# DRIVEWEALTH INSTITUTIONAL LLC X-17A-5 (2025-03-06) — Broker-dealer annual report

- Company: DRIVEWEALTH INSTITUTIONAL LLC
- Form: X-17A-5
- Filed: 2025-03-06
- Period: 2024-12-31
- Accession: 0000741594-25-000001
- CIK: 741594
- File #: 8-31461
- Type: Broker-dealer
- Material weakness: No
- Auditor: Grant Thornton LLP
- Auditor location: New York, NY
- Contact: Paul Gonoud
- Phone: 929-715-2060
- Email: pgonoud@drlvewealth.com
- Website: drlvewealth.com
- Signed by: Paul Gonoud (Director, FINOP)

Original filing: https://www.sec.gov/Archives/edgar/data/741594/000074159425000001/DWI_Public.pdf

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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORTS FORM X-17A-5 PART** Ill FACING PAGE **0MB APPROVAL**  0MB Number: 3l35·0123 Expires: Nov. 30, 2026 E�tirnated average burden hours per response: 12 **SEC FILE NUMBER Information Required Pursuant to Rules 17a·S, 17a•l2**1 **and 18a•7 under the Securities Exchange Act of 1934**  FILING FOR THE PERIOD BEGINNING 1 /1 *f2024*  MM/DD/VY AND ENDING **12/31/2024 A. REGISTRANT IDENTIFICATION**  NAME OF FIRM: DriveWealth lnstitutional, LLC TYPE OF REGISTRANT (check all applicable boxes): MM/DD/VY [!] Broker-dealer □ Security-based swap dealer D Check here if respondent is also an OTC derivatives dealer □ Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 11 Wall Street (No. and Street) New York NY {City) (State) PERSON TO CONTACT WITH REGARD TO THIS FILING 10005 (Zip Code) Paul Gonoud (929) 715-2060 pgonoud@drlvewealth.com (Name) (Area Code� Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION**  INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing Grant Thornton LLP (Name- if individual, state last, first, and middle name) 757 Third Ave, 9th Floor New York NY (Address) (CltY) (State) 09/24/2003 248 10017 (Zip Code) (Date of Registration with PCAOB)(lf applicable} (PCAOB Registration Number, If **aoollcable) 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 circumstanc s relled on as the basis of the exemption. See 17 CFR 240.17a-5(e)(l}(li), 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 0MB control number.

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#### **OATH OR AFFIRMATION**

| I<br>, |  |
|--------|--|
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**Paul Gonoud swear (or affirm) that, to the best of my knowledge and belief, the** 

**financial report pertaining ta the firm of DrlveWealth lnstuuuo�al, LLC as of**  1 2/3 1 **2� is true and correct. I further swear (or affirm) that neither the company nor any** 

**partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer.** 

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SlgnatUr•�....e w **Title: Direcior, FINOP** 

#### **This filing\*\* contains (check all applicable bol<es):**

- **!!ii (a) Statement of financial condition.**
- **ljj (bl Notes to consolidated statement of financial condition.**
- **0 (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-XJ.**
- **0 (d) Statement of cash flows.**
- **□ (e) Statement of changes In stockholders' or partners' or sole proprietor's equity.**
- **D (f) Statement of changes In liabilities subordinated to claims of creditors.**
- **D (g) Notes to consolidated financial statements.**
- **D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.**
- **0 (i} Cotnputatron of tangible net worth under 17 CFR 240.18a-2.**
- **D (j) Computation for determination of customer reserve reejuirements pursuant to Exhibit A to 17 CFR 240.15c3-3.**
- **D {k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.**
- **□ (I} Computation for Determination of PAS Requirements under Exhibit A to § 240.15c3-3.**
- **D (ml Information relating to possession or control requirements for customers under 17 CFR 24D.15c3-3.**
- **D (n) lnforrnatioh relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(p){2) or 17 CFR 240.18a•4, as applfcable.**
- **D (o) Reconciliations, tncludlng appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3•1, 17 CPR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.1Sc3-3 or 17 CFR 240.18a-4, as appl icable, if material clifferences exist, or a statement that no material differences e><ist.**
- **□ (p) Summary of financial data for subsidiaries not consolidated In the statement of financial condition.**
- **I!! (q) Oath or afflrmatloh In accordahce with 17 CFR 240.17a-S, 17 CFR 240.17a-12**1 **or 17 CFR 240.18a-7, as applicable.**
- **D (r) Compl iance report In accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.**
- **D (s} Exemptioh report In accordance with 17 CFR 240.17a•S or 17 CFR 240.lBa-7, as applicable.**
- **Iii (t} Independent public accountant's report based on an examination of the statement of financial condition.**
- **D (u) Independent public accountant's report based** *on* **an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240,17a-12, as applicable.**
- D **(V) Independent public accountant's report based on ah examination of certain statements In** the **compliance report under 17 CFR 240.17a•S or 17 CFR 240, lBa-7, as applicable.**
- **I!! (w) Independent public accountanes report based on a review of the ex mption report under 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable.**
- **!!I (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.1Sc3-1e or 17 CFR 240.17a-12, as applicable.**
- **D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that 110 material inadequacies exist, under 17 CFR 240.17a-12(k). □ (z) other: \_\_\_ ��-------------------------------**
- 
- *\*\*To request confident/a/ treatment of certain portions of this fifing, see 17 CFR 240.17a-5(e){3) or 17 CFR 240.18a-7(d)(2), as applicable.*

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# **DRIVEWEAL TH INSTITUTIONAL, LLC**

**Statement of Financial Condition And Report of Independent Registered Public Accounting Firm** 

**For the Fiscal Year Ended December 31 , 2024** 

**{Filed Pursuant to Rule 1 7a-5{e)(3) Under the Securities Exchange Act of 1 934)** 

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### **DRIVEWEAL TH INSTITUTIONAL, LLC STATEMENT OF FINANCIAL CONDITION INDEX FOR THE YEAR ENDED DECEMBER 31 , 2024**

|                                                         | Page |
|---------------------------------------------------------|------|
| Report of Independent Registered Public Accounting Firm | 1-2  |
| Financial Statements:                                   |      |
| Statement of Financial Condition                        | 3    |
| Notes to the Statement of Financial Condition           | 4-8  |

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GRANT THORNTON LLP 757 Third Ave., 9th Floor New York, NY 10017

D +1 212 599 0100 F 1 212 370 4520

#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Managing Member DriveWealth Institutional, LLC

#### **Opinion on the financial statements**

We have audited the accompanying statement of financial condition of DriveWealth Institutional, LLC (a New York Limited Liabil ity Company) (the "Company") as of December 31 , 2024, 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 in conformity with accounting principles generally accepted in the United States of America.

#### **Change in accounting principle**

As discussed in Note 2 to the financial statements, the Company has adopted new accounting guidance in 2024 related to the disclosure of segment information in accordance with ASU 2023-07, Segment Reporting (Topic 280).

#### **Basis for opinion**

These financial statements are the responsibil ity 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 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.

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**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.** 

**We have served as the Company's auditor since 2023.** 

**New York, New York February 28, 2025** 

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#### **DRIVEWEAL TH INSTITUTIONAL, LLC Statement of Financial Condition As of December 31 , 2024 (in thousands)**

| Assets                                        |    |           |
|-----------------------------------------------|----|-----------|
| Cash and cash equivalents                     |    | 8,265     |
| Receivables, net:                             |    |           |
| Other brokers and exchanges                   |    | 8,022     |
| Clearing brokers                              |    | 7,01<br>8 |
| Deposit accounts with clearing brokers        |    | 367       |
| Due from affi<br>liates                       |    | 7         |
| Other assets                                  |    | 57        |
| Total Assets                                  | \$ | 23,736    |
| Liabilities and Member's Equity               |    |           |
| Liabilities                                   |    |           |
| Accounts payable, accrued expenses, and other |    | 1 ,821    |
| Due to affi<br>liates                         |    | 4,022     |
| Total Liabilities                             |    | 5,843     |
| Member's Equity                               |    |           |
|                                               |    | 1 7,893   |
| Total Liabilities and Member's Equity         | \$ | 23,736    |

Amounts may not sum due to rounding.

See Accompanying Notes to the Statement of Financial Condition

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### **1. ORGANIZATION AND BUSINESS**

DriveWealth I nstitutional, LLC (formerly, Cuttone & Company, LLC) (the "Company") was formed in New York in 201 6. Pursuant to a membership interest purchase agreement, effective January 1, 2021 , the Company was acquired as a wholly owned subsidiary of DriveWealth Holdings, LLC (the "Holding Company"). On January 28, 2021 , the Company changed its name to DriveWealth I nstitutional, LLC.

The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC"), is a member of the Financial I ndustry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"). The Company is subject to the provisions of the SEC Uniform Net Capital Rule ("Rule 1 5c3-1 ").

The Company executes orders on behalf of third-party and affiliated brokerage firms. The Company also engages in proprietary trading of securities for its own account. Al l customer securities transactions are cleared through other broker-dealers (the "Clearing Brokers") on a fully disclosed basis and, therefore, the Company is exempt from SEC Rule 1 5c3-3(k)(2)(ii) and limits its other business activities, including floor brokerage and proprietary trading, contemplated by footnote 74 of the SEC Release No. 34-70073 adopting amendments to C.F.R. §240. 1 7a-5.

The Holding Company also whol ly owns the subsidiaries DriveWealth, LLC, DriveWealth Technologies, LLC, Driveloyalty, LLC, DriveAdvisory, LLC, DriveWealth Institutional, LLC, Driveliquidity, LLC, DriveDigital, LLC, DriveWealth Europe UAB, DriveWealth Singapore PTE. Ltd ., DriveDigital US Corp. DriveWealth, LLC is a broker-dealer which sends retail flow through to the Company to execute. The retail cl ients of DriveWealth, LLC trade on the DriveWealth, LLC platform, who then routes this retail flow to the Company. The Company executes said order flow fol lowing best execution obl igations. DriveWealth Technologies, LLC provides technology services to the Company, such as IT support and cloud management. DriveWealth Europe UAB holds a license pursuant to Markets in Financial I nstrument Directive (MiFi D) rules and does not conduct business with the Company. DriveWealth Singapore PTE. Ltd and does not conduct business with the Company. holds a capital markets services license pursuant to the Monetary Authority of Singapore (MAS). Driveloyalty, LLC, DriveAdvisory, LLC, Driveliquidity, LLC, DriveDigital, LLC, and DriveDigital US Corp do not conduct business with the Company except where there are shared expenses."

### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

#### **Basis of Presentation**

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

### **Use of Estimates**

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabil ities 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.

#### **Cash and Cash Equivalents**

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Cash consists of deposits with banks and Clearing Brokers and all highly liquid investments, with maturities of three months or less. The Company maintains cash and cash equivalents in bank and Clearing Broker deposit accounts, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts, and it bel ieves it is not exposed to any significant credit risk on these cash accounts. The Company held \$ 1 6 of cash equivalents which consisted of money market accounts as of December 31 , 2024.

### **Currently Expected Credit Losses ("CECL")**

The Company measures credit losses on financial instruments in accordance with FASB ASC 326- 20, Financial Instruments - Credit Losses, which requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is based on the Company's expectation of the collectability of such receivables util izing the CECL framework.

The Company's receivables primarily consist of commissions due from Clearing Brokers and other brokers. Commission receivables are generally due within 30 days or less. The credit risk associated with Commission receivables is that the Clearing Broker and the brokers are unable to pay the commissions in full as per the contractual obl igation . The Company's expectation is that the credit risk associated with receivables is not significant until they are past due based on the contractual arrangement and expectation of collection in accordance with industry standards.

The following table presents the activity in the allowance for credit losses for the year ended December 31 , 2024.

| December 31, 2023         | \$<br>6  |
|---------------------------|----------|
| Provision for credit loss | 34       |
| Write-offs                | (6)      |
| December 31, 2024         | \$<br>34 |

#### **Income Taxes**

The Company is not a taxpaying entity for Federal or State income tax purposes. The income or loss of the Company is reported on the Parent's tax returns. Therefore, no provision or liabil ity for income taxes is included in these financial statements. No formal tax sharing agreement exists between the Company and the Parent and the Company has no obl igation to fund any liabil ity of the Parent with its earnings. The Company is subject to taxation in local jurisdictions. As of December 31 , 2024, the Company's reporting of operations for tax years 2021 , 2022, and 2023 are subject to examination by the tax authorities.

In accordance with US GAAP, the Company is required to determine whether its tax positions are more likely than not to be sustained upon examination by the appl icable taxing authority based on the technical merits of the position. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likel ihood of being realized upon ultimate settlement with the relevant taxing authorities. Based on its analysis, the Company has determined that it has not incurred any liabil ity for unrecognized tax benefits as of December 31 , 2024. The Company does not expect that its assessment regarding unrecognized tax benefits will materially change over the next twelve months. However, the Company's conclusions may be subject to review and adjustment at a

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later date based on factors including, but not limited to, questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, compliance with U.S. federal, U.S. state and foreign tax laws, and changes in the administrative practices and precedents of the relevant taxing authorities.

No interest expense or penalties related to unrecognized tax benefits have been recognized for the year ended December 31 , 2024.

#### **Lease Accounting**

The Company accounts for leases under Topic 842. The guidance requires the recognition of assets and liabil ities on the Statement of Financial Condition to the rights and obligations created by lease agreements with terms greater than 12 months, regardless of whether they are classified as finance or operating leases. As of December 31 , 2024, the Company had no long-term leases.

A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less and does not contain an option to purchase the underlying asset that the lease is reasonably certain to exercise. Short-term lease payments are expensed on a straight-l ine basis over the lease term. Related variable lease payments are recognized in the period in which the obligation is incurred . All the Company's lease obligations meet the criteria of short-term leases.

The Company evaluates its vendor agreements under U.S. GAAP appl icable to leases, including its expense sharing agreement for the recognition criteria under this guidance. It was determined that during the year ended December 31 , 2024, no agreements or arrangements existed that would be classified as a lease under the guidance including the allocated rent payable to the Holding Company pursuant to the expense sharing agreement.

#### **Segment Reporting**

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures ("ASU 2023- 07"), which requires incremental disclosures about reportable segments but does not change the definition of a segment or the guidance for determining reportable segments.

### **3. RECEIVABLES FROM CLEARING BROKERS, OTHER BROKERS, AND EXCHANGES**

As of December 31 , 2024, the amount due from clearing and other brokers includes principal transaction proceeds held at Clearing Brokers, direct commissions earned and bil led to other brokers, and liquidity rebates receivable from exchanges, net of applicable clearing charges and fees. In addition, the Company has cash balances at the Clearing Brokers, including the required clearing deposits.

Management monitors the credit risk of cl ients, including historical experience, current conditions, reasonable assurance, and supportable forecasts to determine expected credit loss. During 2024, management assessed the credit risk to be minimal after considering the factors under CECL framework, however, as December 31 , 2024, the Company identified certain receivables which required an allowance for credit loss to be recorded in the amount of \$34 on the financial statements.

Amounts receivable, net of estimated credit losses, from the clearing and other brokers as of December 31 , 2024, consists of the following:

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| Commissions earned, principal transaction proceeds and cash balance due from<br>Clearing Brokers | \$<br>7,01<br>8 |
|--------------------------------------------------------------------------------------------------|-----------------|
| Direct billing due from other brokers                                                            | 3,085           |
| Receivables from exchanges                                                                       | 4,937           |
| Total receivables from brokers and exchanges                                                     | \$<br>1 5,407   |

The clearing and depository operations for the Company's and Customer's securities transactions are provided by Clearing Brokers pursuant to clearance agreements.

Pursuant to clearing agreements, the Company may offset receivable and payable balances in the accounts held at the Clearing Brokers.

# **4. RELATED PARTY TRANSACTIONS**

As of December 31 , 2024, the balance with related parties was as follows:

| Assets                        |             |
|-------------------------------|-------------|
| DriveWealth Technologies, LLC | \$<br>7     |
| Liabilities                   |             |
| DriveWealth, LLC              | \$<br>4,022 |

The Company receives retail volume from DriveWealth, LLC, an affi liated broker dealer, to execute and compensates DriveWealth, LLC for the volume and charges DriveWealth, LLC for the volume driven exchange transactions fees per a revenue and cost sharing agreement.

DriveWealth Technologies, LLC provides employee compensation, such as salary and fringe benefits, and technology services to the Company, such as IT support and cloud management.

The Company has an expense sharing agreement with the Holding Company for leases at the Jersey City, NJ and New York, NY offices and for direct general and administrative costs paid by the Holding Company.

# **5. CONCENTRATION**

The Company's financial instruments that are exposed to concentrations of credit risk consist of cash. The Company places its cash and firm investments with qual ity institutions. At times, cash balances may exceed the Federal Deposit I nsurance Corporation ("FDIC"). As of December 31 , 2024, the Company's cash balances on deposit exceeded FDIC insurance limits by \$8,01 5.

Three customers represented approximately 80% of receivables from other brokers and exchanges as of December 31 , 2024, and one clearing firm represented 1 00% of receivables from clearings brokers.

### **6. EMPLOYEE BENEFIT PLANS**

The Company sponsors a 401 (k) savings plan covering eligible employees of the Company; there was no employer contributions for the fiscal year ended December 31 , 2024.

# **7. OFF BALANCE SHEET RISK**

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In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees, and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated . However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liabil ity in the financial statements for these indemnifications.

The Company provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. The Company may also provide standard indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld , due either to a change in or adverse application of certain tax laws. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated . However, the Company bel ieves that it is unl ikely it wi ll have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications.

# **8. SEGMENT INFORMATION**

Operating segments are defined as components of a company that engage in business activities and for which discrete financial information is available. The Company has identified its Chief Executive Officer ("CEO") as the chief operating decision maker ("CODM"), who uses I ncome Statement, Balance Sheet and Cash Flows to make decisions on resource and capital allocation. The Company effects transactions in equities asset class within the United States. We consider our operations to constitute a single operating segment. The accounting policies of the segment are the same as those described in the summary of significant accounting pol icies and SEC rule 1 5c3-1 . Total Segment assets is \$23,736 as of December 31 , 2024.

#### **9. SUBSEQUENT EVENTS**

The Company has evaluated events and transactions that occurred between January 1, 2025, and February 28, 2025, which is the date the financial statements are issued . There have not been material subsequent events that occurred during such period that would require disclosure or recognition in the financial statements


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.