# SAL EQUITY TRADING, GP X-17A-5 (2023-03-01) — Broker-dealer annual report - Company: SAL EQUITY TRADING, GP - Form: X-17A-5 - Filed: 2023-03-01 - Period: 2022-12-31 - Accession: 0000869101-23-000001 - CIK: 869101 - File #: 8-43174 - Type: Broker-dealer - Material weakness: No - Auditor: EisnerAmper, LLP - Auditor location: New York, NY - Contact: Robert Sack - Phone: 610-617-2812 - Email: rob.sack@sig.com - Website: sig.com - Signed by: Robert C Sack (Treasurer) Original filing: https://www.sec.gov/Archives/edgar/data/869101/000086910123000001/saletsfc.pdf --- {0}------------------------------------------------ | SECURITIES AND EXCHANGE COMMISSION | 0MB APPROVAL
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hours perresponse. 12 | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|-------------------------------------|--------------------------------------------|--|--| | | | SFC Fllf NUMBER | | | | | | FORM X-17A-5 | | 8-43174 | | | | | PART Ill | | | | | | Information Required Pursuant to Rules 17a-S, Ua-12, and 18a-7 under the Securities Exchange Act of 1934
FILING FOR THE PERIOD BEGINNING Q 1/01/2022 | FACING PAGE
MM/00/YY | | AND ENDING 12/31/2022
MM/00/YY | | | | | | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: SAL EQUITY TRADING, GP | | | | | | | TYPE OF REGISTRANT (check all applicable boxes}:
0 Brokerdealer
D Check here if re�pondent 1s also an OTC derivatives dealer
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.}
401 CITY AVENUE, SUITE 220 | [1 Security-based swap dealer | | D Major security-based swap participant | | | | | (No1nd Street) | | | | | | BALA CYNWYD | PA | | 19004 | | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | ROBERT SACK | | | | | | | (Name) | 610-617-2812
(Area Code -Telephone N11mber) | ROB.SACK@SIG.COM
(Email Address) | | | | | | | | | | | | | 8. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
EISNERAMPER, LLP | | | | | | | 733 THIRD AVENUE | (Name - if individual. �tate la�t. first, and middle name)
NEW YORK | NY | 10017 | | | | (Address)
09/29/2003 | (City) | (State)
274 | (lip Code) | | | | | | | (PCAOB R,g;,.,aaccountant must be supported by d statement of facts and circumstances relied 011 as the bosis or the exemption. See 17 | FOR OFFICIAL USE ONLY | | | | | **CFR 240.17a-S(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 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, ROBERT SACK | , swear (or affirm) that, to the best of my knowledge and belief, the | | | |-------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|-------|--| | financial report pertaining to the firm of SAL EQUITY TRADING. GP | | as of | | | 12/31 | , 2�, is true and correct. I further swear (or affirm) that ne
ther the company nor any | | | | as that of a customer. | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | | | | | | | r-·-------�Silif![n�a!!;tU!:l!!r�: | | | |------------------------------------------------------------|--------------|-------------------------------------------------------------------------| | Commonwt-d!·.� of Pennsylvani• . �r>J -, Se, | | | | MICH,\EL ,. "OLLEN . Notaryftt'fe,
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• | | | Commfss1on Numbe, • ,.'S, � 7 | | My Comm1ss1on Exp,res June , --J.�B-��'.H,A,,S,u_-+-R ______________ _ | | | | | 7l'l *C j\_ /#�* a./r/4;, Notary Public #### This filing\*\* contains (check all applicable boxes): - ii (a) Statement of financial condition. - ii (b) Notes to consolidated statement of financial condition. - D (cl 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 or 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 2'10.18a-l, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.lSa-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibt A to 17 CFR 240.15c3-3. - D (kl Computation for determination of security-based swap reserve requirements pursuant to Exhibit 8 to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a•4, as applicable. - 0 {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 240.1Sc3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3{pl(2) or 17 CFR 240.lSa-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-1, or 17 CFR 240.lSa-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 *or* 17 CFR 240.lSa-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. - ii (q) Oath *or* affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.lSa-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - 0 (s) Exemption report i� accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - � (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 examinati on of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.lSa-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-S or 17 CFR 240.lSa-7, as applicable. - Cl (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240. t 7a-S or 17 CFR 240.lSa-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. - 0 (y) Report describing any material inadequacies found to exist or found to have existed since the date or the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240. l 7a-12(k). - D (z) Other:--------------------------------------- 070 *request confidenciol ueotment of certain portions of this filing, see 17 CFR 240.17o-S(e)(3) or 17 CFR 240.18o-7(d)(2), os applicable.* {2}------------------------------------------------ (a general partnership) **STATEMENT OF FINA CIAL CONDITION** December 31, 2022 {3}------------------------------------------------ # **EISNERAMPER** **EisnerAmper LLP 733 Third Avenue New York, NY 10017 T 212.949.8700 F 212.891.4100** #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Partners of SAL Equity Trading, GP #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of SAL Equity Trading, GP (the "Entity") as of December 31, 2022 and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Entity as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opinion* This financial statement is the responsibility of the Entity's management. Our responsibility is to express an opinion on the Entity'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 Entity 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 re·asonable 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 acoounting 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 Entity's auditor since 2010. EISNERAMPER LLP New York, New York February 28, 2023 • -- **·EisnerArnper· 1s the brand name under which EsnerAmper LLP and Eisner Advsory Group LLC provide professional services EisnerAmper LLP and Eisner Advisory Group LLC are ,ndependently owned firms that practice 1n an alternative practice structure m accordance with the AICPA Code of Professional Conouct and applicable law, regu ations and profess1onlll standarcts. EisnerAmper LLP 1s a l censed CPA firm that provides attest services. and Eisner Advisory Group LLC and its subsidiary enlltes provide tax and business consulting services. Eisner Advisory Group LLC and its subs,d ary er>lllles are not licensed CPA firms** {4}------------------------------------------------ #### **Statement of Financial Condition** **December 31, 2022** (dollars in thousands) | Assets | | |---------------------------------------------------|--------------| | Receivable from clearing broker | 36,867
\$ | | Securities owned - at fair value | 9,975 | | Dividend receivable | 65 | | Accrued trading receivables | 11 | | Receivable from affiliates | 636 | | Exchange memberships - at cost (fair value \$498) | 573 | | Exchange shares - at cost (fair value \$1,682) | 131 | | Other assets | 160 | | | | | Total assets | \$
48,418 | | Liabilities and partners' capital | | | Order execution payables | 29
\$ | | Payable to affiliates | 13 | | Accrued expenses and other liabilities | 63 | | | | | Total liabilities | 105 | | | | | Partners' capital | 48,313 | | | | | Total liabilities and partners' capital | 48,418
\$ | {5}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2022** (dollars in thousands) #### **NOTE A. - ORGANIZATION** SAL Equity Trading, GP (the "Entity") is a registered broker-dealer with the Securities and Exchange Commission (the "SEC"). The Entity's designated examining regulatory authority is the Financial Industry Regulatory Authority, Inc. The Entity provides order execution services for affiliated registered broker-dealers. The Entity is owned 99.9% by SAL Equity Holding, LLC and 0.1 % by SAL Equity Partner, LLC. #### **NOTE B - SIGNIFICANT ACCOUNTING POLICIES** The Entity records purchases and sales of securities and related revenues and expenses on a trade-date basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. The Entity maintains cash in a deposit account which, at times, may exceed federally insured limits. Revenue from contracts with customers consists of order execution services provided to affiliates. Each time the Entity executes an order, it has fulfilled all performance obligations, and therefore, recognizes and records the revenue associated with order execution on a trade date basis. The Entity assessed certain financial assets measured at amortized cost for credit losses using a current expected credit loss ("CECL") methodology to estimate expected credit losses over the life of the financial asset, as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. Receivable from clearing brokers; the Entity has concluded that there are currently no expected credit losses based on the nature and contractual life or expected life of the financial assets held at each of the Entity's clearing brokers and clearing organizations. Certain trades and contracts are cleared through a centralize·d clearing organization and settled daily between the clearing organization and the Entity's prime broker, therefore limiting the amount of unsettled credit exposure. The Entity monitors the capital adequacy of such organizations. This financial statement has been prepared in conformity with accounting principles generally accepted in the United States of America, which require the use of estimates by management. Actual results could differ from those estimates. {6}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2022** (dollars in thousands) # **NOTE C -FAIR VALUE OF FINANCIAL INSTRUMENTS** The Entity measures its financial instruments in accordance with the Financi al Accounting Standards Board Accounting Standards Codification Section for Fair Value Measurements. This codification section clarifies the definition of fair value financial reporting, establishes a framework for measuring fair value and requires. additional disclosures about the use of fair value measurements. Fair Value Measurements establishes a fair value hierarchy and specifies that a valuation technique used to measure fair value shall maximize the use of observable inputs and minimize the use of unobservable inputs. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transact on between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under Fair Value Measurements are described below: - Level 1: Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Entity has the ability to access at the measurement date; - Level 2: Inputs that are observable for substantially the full term of the asset or liability (other than quoted prices for the specific asset or liability in an active market), including quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilitiies in a nonactive market, inputs other than quoted prices, and inputs derived principally from or corroborated by observable market data by correlation or otherwise; and - Level 3: Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). As required by the Codification Section for Fair Value Measurements, financial instruments are classified within the level of the lowest significant input considered in determining fair value. Financial instruments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement. The table that follows sets forth information about the level within the fair value hierarchy at which the Entity's financial instruments are measured at December 31, 2022. {7}------------------------------------------------ #### *Notes to Statement of Financial Condition December 31, 2022* (dollars in thousands) #### *NOTE C - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)* Assets measured at fair value: | Description | Totals | | Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1) | | Significant
Other
Observable
Inputs (Level 2) | | |--------------------------|--------|----------|----------------------------------------------------------------------------------|-------|--------------------------------------------------------|-------| | Debt Securities: | | | | | | | | Government (Treasury) | \$ | 9,975 \$ | | | \$ | 9,975 | | (a) Exchange shares | | 1,682 | | 1,682 | | | | (b) Exchange memberships | | 498 | | | | 498 | (a) Exchange shares reflected on the statement of financial condition at cost are valued in the above table at the last reported contracted sales price as of the valuation date. (b) Exchange memberships reflected on the statement of financial condition at cost are valued in the above table at either the last reported sales price as of the valuation date or at the mean between the last bid and last offer price as of the valuation date if the last reported sales price falls outside of this spread. Debt securities are generally valued using broker or dealer quotations or alternative pricing sources on the last business day of the year. #### *NOTE D - SECURITIES OWNED* Securities owned are summarized as follows: | | Securities
Owned | | | | |-----------------|---------------------|-------|--|--| | Debt securities | \$ | 9,975 | | | | | \$ | 9,975 | | | #### *NOTE E - RECEIVABLE FROM CLEARING BROKER AND CONCENTRATION OF CREDIT RISK* The clearing and depository operations for the Entity's securities transactions are provided by Merrill Lynch Professional Clearing Corp. At December 31, 2022, all of the securities owned and the amounts receivable from clearing broker reflected on the statement of financial condition are securities positions with and amounts due from this clearing broker. {8}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2022** (dollars in thousands) #### **NOTE F - RELATED PARTY TRANSACTIONS** The Entity is affiliated through common ownership with Susquehanna International Group, LLP ("SIG") and Susquehanna Technology Management, Inc. ("STMI"). SIG acts as a common payment agent for the Entity and various affiliates for various direct and indirect operating expenses. The Entity pays for the indirect costs at an amount agreed upon between the Entity and SIG based on allocations determined at SIG's discretion. Included in payable to affiliates is \$13 related to these direct and indirect operating costs. The Entity has a sublicensing agreement with SIG. The agreement allows the Entity to utilize intellectual property and research and development, licensed by SIG from Wide Wing Financing LLC ("Wide Wing"), an entity affiliated through common ownership. Wide Wing is the exclusive owner of the intellectual property and all research and development related thereto. As consideration for the sublicense, the Entity pays SIG an annual sublicensing fee equal to a percentage of the Entity's net trading profits, if any, as defined in the sublicensing agreement. STMI provides administrative and technology services to the Entity and various affiliates. The Entity pays a monthly management fee for these services based on allocations determined at STMl's discretion. Included in payable to affiliates is less than \$1 related to these services. The Entity executes trades for affiliated broker-dealers for which it receives a fee based on monthly order execution charges, plus a surcharge to cover other costs. As of December 31, 2021, these affiliates owed the Entity \$632 related to these fees. Because of their short-term nature, the fair values of the payable to and receivable from affiliates approximate their carrying amounts. The Entity and various other entities are under common ownership and control. As a result, management can exercise its discretion when determining which entity will engage in new or current business activities and/or trade new products. Therefore, the financial position presented herein may not necessarily be indicative of that which would be obtained had these entities operated autonomously. #### **NOTE G -EXCHANGE MEMBERSHIPS/SHARES** The amounts included in exchange shares on the statement of financial condition that represent both an ownership interest and the right to conduct business on the exchanges and are held for operating purposes by the Entity to conduct business on the exchange and are accounted for as an ownership interest at cost with appropriate consideration for impairment. Management believes there is no material impairment to recognize on these exchange shares as of December 31, 2022. The amounts included in exchange memberships on the statement of financial condition that represent the right to conduct business on an exchange, but not an ownership interest in the exchange, are accounted for as intangible assets at cost with potential impairment determined under Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other. Management believes there is no material impairment to recognize on these exchange memberships as of December 31, 2022. {9}------------------------------------------------ #### *Notes to Statement of Financial Condition December 31, 2022* **(dollars in thousands)** # *NOTE H - FINANCIAL INSTRUMENTS AND RISK* **Market risk represents the potential loss that can be caused by increases or decreases in the fair value of financial instruments resulting from market fluctuations.** **Interest rate risk is the risk that the fair value or future cash flows of fixed income or rate sensitive financial instruments will increase or decrease because of changes in interest rates. Generally:, the value of fixed income securities will change inversely with changes in interest rates. As interest rates rise, the fair value of fixed income securities tends to decrease. Conversely, , as interest rates fall, the fair value of fixed income securities tends to increase. This risk is generally greater for long-term securities than for short-term securities.** #### *NOTE I - INCOME TAXES* **No provision for federa! income taxes has been made because the Entity is a partnership and, therefore, is not subject to federal income taxes. The Entity is currently not subject to state or local income taxes.** **At December 31, 2022, management has determined that there are no material uncertain income tax positions.** #### *NOTE J - NET CAPITAL REQUIREMENT* **As a registered broker-dealer, the Entity is subject to the SEC's Uniform Net Capital Rule 15c3-1. The Entity computes its net capital under the alternative method permitted by the rule, which requires it to maintain minimum net capital of \$250. As of December 31, 2022, the Entity had net capital of \$1 5,693, which exceeded its requirement of \$250 by \$15,443.** #### *NOTE K - LITIGATION* **On November 1, 2010, the Official Committee of Unsecured Creditors (the "Committee"), which represents the bankruptcy estate of Tribune Company ('Tribune"), filed suit in the United States Bankruptcy Court for the District of Delaware against former Tribune s,hareholders (including the Entity and certain of its affiliates (the "Susquehanna Defendants")), Tribune's former officers and directors, Tribune's financial advisors, Sam Zell and others who benefited from Tribune's 2007 leveraged buyout (the "LBO") (Official Comm. of Unsecured Creditors of Tribune Co. v. FitzSimons). Among other things, the Committee seeks to unwind the LBO by asserting that the buyout payments to tine former Tribune shareholders (including the Susquehanna Defendants) constituted intentional fraudulent conveyances by Tribune. This case was transferred to the United States District Court of the Southern District of New York ("SONY") .and the claims in this action were transferred to a litigation trust. The former Tribune shareholder defendants in this action (including the Susquehanna Defendants) filed comprehensive threshold motions to dismiss. On January 6, 2017, the SONY granted the motion to dismiss, which included the only claim that was pending against the Susquehanna Defendants. In April 2019, the litigation trust filed a motion with the SONY to amend its complaint to add a constructive fraudulent transfer claim against the Susquehanna Defendants and other former Tribune shareholders. The SONY denied this motion. On July 12, 2019, tine litigation trust appealed to the 2nd Circuit the SDNY's dismissal of its intentional fraudulent conveyance claims and its denial of leave to file a constructive fraudulent conveyance claim. On August 20, 2021, the 2nd Circuit issued an opinion affirming the SDNY's dismissal of the intentional fraudulent transfer claim and denial of leave to add a constructive fraudulent transfer claim. On January 14, 2022, the litigation trust filed a petition for a writ of certiorari in the United States Supreme Court, which petition was denied in February 2022. As a result, the dismissal of the litigation trust's claims against the Susquehanna Defendants has become final, thereby ending this litigation as against the Susquehanna Defendants.** {10}------------------------------------------------ #### **Notes to Statement of Financial Condition December 31, 2022** *(dollars in thousands)* # **NOTE L • SUBSEQUENT EVENTS** *Subsequent to year end, a partner made a capital contribution of \$3.* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.