The Company is subject to income taxes in the State of Texas and files a combined return with the Parent. The Company's federal and state income tax returns generally remain subject to examination by the Internal Revenue Service and state authorities for three to four years from the date the return is filed. #### Note 2 - Net Capital Requirements Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2020, the Company had net capital of \$636,467 and net capital requirements of \$50,000. The Company's ratio of aggregate indebtedness to net capital was 0.07 to 1. #### Note 4 - Retirement Plan The Company participates in the retirement plan (the "Plan") of a related company which *covers* substantially all employees. The Plan has a 401 (k) provision which allows employees with at least one year and 1,000 hours of service to make contributions. Employee contributions are matched up to 4% of participating compensation. Contributions exceeding 4% are at the discretion of the Plan sponsor. The Company made contributions of \$30,843 to the Plan for the year ended December 31, 2020. #### Note 5 - Related Partv Transactions The Company has an expense sharing agreement with a related entity which covers rent, accounting services and equipment. The related party is in position to, and in the future may, influence the amount of these expenses to the Company. Following is a summary of the expenses incurred for 2020 which are included in lease and other shared expenses on the statement of income: | Premise lease | \$
35,016 | |---------------------------|--------------| | Equipment and maintenance | 2,496 | | Accounting services | 5,220 | | Total | \$
42.732 | {13}------------------------------------------------ ### INVESTORS BROKERAGE OF TEXAS, LTD. {A Subsidiary of Insurers.com, Inc.) Notes to Financial Statements December 31 , 2020 #### Note 6 - Commitments and Contingencies Included in the Company's clearing agreement with its clearing broker-dealer is an indemnification clause. This clause relates to instances where the Company's customers fail to settle security transactions. In the event this occurs, the Company will indemnify the clearing broker-dealer to the extent of the net loss on any unsettled trades. At December 31, 2020, management of the Company had not been notified by the clearing broker-dealer, nor were they otherwise aware, of any potential losses relating to this indemnification. #### Note 7 - Concentration Risk The Company has maintained balances in deposit accounts at a financial institution in excess of federally insured limits. {14}------------------------------------------------ Supplemental Information Pursuant to Rule 17 a-5 of the Securities Exchange Act of 1934 For the Year Ended December 31, 2020 {15}------------------------------------------------ # **Schedule** I | INVESTORS BROKERAGE OF TEXAS, LTD. | |----------------------------------------------| | (A Subsidiary of lnsurors.com, Inc.} | | Computation of Net Capital Under Rule 15c3-1 | | of the Securities and Exchange Commission | | As of December 31 , 2020 | | | ### **COMPUTATION OF NET CAPITAL** | Total partners' capital qualified for net capital | \$
637,467 | |--------------------------------------------------------------------------------------------------------------------------------------------|---------------| | Add:
Other deductions or allowable credits | | | Total capital and allowable subordinated liabilities | 637,467 | | Deductions and/or charges
Non-allowable assets: | 1 000 | | Net capital before haircuts on securities positions
Haircuts on securities (computed, where applicable,
pursuant to Rule 15c3-1 (D): | 636,467 | | Net capital | \$
636,467 | | AGGREGATE INDEBTEDNESS | | | Items included in statement of financial condition
Accounts payable and accrued liabilities | \$
42,988 | | Total aggregate indebtedness | \$
42.988 | {16}------------------------------------------------ # **Schedule I (continued)** #### **COMPUTATION OF BASIC NET CAPITAL REQUIREMENT** | Minimum net capital required (6 2/3% of total
aggregate indebtedness) | \$
2,865 | |-----------------------------------------------------------------------------------------------------------|---------------| | Minimum dollar net capital requirement of
reporting broker or dealer | \$
50.000 | | Minimum net capital requirement {greater of two
minimum requirement amounts) | \$
50.000 | | Net capital in excess of minimum required | \$
586.467 | | Net capital, less the greater of 10% of aggregate indebtedness or 120%
of minimum net capital required | \$
576.467 | | Ratio: Aggregate indebtedness to net capital | 0.07 tQ 1 | ### **RECONCILIATION WITH COMPANY'S COMPUTATION** There was no material difference in the computation of net capital under Rule 15c3-1 from the Company's computation. {17}------------------------------------------------ # **Schedule** II # INVESTORS BROKERAGE OF TEXAS, LTD. {A Subsidiary of lnsurors.com, Inc.) Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission As of December 31 , 2020 #### **Exemptive Provisions** The Company has claimed an exemption from Rule 15c3-3 under section (k)(2)(ii) and is considered a "Non-Covered Firm" relying footnote 74 to SEC Release 34-70073, in which all customer transactions are cleared through another broker-dealer on a fully disclosed basis or promptly transmits all customer funds and securities or the Company limits its business activities exclusively to: (1) acting as a mutual fund retailer (2) acting as a broker or dealer selling variable life insurance or annuities (3) solicitor of time deposits in a financial institution (4) providing investment advisory services. Company's clearing firm: Hilltop Securities Inc. {18}------------------------------------------------ Report of Independent Registered Public Accounting Firm On Management's Exemption Report Required by SEC Rule 17a-5 For the Year Ended December 31, 2020 {19}------------------------------------------------ # **Accounting & Consulting, LLC** **Report of Independent Registered Public Accounting Firm** To the Board of Directors of Investors Brokerage of Texas, Ltd. We have reviewed management's statements, included in the accompanying Exemption Report, in which Investors Brokerage of Texas, Ltd. (the Company) stated that: - 1. The Company identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3: Paragraph (k)(2)(ii) (the exemption provisions), and the Company stated that it met the identified exemption provisions throughout the most recent fiscal year without exception; - 2. The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to acting as a mutual fund retailer, acting as a broker or dealer selling variable life insurance or annuities, solicitor of time deposits in a financial institution and providing investment advisory services; and - 3. The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscriptionway basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3), throughout the most recent fiscal year without exception. The Company's management is responsible for its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provisions and that the Company's other business activities were limited to acting as a mutual fund retailer, acting as a broker or dealer selling variable life insurance or annuities, solicitor of time deposits in a financial institution and providing investment advisory services and (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription-way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in 17 C.F.R. § 240.15c3-3 and 17 **C.F.R.** § **240.17a-5.** t~A~~✓ ~~ **LLf3** March 16, 2021 325 N. St. Paul Street, Suite 3100 (214) 738-1998 w,vvv.hartgravesllc.com Dallas, TX 75201 admin@hartgravesllc.com {20}------------------------------------------------ # **Investors Brokerage of Texas, Ltd. Exemption Report** Investors Brokerage of Texas, Ltd. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claimed an exemption from 17 C.F.R. §240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3(k)(2)(ii). - (2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3(k) throughout the most recent fiscal year without exception. - (3) The Company is considered "Non-Covered Firm" exempt from 17 C.F.R. §240.15c3-3 and is filing an Exemption Report relying on footnote 7 4 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to: (1) acting as a mutual fund retailer (2) acting as a broker or dealer selling variable life insurance or annuities (3) solicitor of time deposits in a financial institution (4) providing investment advisory services. - (4) The Company (1) did not directly or indirectly receive, hold or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3), throughout the most recent fiscal year without exception. I, Tim Kohn, swear (or affirm) that, to my best knowledge and belief, this exemption report is true and correct. Regards, Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.