# SCHRODER FUND ADVISORS LLC X-17A-5 (2021-03-01) — Broker-dealer annual report
- Company: SCHRODER FUND ADVISORS LLC
- Form: X-17A-5
- Filed: 2021-03-01
- Period: 2020-12-31
- Accession: 0000846986-21-000001
- CIK: 846986
- File #: 8-40973
- Material weakness: No
- Auditor: Ernst & Young LLP
- Auditor location: New York, NY
- Contact: Robert Fortino
- Phone: 2127514422
- Signed by: Mark Hemenetz (Chairman & Director)
Original filing: https://www.sec.gov/Archives/edgar/data/846986/000084698621000001/SFAPubl2020.pdf
---
{0}------------------------------------------------
# **Schroder Fund Advisors LLC**
Statement of Financial Condition December 31, 2020
{1}------------------------------------------------
UNITED STATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549
OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response ...... 12.00
SEC FILE NUMBER
8-40973
# **ANNUAL AUDITED REPORT FORM X-17A-5 PARTlll**
FACING PAGE
Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder
| | REPORT F OR THE PERIOD BEGINNING 01/01/20 | AND ENDING 12/31/20
~~~~~~~~~~ | | |
|-----------------------------------------------------------------------------------------------|---------------------------------------------------------------------|-----------------------------------|--------------------------------|--|
| | MM/DD/YY | | MMIDD/YY | |
| | A. REGISTRANT IDENTIFICATION | | | |
| NAME OF BROKER-DEALER: Schroder Fund Advisors LLC | | | OFFICIAL USE ONLY | |
| ADDRESS OF PRJNClPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
7 Bryant Park | | | FIRM 1.0. NO. | |
| | (No. and Street) | | | |
| New York | NY | | 10018-3706 | |
| (City) | (State) | | (Zip Code) | |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | |
| | | | (Area Code - Telephone Number) | |
| | B. ACCOUNTANT IDENTIFICATION | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Ernst & Young LLP | (Name - if individual, state last, first, middle name) | | | |
| 5 Times Square | New York | NY | 10036 | |
| (Address) | (City) | (State) | (Zip Code) | |
| CHECK O NE:
I./ I
Certified Public Accountant
B
Public Accountant | Accountant not resident in United States or any of its possessions. | | | |
| | FOR OFFICIAL USE ONLY | | | |
| | | | | |
*\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240. l 7a-5(e)(2)*
> Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
SEC 1410 (11-05)
{2}------------------------------------------------
#### **OATH OR AFFIRMATION**
| ________________________
J, _M_a_r_k_H_e_m_e_n_e_tz | , swear (or affirm) that, to the best of |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
| my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | |
| -------------------------------------------'
Schroder Fund Advisors LLC | as |
| of December 31 | are true and correct. I further swear (or affirm) that |
| | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account |
| classified solely as that of a customer, except as follows: | |
| | |
| NIA | |
| | |
| | |
| | Signature |
| | Chairman & Director |
| \ | Title |
| A-4¥~~ | ANGEL LANIER |
| Notary Public | NOTARY ruauC-STATE OF NEW YORI<' |
| | No. 01 LA628461 ll |
| This report ** contains (check all applicable boxes): | Ou&lified in Kings County |
| 0 (a) Facing Page. | My Commission Expires 11-09-202 i |
| 0 (b) Statement of Financial Condition. | |
| O (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). | |
| 0
( d) Statement of Changes in Financial Condition.
D (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | |
| D (t) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | |
| | |
| § (g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3. | |
| (i)
Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | |
| D U) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule 15c3-1 and the | |
| Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | |
| | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of |
| consolidation.
0 (1) An Oath or Affirmation. | |
| D (m) A copy of the SlPC Supplemental Report. | |
| | D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. |
| **For conditions of confidential treatment of certain portions of this filing, see section 240. 17a | 5(e)(3). |
{3}------------------------------------------------
# Schroder Fund Advisors LLC Index
| Report of Independent Registered Public Accounting Firm 1 | |
|------------------------------------------------------------|--|
| Financial Statement | |
| Statement of Financial Condition 2 | |
| Notes to Statement of Financial Condition 3-5 | |
{4}------------------------------------------------
Ernst & Young LLP 5 limes Square New York, NY 10036-6530 Tel: + 1212 773 3000 Fax: +1212 773 6350 ey.com
# Report of Independent Registered Public Accounting Firm
The Member and Board of Managers of Schroder Fund Advisors LLC
#### Opinion on the Financial Statement
We have audited the accompanying statement of financial condition of Schroder Fund Advisors LLC (the "Company") as of December 31, 2020, and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material espects~ the financial position of the Company at December 31, 2020, 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 the Company's 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We have served as the Company's auditor since 2018.
New York, New York March 1, 2021
{5}------------------------------------------------
# **Schroder Fund Advisors LLC Statement of Financial Condition December 31 , 2020**
| Assets | |
|------------------------------------------------------------------------|---------------|
| Cash | \$2,234,951 |
| Due from Parent | 148,511 |
| Prepaid regulatory fees | 108,445 |
| Accrued income relating to investment company share selling activities | 990,893 |
| Receivable from affiliate | 50,833 |
| Total assets | \$3,533,633 |
| Liabilities and member's equity | |
| Liabilities | |
| Due to affiliate | \$649,129 |
| Accrued expenses | 62,913 |
| Total liabiliti.es | 7
12,042 |
| Member's equity | |
| Common stock, 200 membership units | 50,000 |
| Additional paid-in capital | 1,119,942 |
| Retained earnings | 1,651
,649 |
| Total member's equity | 2,821
,591 |
| Total liabilities and member's equity | \$3,533,633 |
The accompanying notes are an integral part of this statement of financial condition.
{6}------------------------------------------------
## 1. Organization and nature of operations
Schroder Fund Advisors LLC (the "Company"), is a Delaware limited liability company that succeeded in interest to Schroder Fund Advisors Inc. ("SF A Inc."), a New York corporation, through a merger transaction on June 30, 20 I 0. Schroder Investment Management North America Jnc. (the "Parent") is the sole member of the Company. The Parent is a wholly owned subsidiary of Schroder US Holdings lnc., which is indirectly wholly owned by Schroders pie. SF A rnc., the predecessor, was incorporated on February 17, 1989. The Company is a registered broker-dealer with the Securities and Exchange Commission, a member of the Financial Industry Regulatory Authority Inc. ("FINRA"), and member of the Securities Lnvestor Protection Corporation ("SIPC"). The Company is a limited purpose broker-dealer set up to act as the placement agent for companies in the Schroders pie group and to hold the licenses of the registered salespeople in the United States. The Company currently acts as the placement agent for certain Hartford mutual funds as described in note 2.
## 2. Significant accounting policies
#### Cash
Cash is on deposit at Citibank, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts with this financial institution and believes it is not subject to any significant credit risk on cash.
#### Revenue from contracts with customers
Revenue from contracts with customers includes revenue relating to the Company's services provided to help facilitate investment companies share selling activities and administration fees. All investment companies doing business with the Company are part of the Hartford mutual fund complex.
Revenue relating to investment company share selling activities is recognized as income in the periods in which the services are performed based on assets under management of the Hartford mutual funds as per Additional Compensation Agreement entered into with Hartford Funds Management Company LLC. The Company believes that its perfonnance obligation is satisfied each reporting period (on a monthly basis) as the services are performed.
Revenue from administration fees is recognized as income in the periods in which the services are performed based on the number of registered representatives employed by Schroder Adveq Management US Inc. as per the Client Introduction and Services Agreement. The Company believes that its performance obligation is satisfied each reporting period (on a monthly basis) as the services are performed.
The Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) 606, "Revenue from Contracts w ith Customers", became effective for the Company on January I, 2018. The Company recognizes revenue when (or as) services are transferred to its customers. Revenue is recognized based on the amount of consideration that management expects to receive in exchange for these services in accordance with the terms of the contract with the customer. To determine the amount and timing of revenue recognition, the Company must (I) identify the contract with the customer; (2) identify the perfo1111ance obligations in the contract; (3) detenujne the transaction price; ( 4) a llocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the Company satisfies a performance obligation.
{7}------------------------------------------------
#### 2. Significant accounting policies (continued)
#### Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates and these differences could be significant.
#### Income taxes
The Company is a single member limited liability company that is disregarded for income tax purposes. Its taxable income is included in the consolidated U.S. federal income tax return of Schroder US Holdings lnc. and in combined state and local tax returns with certain affiliates of Schroder US Holdings I11c. The Company's policy is to accrue income taxes on a separate return basis pursuant to ASC 740, "Accounting for Income Taxes".
The Company has a tax sharing agreement with the Parent and Schroder US Holdings Inc. This agreemenl gent:rally provides that the Company's income Lax expt:nse is delem1ined on a separalt: company basis, except for intercompany transactions which are eliminated. The Company's operations do not give rise to temporary differences. Accordingly, the Company's tax expense is payable to Schroder US Holdings Inc. in accordance with the tax sharing agreement.
## 3. Related party transactions
Salaries and general and administrative costs of the Company are initially borne by the Parent and allocated to the Company under the ESPA.
The Parent acts as the paying agent for the Company and amounts due are accrued and included within ' Due to Parent' or ' Due from Parent' on the Statement of Financial Condition. Amounts due from and to related parties are short term in nature and settle on a monthly basis.
Current tax expense determined pursuant to the intercompany tax sharing agreement described in the Accounting Policies section above is settled through the ' Due to affiliate' account. At December 31, 2020 substantially all of t he balance on this account related to taxes payable.
Administration fee income pursuant to the Client Introduction and Services Agreement entered into with Schroder Adveq Management US Inc. is settled through the ' Receivable from affiliate' account. At December 3 l , 2020 the entire balance on this account related to administration fee income.
## 4. Income taxes
Schroder Fund Advisors LLC, a disregarded LLC, is a member of the consolidated group of US companies parented by Schroder US Holdings Inc.
Schroder US Holdings [nc. and its subsidiaries have open tax years with the US Internal Revenue Service from 2017 onwards, with New York State from 2007 onwards and with New York City from 2009 onwards. The Group is currently under audj t in New York City for 2009-2017, 2015- 2020 tax years and New York State for 2007-2013, 2016-2018 tax years.
{8}------------------------------------------------
#### 4. Income taxes (continued)
The Company does not have any tax, interest or penalties related to uncertain tax positions for the year ended December 3 1, 2020. The Company does not believe there will be any material changes in its unrecognized tax positions over the next twelve months.
## 5. Regulatory capital requirements
The Company is subject to the Securities and Exchange Commission's Net Capital Rule 15c3-l, which specifies uniform minimum net capital requirements for all registered brokers and dealers. The Company's aggregate indebtedness, as defined, shall not exceed 15 times net capital, as defined. As of December 31 , 2020, the Company bad net capital, as defined, of \$1,522,909 which was \$1,475,440 in excess of its net capital requirement of \$47,469, and its ratio of aggregate indebtedness to net capital was 0.468 to I. Dividends and other capital withdrawals of the Company are subject to certain notifications and restrictive provisions of Rule I 5c3-I.
The Company has claimed exemption from the provision of the Securities and Exchange Commission's Rule I 5c3-3 pursuant to the (k)(2)(i) exemptive provision as the Company does not hold funds or securities for, or owe money or securities to, customers.
## 6. Indemnifications
In the nonnal course of business, the Company enters into contracts that contain a variety of representations and warranties, and which provide general indemnifications. The Company's maximum exposure in connection with these contracts is not currently calculable, as this would involve future claims that may be made against the Company that have not occun·ed.
## 7. COVID-19
Beginning in January 2020, g lobal financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-1 9. The outbreak of COV1D-l 9 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 bave and may continue to adversely affect tbe global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Company's perfonnance.
In line with global market prices aligned to the mutual fund complex, the company did experience decreased revenue during the second quarter of financial year 2020. Subsequent market values have increased and revenues have returned to pre COVl D-19 levels.
## 8. Subsequent events
Management has evaluated the events and transactions that have occurred through March I, 2021 , the date the financial statements were issued, and noted no items requiring adjustment to the financial statements or additional disclosures.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.