# BRADESCO INVESTMENTS INC. X-17A-5 (2024-03-28) — Broker-dealer annual report - Company: BRADESCO INVESTMENTS INC. - Form: X-17A-5 - Filed: 2024-03-28 - Period: 2023-12-31 - Accession: 0000811093-24-000005 - CIK: 811093 - File #: 8-37483 - Type: Broker-dealer - Material weakness: No - Auditor: KPMG LLP - Auditor location: New York, NY - Contact: DULCE GALINDO - Phone: (305) 523-6536 - Email: dgalindo@bradescobank.com - Website: bradescobank.com - Signed by: DULCE GALINDO (Executive Representative) Original filing: https://www.sec.gov/Archives/edgar/data/811093/000081109324000005/bi2023fspbfiled_1.pdf --- {0}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 > SEC FILE NUMBER 8-37483 ## **ANNUAL REPORTS FORM X-17A-S PART Ill** **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 **01/01/2023** AND ENDING **12/31/2023** MM/DD/VY MM/DD/VY **A. REGISTRANT IDENTIFICATION** # NAME oF FIRM: Bradesco Investments Inc. TYPE OF REGISTRANT (check all applicable boxes): [!] Broker-dealer D Security-based swap dealer D Major security-based swap participant D Check here if respondent is also an OTC derivatives dealer **ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)** ## 3011 Ponce de Leon Blvd, PH1 | | (No. and Street) | | | |----------------------------------------------|----------------------------------------------------------------------------|-----------------|------------| | Coral Gables | Florida | | 33134 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Dulce Galindo | (305) 523-6536
dgalindo@bradescobank.com | | | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose reports are contained in this filing* | | | | KPMG LLP | | | | | | (Name -if individual, state last, first, and middle name) | | 10154-0102 | | 345 Park Avenue | New York
(City) | NY
(State) | (Zip Code) | | (Address)
10/20/2003 | | 185 | | \* 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)(l)(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 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | | I, _o-u-L_C_E_G_A_u_N_o__o
--------------" swear (or affirm) that, to the best of my knowledge and belief, the | |-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | financial report pertaining to the firm of
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_ | | | _1_2_/3_1 ___ �------J 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. | | | | | | Signature: | | | �,.;_ "°'.o | | | Title:
WILLIAM CASTANO | | | Executive Representative
Notary Public • State of Florida .
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My Comm. Expires Jan 3, 2025 | | | Bonded throu�h National Notary Assn., · | | | This filing** contains (check all applicable boxes): | | iii | (a) Statement of financial condition. | | iii | (b) Notes to consolidated statement of financial condition. | | D | (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 | (d) Statement of cash flows. | | D | (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-l, as applicable. | | D | (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | D | (j) Computation for determination of customer reserve requirements 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. | | D | (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. | | D | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | D | (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. | | D | (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net | | | worth under 17 CFR 240.15c3-l, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 | | | CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences | | | exist. | | D | (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. | | iii | (q) Oath or affirmation in accordance with 17 CFR 240.l 7a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. | | D | (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | D | (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-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.l 7a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. | | D | (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 | | | CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | D | (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 | | | CFR 240.18a-7, as applicable. | | D | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.l 7a-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 no material inadequacies exist, under 17 CFR 240.17a-12(k). | | D | | | | (z) Other:-------------------------------------­ | *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.* {2}------------------------------------------------ #### **BRADESCO INVESTMENTS INC. (S.E.C I.D. No. 8-37483)** **STATEMENT OF FINANCIAL CONDITION December 31, 2023** **WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** {3}------------------------------------------------ #### BRADESCO INVESTMENTS INC. #### FINANCIAL STATEMENTS CONDITION December 31, 2023 ### TABLE OF CONTENTS | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1 | | |------------------------------------------------------------|--| | FINANCIAL STATEMENT | | | STATEMENT OF FINANCIAL CONDITION 2 | | | NOTES TO FINANCIAL STATEMENT 3 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) KPMG LLP Brickell City Centre, Suite 1200 78 SW 7 Street Miami, FL 33130 #### **Report of Independent Registered Public Accounting Firm** To the Stockholder and Board of Directors Bradesco Investments Inc.: #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Bradesco Investments Inc. (the Company) as of December 31, 2023, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2023, in conformity with U.S. generally accepted accounting principles. #### *Basis for Opinion* This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement 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 statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2021. Miami, Florida March 22, 2024 {5}------------------------------------------------ ### BRADESCO INVESTMENTS INC. STATEMENT OF FINANCIAL CONDITION December 31, 2023 | ASSETS | | |---------------------------------------------|------------------| | Cash and due from banks | \$
4,594,504 | | Deposits with clearing firm | 5,244,575 | | Operating lease right-of-use asset | 839,739 | | Trailer fee receivable | 458,058 | | Due from affiliates | 203,318 | | Fixed assets, net | 11,720 | | Deferred tax asset | 325,253 | | Prepaid expenses and other assets | 334,703 | | Total assets | \$
12,011,870 | | | | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | Liabilities: | | | Accounts payable and accrued expenses | \$
1,907,353 | | Operating lease liability | 850,005 | | Accrued com missions and other payables | 993 | | Due to affiliates | 656,035 | | Total liabilities | 3,414,386 | | Stockholder's equity: | | | Common stock, \$1 par value; 100,000 shares | | | authorized, issued and outstanding | 100,000 | | Additional paid in capital | 6,911,014 | | Retained earnings | 1,586,470 | | Stockholder's equity | 8,597,484 | | Total liabilities and stockholder's equity | \$
12,011,870 | {6}------------------------------------------------ #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Nature of Business: Effective February 26, 2021, BAC Florida Investments Corp.'s legal name has changed to Bradesco BAC Florida Investments Corp. Effective March 20, 2023 the Company changed its name to Bradesco Investments Inc (the "Company"). The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of Financial Industry Regulatory Authority ("FINRA"). The Company is 100% owned by Bradesco Bank ("Parent Company"). The Company offers securities transaction services to its customers. The Company clears all of its securities transactions on a fully disclosed basis through Pershing LLC ("Pershing"), a subsidiary of The Bank of New York Mellon Corporation. Bradesco Investments Inc. is approved to operate as a broker-dealer in the following states since the corresponding effective dates: | US States & Territories | Effective Date | |-------------------------|----------------| | Florida | 10/28/1987 | | New York | 07/08/1991 | | Georgia | 12/12/2017 | | Delaware | 03/08/2018 | | North Carolina | 12/05/2019 | | Texas | 01/23/2020 | | District of Columbia | 08/20/2021 | | Massachusettes | 03/30/2022 | | New Jersey | 07/08/2022 | | Tennessee | 08/18/2022 | | Maryland | 09/01/2022 | | Colorado | 09/07/2022 | | Louisiana | 02/27/2023 | | Wyoming | 06/07/2023 | | Ohio | 09/29/2023 | | California | 10/13/2023 | | South Dakota | 11/28/2023 | | | | The Company's minimum net capital requirement pursuant to SEA Rule 15c3-1 (a)(2)(iii) is \$171,643. Cash and Cash Equivalents: Cash and cash equivalents consists primarily of cash held with its Parent Company, clearing firm, and deposits with other financial institutions, all of which have original maturities of 90 days or less. Deposits with Clearing Firm: Deposits with clearing firm consist of restricted cash disclosed in Note 2 and amounts due from and payable to the clearing firm for fees and commissions. Fixed Assets: Leasehold improvements, computers and software and furniture and equipment are recorded at historical cost, net of accumulated amortization and depreciation. Leasehold improvements are amortized over the lesser of their useful lives or the terms of the underlying leases. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. Computers and software, as well as furniture and equipment, are depreciated over a period of three to five years. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 periods. Actual results could differ from those estimates. {7}------------------------------------------------ #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (continued) Revenue Recognition: The Company has identified commissions and trailer fees as its most significant revenue streams. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Trailer fees are estimated based on an agreed upon distribution rate with each fund family over the average fund holdings period. The receivable associated to accrued trailer fees is generally settled on a quarterly basis. Financial Instruments with Off-Balance-Sheet Risk: In the normal course of its business and under standard contract terms included in the correspondent agreement with Pershing LLC, its clearing firm, the Company has agreed to indemnify its clearing firm from damages or losses resulting from customer transactions. The Company is, therefore, exposed to off-balance-sheet risk of loss in the event that customers are unable to fulfill contractual obligations under margin accounts. At December 31, 2023, there were no margin accounts that were not fully secured by marketable securities under customary margin requirements. As a result, the Company did not record any contingent liability in its financial statements. Since its inception, the Company has not been required to make any payment under this indemnification provision. Unsettled customer trades amounted to \$201,884 at December 31, 2023. Fair Value of Financial Instruments: The carrying amount of the Company's financial instruments approximate their fair value because of the short maturity of the instruments. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe that such matters will have a material effect on the financial statements. Income Taxes: The Company is included in the consolidated federal and state income tax return of its Parent Company and its subsidiaries. The consolidated group of the Parent Company follows the pro rata method of allocating the U.S. and State consolidated tax liability among the participants generally in proportion to their contribution to the consolidated U.S. and State taxable income. Income tax expense is the total of current year income tax due or refundable (if any), and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. {8}------------------------------------------------ #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (continued) A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. There were no material unrecognized tax positions at December 31, 2023. The Company is subject to U.S. federal income tax as well as income tax of the state of Florida. The Company is not subject to examination by taxing authorities for years prior to 2020. Leases: Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases are recognized on a straight-line basis over the lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. These amounts are determined based on the present value of remaining minimum lease payments, discounted using the Company's incremental borrowing rate as of the date of adoption. Capital Contribution: On July 26, 2023, the Board of Directors of Bradesco Bank approved a cash capital infusion in the amount of \$4,500,000 for Bradesco Investments Inc. The capital contribution for Bradesco Investments Inc was provided on September 26, 2023. Recently Issued Accounting Pronouncements: There are no recently issued accounting pronouncements that would materially impact the Company's financial statements and related disclosures. #### **NOTE 2 - FULLY DISCLOSED CLEARING AGREEMENT** The Company has a fully disclosed clearing agreement with Pershing whereby customer accounts are cleared and carried by Pershing, LLC. The agreement calls for the Company to maintain a minimum deposit balance in an account maintained by Pershing, LLC. At December 31, 2023, the Company had \$500,000 of cash on deposit to satisfy this requirement. Either party may terminate the agreement without cause upon the receipt of 90 days written notice. This deposit is included in the balance of deposits with clearing firm in the statement of financial condition. #### **NOTE 3 - FAIR VALUE** Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability. {9}------------------------------------------------ #### **NOTE 3 - FAIR VALUE** (continued) The carrying amounts of financial assets in the statement of financial condition approximate their estimated fair value because of their short maturity. Cash and due from banks and deposits with clearing firm amounting to \$9,839,079 at December 31, 2023 are not considered Level 1 as they do not have quoted prices and are cash. #### **NOTE 4 - INCOME TAXES** As of December 31, 2023, the Company had a deferred tax asset as follow: | Deferred tax asset | | |-----------------------|---------------| | Deferred compensation | \$
302,580 | | Depreciation expense | 22,673 | | | | | Deferred tax asset | \$
325,253 | No valuation allowance was considered necessary at December 31, 2023. #### **NOTE 5 - RELATED PARTIES** Balances with related parties included in the statement of financial condition and statement of operations at and for the year ended December 31, 2023: | Assets | | |-----------------------------------|-----------------| | Cash and due from banks | \$
1,791,692 | | Due from affiliates | 203,318 | | Deferred tax asset | 325,253 | | Prepaid expenses and other assets | 60,571 | | | \$
2,380,834 | | Liabilities | | | Due to affiliates | \$
656,035 | Cash and due from banks represents cash maintained in a demand deposit account with the Parent. {10}------------------------------------------------ #### **NOTE 5 - RELATED PARTIES** (continued) The Company has entered into reciprocal service agreements with its Parent Company and affiliates. The Company is a wholly owned subsidiary of its Parent Company and operating results may differ from those that may exist if the Company operated as a stand-alone entity. In exchange for services, the Company pays fees or receives allocation reimbursements from its Parent Company and/or affiliates, which cover costs such as salaries and benefits, and occupancy. Due to affiliates represents amounts the Company owes its Parent Company and/or affiliates and due from affiliates represents amounts owed to the Company from Its Parent Company or affiliates for such services per these service agreements. Deferred tax asset consists primarily of balances related to tax benefits used by the Parent Company on the consolidated tax return and tax overpayment which the Company is entitled to. #### **NOTE 6 - RESERVE AND POSSESSION OR CONTROL REQUIREMENTS** The Company claims an exemption from 17 C.F.R.240.15c3-3(k) under Rule 15c3-3, paragraph (k)(2)(ii) "the exemption provisions" and met the exemption provisions throughout the most recent fiscal year January 1, 2023 to December 31, 2023 without exception. #### **NOTE 7 - NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC rule 15c3-1 ), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company was above its minimum net capital requirement for 2023. At December 31, 2023, the Company's net capital as defined by Rule 15c3-1 totaled \$6,473,670 which was \$6,302,027 in excess of its net capital requirement of \$171,643. The Company's aggregate indebtedness to net capital ratio was .40 to 1 at December 31, 2023. #### **NOTE 8 - LEASES** The Company enters into leases in the normal course of business primarily for its operating premises. The Company's lease has a remaining term of approximately 12 years, which includes renewal option to extend the lease up to 10 years and an option to terminate the lease within 7 years from the contract commencement date of the lease. Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-ofuse assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payment over the least term. The Company uses its incremental borrowing rate at lease commencement date to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company's incremental borrowing rate is based on the Federal Home Loan Bank advance offering rates, adjusted for the lease term and other factors. {11}------------------------------------------------ ## **NOTE 8- LEASES** (continued) Right-of-use assets and lease liabilities by lease type, and the associated statement of financial condition classifications, are as follows: | | December 31, 2023 | |---------------------------|-------------------| | Right-of-use assets: | | | Operating leases | 839,739 | | | | | Total right-of use assets | 839,739 | | | | | Lease liabilities: | | | Operating leases | 850,005 | | | | | Total lease liabilities | 850,005 | #### Lease Obligations Future undiscounted lease payments for operating leases with initial terms of one year or more as of December 31, 2023 are as follows: | | Operating Leases | | |-----------------------------------|------------------|--| | 2024 | 82,981 | | | 2025 | 85,472 | | | 2026 | 88,038 | | | 2027 | 90,680 | | | 2028 | 93,397 | | | Thereafter | 698,488 | | | Total undiscounted lease payments | 1,139,056 | | | Less: imputed interest | (289,051) | | | Net lease liabilities | 850,005 | | ## **NOTE9-SUBSEQUENT EVENTS** The Company has evaluated subsequent events for recognition and disclosure through March 22, 2024, the date the financial statements were available for issuance. No material subsequent events were identified. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.