# TCW FUNDS DISTRIBUTORS LLC X-17A-5 (2025-02-28) — Broker-dealer annual report - Company: TCW FUNDS DISTRIBUTORS LLC - Form: X-17A-5 - Filed: 2025-02-28 - Period: 2024-12-31 - Accession: 0000737259-25-000002 - CIK: 737259 - File #: 8-31114 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte & Touche - Auditor location: Los Angeles, CA - Contact: Gayle Espinosa - Phone: 213-244-0916 - Email: gayle.espinosa@tcw.com - Website: tcw.com - Signed by: Gayle Espinosa (Managing Director, FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/737259/000073725925000002/tfdsecfiling2024.pdf --- {0}------------------------------------------------ #### **TCW FUNDS DISTRIBUTORS LLC (SEC. I.D. No. 8-31114)** ## **FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2024, AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** **\*\*\*\*\*\*\*** **Filed pursuant to Rule 17a-5(e)(3) as a PUBLIC DOCUMENT.** {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: ϯϮϯϱͲϬϭϮϯ Expires: EŽǀ͘ϯϬ͕ϮϬϮϲ Estimated average burden hours per response: # **ANNUAL REPORTS FORM X-17A-5 PART III** SEC FILE NUMBER **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 01/01/24 12/31/24 MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** #### NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TCW Fund Distributors LLC TYPE OF REGISTRANT (check all applicable boxes): ܆ Broker-dealer ܆ Security-based swap dealer ܆ Major security-based swap participant ܆ Check here if respondent is also an OTC derivatives dealer ■ ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) #### \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 515 South Flower Street | | (No. and Street) | | | |--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|------------| | Los
Angeles | California
_____________________________________________________________________________________ | | 90071 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Gayle
Espinosa | 1-213-244-0916
_____________________________________________________________________________________ | Gayle.Espinosa@tcw.com | | | (Name) | (Area Code – Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | Deloitte
&
Touche
LLP | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
_____________________________________________________________________________________ | | | | | (Name – if individual, state last, first, and middle name) | | | | 555
West
5th
Street | Los
Angeles
_____________________________________________________________________________________ | CA | 90013 | | (Address) | (City) | (State) | (Zip Code) | | October
20,
2003 | _____________________________________________________________________________________ | 34 | | | (Date of Registration with PCAOB)(if applicable) | | (PCAOB Registration Number, if applicable) | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. **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 OMB control number.** {2}------------------------------------------------ | Gayle Espinosa | swear (or affirm) that, to the best of my knowledge and belief, the | | |----------------------------------------------------------------------|---------------------------------------------------------------------|--| | financial report pertaining to the firm of TCW Fund Distributors LLC | as of | | | 12/31 | ? 024 | | - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ ![](_page_3_Picture_5.jpeg) {4}------------------------------------------------ ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member and the Board of Directors of TCW Funds Distributors LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of TCW Funds Distributors LLC (the "Company") as of December 31, 2024, and the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, 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 the 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 audits, 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. #### **Emphasis of Matter** As discussed in Note 1, the Company derives most of its revenues from several affiliates. Additionally, as described in Note 1 and Note 5, the Company entered into an expense-sharing agreement with an affiliate whereby certain expenses are incurred and paid by the Parent on behalf of the Company. Therefore, if the Company were a stand-alone entity, the financial statements presented could be materially different. {5}------------------------------------------------ #### **Report on Supplemental Schedules** The accompanying supplemental schedules (h) and (o), (j), and (m) (collectively "the supplemental schedules") have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental schedules are the responsibility of the Company's management. Our audit procedures included determining whether the supplemental schedules reconcile 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 schedules. In forming our opinion on the supplemental schedules, we evaluated whether the supplemental schedules, including their form and content, are presented in compliance with Rule 17a-5 under the Securities Exchange Act of 1934. In our opinion, such schedules are fairly stated, in all material respects, in relation to the financial statements as a whole. February 27, 2025 We have served as the Company's auditor since 1990. {6}------------------------------------------------ ## **TCW FUNDS DISTRIBUTORS LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2024** #### **ASSETS** | Cash and cash equivalents (Note 2 and Note 3)
Distribution fees receivable (Note 2)
Prepaid expenses and other | \$
4,773,293
385,935
197,846 | |----------------------------------------------------------------------------------------------------------------------|---------------------------------------| | TOTAL ASSETS | \$
5,357,074 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities: | | | Payable to related party (Note 5) | \$
431,187 | | Distribution fees payable to Advisor (Note 2) | 385,935 | | Accrued professional fees and other | 6,645 | | Total Liabilities | 823,767 | | Commitments and contingencies (Note 6) | | | Member's Equity: | 4,533,307 | | Total Member's Equity | 4,533,307 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
5,357,074 | {7}------------------------------------------------ ## **TCW FUNDS DISTRIBUTORS LLC STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2024** #### **REVENUES** | Distribution fees (Note 2) | \$
15,767,311 | |-----------------------------------------------|-------------------| | Commission fees (Note 2) | 3,829,657 | | Non-12b-1 fees (Note 2) | 39,088,318 | | Dividend and other income | 123,602 | | Total Revenues | 58,808,888 | | EXPENSES | | | Distribution fees expense (Note 2) | 15,767,311 | | Commission expense (Note 2) | 3,829,657 | | Non-12b-1 fee expense (Note 2) | 39,088,318 | | Regulatory expenses | 388,925 | | Professional fees and other expenses (Note 5) | 1,321,731 | | Total Expenses | 60,395,942 | | NET LOSS | \$
(1,587,054) | {8}------------------------------------------------ ## **TCW FUNDS DISTRIBUTORS LLC STATEMENT OF CHANGES IN MEMBER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2024** | | Member's
Equity | |--------------------------------|--------------------| | Balance at January 1, 2024 | \$
2,120,361 | | Net loss | (1,587,054) | | Capital Contributions (Note 5) | 4,000,000 | | Balance at December 31, 2024 | \$
4,533,307 | {9}------------------------------------------------ ## **TCW FUNDS DISTRIBUTORS LLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2024** | CASH FLOWS FROM OPERATING ACTIVITIES: | | | |-----------------------------------------------------------------|---------------|-------------------| | Net loss | | \$
(1,587,054) | | Adjustments to reconcile net loss to net cash used in operating | | | | activities: | | | | Changes in assets and liabilities: | | | | Distribution fees receivable | \$
253,811 | | | Prepaid expenses and other | (29,456) | | | Distribution fees payable to Advisor | (253,811) | | | Payable to related party | 4,766 | | | Accrued professional fees and other | (9,743) | | | Total Adjustments | | (34,433) | | Net cash used in operating activities | | (1,621,487) | | CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions | | 4, 000,000 | | | | | | Net cash provided by financing activities | | 4,000,000 | | NET INCREASE IN CASH AND CASH EQUIVALENTS | | 2,378,513 | | CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | | 2,394,780 | | CASH AND CASH EQUIVALENTS AT END OF YEAR | | \$
4,773,293 | {10}------------------------------------------------ #### **NOTE 1 – ORGANIZATION** TCW Funds Distributors LLC (the "Company" or "TFD") is a registered broker/dealer and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company serves as national distributor of capital shares of a family of funds for which affiliates serve as the investment adviser. In addition, the Company acts as a placement agent for private placement limited partnerships that are managed by an affiliate of the Company. The Company is a single-member limited liability company ("single-member LLC"), a wholly owned subsidiary of TCW Group, Inc. (the "Parent") and is a second-tier subsidiary of Clipper Holding L.P. ("Holding"). The Company derives most of its revenues from several affiliates. The Company has an expense-sharing agreement (as described further in Note 5) with TCW LLC, ("TCW") an affiliate of the Company, under which certain expenses are incurred and paid by the Parent on behalf of the Company. Therefore, if the Company were a stand-alone entity, the financial statements presented could be materially different. #### **NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES** *Basis of Presentation* – The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). *Reportable Segment* – Management has determined that the Company operates in one segment, based on the similarities in economic characteristics between its operations, the common nature of its services and the regulatory environment under which it operates. Refer to Note 7 for further details. *Cash and Cash Equivalents* – The Company considers all investments that have original maturities from the date of acquisition of three months or less to be cash equivalents. At December 31, 2024, cash and cash equivalents consist of approximately \$270,388 in demand deposits with a bank and \$4,502,905 in a money market mutual fund (FGEXX). *Distribution Fees* – The Company serves as the nonexclusive distributor of each class of the TCW Funds, Inc., (the "TCW Funds") and the Metropolitan West Funds (the "MetWest Funds" and together with the TCW Funds, the "Funds") family of funds' shares. The Funds have a distribution plan (the "Plans") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act") with respect to the N and M Class shares of each TCW Fund and MetWest Fund, respectively. Under the terms of the Plans, the Company receives distribution fees from the TCW Funds of 0.25% of TCW Funds' net assets for N Class and 0.16% to 0.21% of the MetWest Funds' net assets for M Class. In general, these fees are received from the Funds within 10 business days after month-end. The Company expects to use all of these fees to compensate and reimburse the investment advisors - TCW Investment Management Company LLC ("TIMCO") for the TCW Funds and TCW Asset Management Company LLC ("TAMCO" and together with TIMCO, the "Advisor") for the MetWest Funds. The Advisor in turn pays the brokers, financial advisers, retirement plan service providers, and other financial intermediaries for providing administrative services to their customers. At December 31, 2024 the Company had \$385,935 of distribution fees payable to the Advisor and \$385,935 of distribution fees receivable from the Funds on the Statement of Financial Condition. For the year ended December 31, 2024, the Company earned distribution fees of \$15,767,311 from the Funds and expensed and recorded distribution fees of \$15,767,311 to the Advisor. {11}------------------------------------------------ #### **NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)** *Commission Fees* – The Company earns commissions revenue from TCW for serving as a broker-dealer of its affiliates' mutual funds and other affiliated investment funds. The Company remits commissions back to TCW, which acts as the disbursing agent for the commission payments, to pay its registered representatives. Commission fees and related expenses are recognized on a trade date basis. During the year ended December 31, 2024, the Company earned commissions of \$3,829,657 from TCW and expensed commissions \$3,829,657 to TCW. The Company accounts for commission receivables and liabilities to TCW in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 210-20, *Offsetting*, where presentation on a net basis is permitted when a setoff right exists. As of December 31, 2024 the amount of commissions due to/from TCW was \$2,096 presented on the Statement of Financial Condition on a net basis. *Non-12b-1 fees* – The Company has contracted with various third party intermediaries for certain nondistribution related services ("Non-12b-1 fees") for recordkeeping, administrative and other miscellaneous services. The Company engages these third party intermediaries to assist the Advisor to the Funds and recorded Non-12b-1 fee revenue of \$39,088,318 during the year ended December 31, 2024 for these services. The Company also utilizes the Advisor as the paying agent for all non-distribution related services and recognized an expense of \$39,088,318 during the year ended December 31, 2024 representing the Company's obligation to third party intermediaries for such non-distribution related services. The corresponding receivable for the Non-12b-1 fees and payable for the Non-12b-1 fees are due from and due to Advisor, respectively, and presented on a net basis on the Statement of Financial Condition. As of December 31, 2024, the amount of Non-12b-1 fees due to/from Advisor was \$8,857,749. *Income Taxes* – The results of the Company's operations are included in the consolidated tax return of Clipper Intermediate Corp. (a wholly-owned subsidiary of Holding). As a single-member LLC, the Company is a disregarded entity under U.S. Federal tax laws and accordingly, no tax recognition is reflected in the Company's financial statements. *Use of Estimates* – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such difference could be material. *Fair Value of Financial Instruments* – The Company's financial instruments, primarily including cash and cash equivalents, distribution fee receivables, prepaid expenses and other assets, distribution fees payable to the Adviser and accrued professional fees and other liabilities, are recorded at their cost or contract amount, which is considered by management to approximate their fair value, as they are short-term in nature or are subject to frequent repricing. *Revenue Recognition –* The Company recognizes revenue in accordance with ASC 606, *Revenue from Contracts with Customers* ("ASC 606"), which requires the amount of revenue recognized by an entity to correlate with the satisfaction of performance obligations to the customer as well as the amount of consideration that the entity expects to be entitled to in exchange for goods and services provided. An entity is required to (a) identify the contract(s) with the customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract and (e) recognize revenue when, or as the entity satisfies a performance obligation. In determining the transaction price, an entity is also required to ascertain whether constraints {12}------------------------------------------------ #### **NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)** on variable consideration should be applied due to uncertain future events. In accordance with ASC 606, the Company's revenue streams, performance obligations and associated timing of revenue recognition are as follows: | Revenue Stream | Performance Obligation(1) | Revenue Recognition | |-------------------|-------------------------------|----------------------------------------------------| | Distribution fees | To serve as the nonexclusive | Recognized over time; however, because such | | | distributor of the Funds' | fees are based on month- or quarter-end average | | | shares | market values, such fees are constrained until the | | | | end of the month when the actual average market | | | | values of the Funds are known and the related | | | | revenues are no longer subject to significant | | | | reversal. | | Commission fees | To serve as broker-dealer of | Point in time based on the Fund's sale of shares | | | the Funds by marketing and | and the Fund's recognition of management fees or | | | selling the Funds' shares | AUM. | | Non-12b-1 fees | To provide certain non | Recognized over time; however, because such | | | distribution related services | fees are based on month- or quarter-end market | | | for recordkeeping, | values, such fees are constrained until the end of | | | administrative and other | the month or quarter when the actual market | | | miscellaneous services. | values of the Funds are known and the related | | | | revenues are no longer subject to significant | | | | reversal. | (1)Each represent a single performance obligation associated with the relevant revenue stream. The Company applies a time-elapsed output method for performance obligations satisfied over time since the services are provided evenly throughout the period. In assessing its revenue arrangements, the Company also applies the control principal and considers indicators of control as prescribed in ASC 606 to determine whether it is the principal or agent in each revenue arrangement. Revenues and expenses from arrangements whereby the Company is the principal are reported at gross in the Company's Statement of Operations. *Recent Accounting Pronouncements* – In November 2023, the FASB issued Accounting Standards Updated ("ASU") 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures* ("ASU 2023-07"). This change is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures and providing new disclosure requirements for entities with a single reportable segment, among other new disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. On January 1, 2024, the Company adopted ASU 2023-07 and the adoption did not have any impact on its financial condition or {13}------------------------------------------------ #### **NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)** results of operations as the standard was disclosure related only. In March 2024, FASB issued ASU No. 2024-02, *Codifcation Improvements – Amendments to Remove References to the Concepts Statements*. The amendments in this update remove references to various Concepts Statements. The amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. Management is currently evaluating the impact of this guidance on the Company's financial statements. In November 2024, the FASB issued ASU No. 2024-03, *Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures,* which requires disaggregated disclosure of income statement expenses for public business entities ("PBEs). This ASU is effective for the Company for annual periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements. #### **NOTE 3 – FINANCIAL INSTRUMENTS** The Company's financial assets measured and reported at fair value are classified and disclosed in one of the following categories: - o Level 1 Quoted prices are available in active markets for identical investments as of the reporting date. Investments included in this category are money market funds, listed equities, and equity index funds. The Company does not adjust the quoted price of these investments, even in situations where it holds a large position and a sale could reasonably be expected to affect the quoted price. - o Level 2 Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Investments generally included in this category are convertible bonds. - o Level 3 Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs used in the determination of fair value require significant management judgment or estimation. The following table summarizes the carrying values, fair values and fair value hierarchy level classification of financial instruments as of December 31, 2024: | ASSETS | | Carrying Value | | Level 1 | | Level 2 | | Level 3 | | Fair Value | | |---------------------------------------------|----|----------------|----|--------------|----|---------|------|---------|----|------------|--| | Cash | \$ | 270,388 | | 270,388 \$ | | - \$ | - \$ | | \$ | 270,388 | | | Cash equivalents - money market mutual fund | | 4,502,905 | | 4,502,905 | | - | - | | | 4,502,905 | | | Distribution fees receivable | | 385,935 | | - | | 385,935 | - | | | 385,935 | | | Prepaid expenses and other | | 197,846 | | - | | 197,846 | - | | | 197,846 | | | Total assets | \$ | 5,357,074 | | 4,773,293 \$ | \$ | 583,781 | - \$ | | \$ | 5,357,074 | | | LIABILITIES | | | | | | | | | | | | | Payable to related party | \$ | 431,187 | | - \$ | \$ | 431,187 | - \$ | | \$ | 431,187 | | | Distribution fees payable to Advisor | | 385,935 | | - | | 385,935 | - | | | 385,935 | | | Accrued professional fees and other | | 6,645 | | - | | 6,645 | - | | | 6,645 | | | Total liabilities | \$ | 823,767 | \$ | - | \$ | 823,767 | - \$ | | \$ | 823,767 | | {14}------------------------------------------------ #### **NOTE 3 – FINANCIAL INSTRUMENTS (continued)** Transfers of investments between different levels of the fair value hierarchy are recorded as of the end of the reporting period. There were no transfers between levels for the year ended December 31, 2024. There are no financial assets and liabilities that are accounted for at fair value on a nonrecurring basis as of December 31, 2024. #### **NOTE 4 – REGULATORY REQUIREMENTS** The Company is subject to the Securities and Exchange Commission's ("SEC") Uniform Net Capital Rule ("Rule 15c3-1"), which requires that the Company maintain minimum net capital, as defined, and may not permit its aggregate indebtedness, as defined, to exceed 15 times its net capital (and the rules of various regulatory agencies also provide that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At December 31, 2024, the Company had net capital of \$3,859,468, which was \$3,804,550 in excess of its required net capital of \$54,918. The Company's ratio of aggregate indebtedness to net capital was 0.21 to 1. In accordance with the July 1, 2020 update to the SEC's guidance concerning the amendments to the brokerdealer reporting rule, Rule 17a-5 under the Securities and Exchange Act of 1934 ("Rule 17a-5"), that were adopted on July 30, 2013, the Company is filing an Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to (1) mutual fund underwriter/sponsor (distributor); (2) private placements of securities (on a best efforts basis only); and (3) mutual fund retailer (application basis only) and 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 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 brokers (commonly referred to as "PAB accounts") throughout the most recent fiscal year. #### **NOTE 5 – RELATED PARTIES** The Company has an expense-sharing agreement with TCW, under which TCW agrees to accept responsibility for the general and administrative expenses of the Company and to serve as common paymaster for the purpose of eliminating duplication in accounting and payments for shared expenses. In accordance with FINRA's (formerly the National Association of Securities Dealers) Notice to Members dated October 2003 ("NTM 03-63"), the Company maintains a schedule of operating expenses paid for by TCW on behalf of the Company. Operating expenses paid for by TCW on behalf of the Company include expenses for the office premises and office equipment, salaries and general and administrative expenses for registered representatives' as well as personnel in legal, compliance, and finance that are allocable to the Company based on average annual time spent on TFD-related activities. During the year ended December 31, 2024, the amount of operating expenses was \$9,760,422. Refer to Note 2 for discussion of related party agreements and transactions pertaining to distribution, commission and non-12b-1 fees. Additionally, the Company has a payable due to Parent of \$431,187 which primarily relates to business and entertainment and gift and gratuities expenses incurred by the Company during the year ended December 31, 2024 that were paid by the Parent but subject to reimbursement by the Company. During the year ended December 31, 2024, the Company received a capital contribution from Parent of \$4,000,000. {15}------------------------------------------------ #### **NOTE 6 – COMMITMENTS AND CONTINGENCIES** From time to time, the Company receives subpoenas or other requests for information from various U.S. federal, state governmental, and regulatory authorities in connection with certain industry-wide or other investigations or proceedings. It is the Company's policy to cooperate fully with all such inquiries. The Company, certain affiliates, and various third parties have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with the Company's activities. Management, after consultation with legal counsel, currently does not anticipate that the aggregate liability, if any, arising out of pending or threatened regulatory matters or lawsuits will have a material adverse effect on the Company's financial position. At the present time, management is not in a position to determine whether any such matters will have a material adverse effect on the Company's results of operations in any future reporting period. #### **NOTE 7 – SEGMENT REPORTING** The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including distribution of the Funds' shares, marketing and selling the Funds' shares, and non-distribution related services for recordkeeping, administrative and other miscellaneous services. The Company has identified its FinOp/Managing Director as the chief operating decision maker ("CODM"), who uses net loss to evaluate the results of the business. Additionally, the CODM uses excess net capital (see Note 4), which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. The Company earns 100% of its revenue in the United States of America. Additionally, the Company earns a majority of its revenue from related parties (see Note 2). The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. Additionally, the revenue and expense amounts reviewed by the CODM are at the same level of disaggregation as those presented on the Company's Statement of Operations. #### **NOTE 8 – SUBSEQUENT EVENTS** Management has evaluated subsequent events for potential recognition or disclosure in the Company's financial statements through the date on which the Company's financial statements were issued. No subsequent events have occurred requiring its recognition or disclosure in the Company's financial statements. \* \* \* \* \* \* \* {16}------------------------------------------------ #### **SUPPLEMENTAL SCHEDULE (h) and (o)** ### **TCW FUNDS DISTRIBUTORS LLC COMPUTATION OF NET CAPITAL FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934 DECEMBER 31, 2024** #### **NET CAPITAL** | Total member's equity from statement of financial condition | | \$
4,533,307 | |---------------------------------------------------------------------------------------|---------------|-----------------| | DEDUCTIONS AND/OR CHARGES | | | | Nonallowable assets: | | | | Distribution fees receivable | \$
385,935 | | | Prepaid expenses and other | 197,846 | | | Total deductions and/or charges | | 583,781 | | Net capital before haircuts on securities positions | | 3,949,526 | | Haircuts on securities: | | | | Money market mutual fund | 90,058 | | | Total haircuts | | 90,058 | | NET CAPITAL | | \$
3,859,468 | | TOTAL AGGREGATE INDEBTEDNESS | | \$
823,767 | | MINIMUM CAPITAL REQUIRED (Greater of 6-2/3% of
aggregate indebtedness or \$25,000) | | \$
54,918 | | EXCESS CAPITAL | | \$
3,804,550 | | RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL | | 0.21 | Note: There are no material differences between the above Computation of Net Capital under Rule 15c3-1 and the Company's corresponding Form X-17A-5, Part IIA as of December 31, 2024, filed on January 27, 2025. {17}------------------------------------------------ #### **SUPPLEMENTAL SCHEDULE (j)** ### **TCW FUNDS DISTRIBUTORS LLC COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS PURSUANT TO RULE 15c3-3 UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS OF DECEMBER 31, 2024** The Company has no possession or control obligations under SEC Rule 15c3-3(b) or reserve deposit obligations under SEC Rule 15c3-3(e) because its business is limited to (1) mutual fund underwriter/sponsor (distributor); (2) private placements of securities (on a best efforts basis only); and (3) mutual fund retailer (application basis only). {18}------------------------------------------------ #### **SUPPLEMENTAL SCHEDULE (m)** ## **TCW FUNDS DISTRIBUTORS LLC INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS PURSUANT TO RULE 15c3-3 UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS OF DECEMBER 31, 2024** The Company has no possession or control obligations under SEC Rule 15c3-3(b) or reserve deposit obligations under SEC Rule 15c3-3(e) because its business is limited to (1) mutual fund underwriter/sponsor (distributor); (2) private placements of securities (on a best efforts basis only); and (3) mutual fund retailer (application basis only). {19}------------------------------------------------ #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member and the Board of Directors of TCW Funds Distributors LLC: We have reviewed management's statements, included in the accompanying TCW Funds Distributors LLC's Exemption Report (the "Exemption Report"), in which TCW Funds Distributors LLC (the "Company") stated that the Company did not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3 and filed the Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 ("Footnote 74") throughout the year ended December 31, 2024, 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 management's statements within the Exemption Report. 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 of Footnote 74. February 27, 2025 {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) - - Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.