# JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC X-17A-5/A (2023-02-27) — Broker-dealer annual report - Company: JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC - Form: X-17A-5/A - Filed: 2023-02-27 - Period: 2022-12-31 - Accession: 0000872873-23-000002 - CIK: 872873 - File #: 8-43582 - Type: Broker-dealer - Material weakness: No - Auditor: Ernst & Young, LLP - Auditor location: Boston, MA - Contact: Kat Korovina - Phone: 4374236270 - Email: jlong@jhancock.com - Website: jhancock.com - Signed by: Jeffrey Long (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/872873/000087287323000002/jhimd_annual_financials1.pdf --- {0}------------------------------------------------ # F INANCIAL S TATEMENTS AND S UPPLEMENTAL I NFORMATION John Hancock Investment Management Distributors LLC Year Ended December 31, 2022 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ | | 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 01/01/2022 | __ AND ENDING 12/31/2022 | | | | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF FIRM: John Hancock Investment Management Distributors, LLC | | | | | TYPE OF REGISTRANT (check all applicable boxes):
@ Broker-dealer
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ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | [] Major security-based swap participant | | | 200 Berkeley Street | | | | | | (No. and Street) | | | | Boston | MA | | 02116 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Jeffrey Long | 617-663-4343 | | JLong@jhancock.com | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Ernst & Young, LLP | | | | | | (Name - if individual, state last, first, and middle name) | | | | 200 Clarendon Street | Boston | MA | 02116 | | (Address) | (City) | (State) | (Zip Code) | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable | | | FOR OFFICIAL USE ONLY | | | | * Claims for exemption from the requirement that the annual reports of an independent public | | | | {2}------------------------------------------------ | Jeffrey Long | | |--------------|--| | | | ![](_page_2_Picture_4.jpeg) - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION YEAR ENDED DECEMBER 31, 2022** # **Contents** | Report of Independent Registered Public Accounting Firm 1 | | |-----------------------------------------------------------------------------------------------------------------|--| | Financial Statements | | | Statement of Financial Condition 2 | | | Statement of Operations 3 | | | Statement of Changes in Shareholder's Equity 4 | | | Statement of Cash Flows 5 | | | Notes to Financial Statements 6 | | | Supplemental Information | | | Schedule I – Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities
and Exchange Commission 15 | | | Schedule II - Statement Pursuant to Rule 15c3-3 of the Securities and Exchange | | | Commission 16 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 Tel: +1 617 266 2000 Fax: +1 617 266 5843 ey.com #### **Report of Independent Registered Public Accounting Firm** To the Shareholders and the Board of Directors of John Hancock Investment Management Distributors LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of John Hancock Investment Management Distributors LLC (the "Company") as of December 31, 2022, the related statements of operations, changes in shareholder's equity, and cash flows for the year then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations, changes in shareholder's equity, and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles. #### **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. 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. #### **Supplemental Information** The accompanying information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. Such information is the responsibility of the Company's management. Our audit procedures included determining whether the information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information. In forming our opinion on the information, we evaluated whether such information, including its form and content, is presented in conformity with Rule 17a-5 under the Securities Exchange Act of 1934. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. *We have served as the Company's auditor since 1991.* February 24, 2023 {5}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31, 2022** | Assets | |--------| |--------| | Cash & cash equivalents | | 378,229 | |----------------------------------------------------------|----|-----------------| | Money market securities - trading (cost \$48,054,682) | | 48,054,683 | | Accounts receivable | | 1,229,248 | | Deferred selling commissions | | 534,491 | | Due from affiliated companies | | 4,267,574 | | Intangible assets, net | | 1,539,665 | | Software, net | | 621,274 | | Other assets | | 632,556 | | Total assets | \$ | 57,257,720 | | | | | | Liabilities | | | | Accounts payable and accrued expenses | \$ | 16,536,788 | | Commissions and distribution expenses payable | | 5,144,108 | | Due to affiliated companies | | 11,525,896 | | Deferred income taxes, net | | 309,681 | | Total liabilities | | 33,516,473 | | | | | | Shareholder's equity | | | | Common stock (\$1.00 par value; 1,000 shares authorized, | | | | issued and outstanding) | | 1,000 | | Additional paid-in capital | | 1,796,251,129 | | Retained earnings (deficit) | | (1,772,510,882) | | Total shareholder's equity | | 23,741,247 | | Total liabilities & shareholder's equity | | 57,257,720 | {6}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2022** | Revenues | | | |-----------------------------------------------------|----|---------------| | Selling commissions | | 12,968,415 | | Rule 12b-1 service fees | | 108,288,790 | | Other revenue | | 653,336 | | Total revenues | | 121,910,541 | | Expenses | | | | Selling commissions | | 23,267,504 | | Rule 12b-1 service fees | | 81,177,624 | | Marketing support expenses | | 45,086,820 | | Administrative Services Expense | | 142,965,936 | | Other selling, general, and administrative expenses | | 15,264,377 | | Total expenses | | 307,762,261 | | Income (loss) before income taxes | | (185,851,720) | | Income tax expense (benefit) | | (38,720,444) | | Net income (loss) | \$ | (147,131,276) | {7}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY YEAR ENDED DECEMBER 31, 2022** | | Common | Additional | Retained | Total Shareholder's | |----------------------------|----------|------------------|--------------------|---------------------| | | Stock | Paid-in Capital | Earnings (Deficit) | Equity | | Balance at January 1, 2022 | \$ 1,000 | \$ 1,644,651,129 | \$ (1,625,379,746) | \$ 19,272,383 | | Currency translation | | | | | | adjustment | - | - | 140 | 140 | | Net income (loss) | - | - | (147,131,276) | (147,131,276) | | Capital contributions by | | | | | | Parent | - | 151,600,000 | - | 151,600,000 | | Balance at December 31, | | | | | | 2022 | \$ 1,000 | \$ 1,796,251,129 | \$ (1,772,510,882) | \$ 23,741,247 | {8}------------------------------------------------ ### **STATEMENT OF CASH FLOWS** #### **YEAR ENDED DECEMBER 31, 2022** #### **Operating Activities** | Net income (loss) | \$ (147,131,276) | |--------------------------------------------------------------------------------------|------------------| | Adjustments to reconcile net income to net cash provided by operating
activities: | | | Net currency translation (gains) losses | 140 | | Net (subscriptions) redemptions of money market securities | 2,719,072 | | Amortization of deferred selling commissions | 1,863,929 | | Amortization of software and other intangible assets | 2,383,436 | | Change in operating assets and liabilities: | | | Accounts receivable | 744,414 | | Deferred selling commissions, excluding amortization | (1,285,693) | | Deferred income taxes | (100,133) | | Due to/from affiliated companies | (5,929,523) | | Other assets | 163,501 | | Accounts payable and accrued expenses | (3,037,912) | | Commissions and distribution expenses payable | (1,752,608) | | Net cash provided by (used in) operating activities | (151,362,653) | | Financing Activity | | | Capital contributed by Parent | 151,600,000 | | Net cash provided by (used in) financing activities | 151,600,000 | | Net increase (decrease) in cash | 237,347 | | Cash and cash equivalents at beginning of year | 140,882 | | Cash and cash equivalents at end of year | \$
378,229 | {9}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC NOTES TO FINANCIAL STATEMENTS** # **Note 1 – Organization and Description of Business** John Hancock Investment Management Distributors LLC ( the "Company") is a direct whollyowned subsidiary of John Hancock Investment Management LLC ("JHIM" or "Parent"). JHIM is a direct wholly-owned subsidiary of John Hancock Subsidiaries, LLC ("Subsidiaries"). Subsidiaries is a direct wholly-owned subsidiary of John Hancock Life Insurance Company (U.S.A.) ("JHUSA"). JHUSA is an indirect, wholly-owned subsidiary of John Hancock Financial Corporation ("JHFC"). JHFC is an indirect, wholly-owned subsidiary of Manulife Financial Corporation ("MFC"), a Canadian-based, publicly traded financial services holding company. The Company is a registered broker dealer under the Securities Exchange Act of 1934 (the "Act") and a Securities and Exchange Commission ("SEC") registered investment advisor under the Investment Advisers Act of 1940. The Company is also a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company was incorporated in the State of Delaware on January 19, 1991. The Company serves as the wholesale distributor and/or underwriter throughout the United States for the registered investment companies (the "Funds") managed by JHIM. The Company is a member of the Securities Investor Protection Corporation ("SIPC") through which customer accounts are protected in the event of the Company's insolvency up to \$500,000; including a maximum of \$250,000 for free cash balances. The Company does not open customer accounts or affect customer transactions and does not accept any customer funds or securities for deposit into any of the Company's accounts. The Company is a member of SIPC as a requirement of its membership in the Municipal Securities Rulemaking Board. # **Note 2 – Summary of Significant Accounting Policies** **Basis of Presentation**. These financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"), which require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. The Company's results and operations currently have not been impacted but may be adversely impacted by COVID-19 and the economic environment. The adverse effects include but are not limited to significant market volatility, low interest rates, increase in credit risk, foreign currency exchange rate volatility, increases in redemptions, and disruption of business operations. **Cash and cash equivalents.** Cash and cash equivalents includes cash and all highly liquid debt investments with a remaining maturity of three months or less when purchased. At times, cash may exceed the insurance limits of the Federal Deposit Insurance Corporation. Management believes its risk of loss is mitigated by investing through major financial institutions. **Money Market Securities.** The Company classifies its money market securities as trading securities and records these securities at fair value. Any change in fair value related to trading {10}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** securities is included in other revenue in the Statement of Operations. These securities include investments in money market registered investment companies. **Deferred Selling Commissions.** The Company pays a selling commission to the selling broker dealer for Class C-Shares. C-Share selling commissions are capitalized as deferred selling commissions and are amortized on a straight-line basis over a period not to exceed one year. The amortization periods are intended to approximate the period of time expected to be benefited, that is the period during which fees earned pursuant to Rule 12b-1 distribution plans are received from the Funds and Contingent Deferred Sales Charge (CDSC) payments are received from shareholders of the Funds upon redemption of C-shares. Upon receipt of CDSC payments, the Company records additional amortization to arrive at an estimate of the remaining unamortized deferred selling commission applicable to the shares redeemed. On an annual basis, the Company tests for impairment and none was noted for the year ended December 31, 2022. **Intangible Assets.** Intangible assets include the distribution network of sales agents and producers responsible for procuring business. As a result of the acquisition of John Hancock by MFC in 2004, \$16,936,000 was initially recognized as the fair value of the distribution networks. Distribution networks are amortized over their respective estimated lives in other selling, general, and administrative expenses. Management determined at inception that these other intangible assets have an estimated definite life of 28 years. Amortizing intangible assets are reviewed for impairment only upon the occurrence of certain triggering events. Impairments are recorded whenever the other intangible asset's fair value is deemed to be less than its carrying value. **Software**. Software consists of customer relationship management software and other software development costs for internal-use which are amortized on a straight-line basis up to a 5-year useful life. The amortization period commences when the software is ready for use, and is intended to approximate the period of time over which the Company will benefit from the functionality of the software. The Company assesses the expected future benefit of the software at least annually to determine whether the value of the asset should be impaired. **Fair Value Measurements.** Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (not a forced liquidation or distressed sale) between market participants at the measurement date; that is, an exit value. The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company's valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows: **1.** Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. {11}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** - 2. Level 2 Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. - 3. Level 3 Fair value measurements using significant non-market observable inputs. These include valuations for assets that are derived using data, some or all of which is not market observable data, including assumptions about risk. Money market securities are classified within Level 1 of the fair value hierarchy and based on quoted market prices. Additionally, there were no transfers into or out of Level 1, Level 2, or Level 3 during the year ended December 31, 2022. **Revenue Recognition.** Selling commissions are recorded on the trade date. CDSC commissions are recognized as income when received. Fees earned pursuant to Rule 12b-1 distribution plans are recorded in the period in which the service is rendered. Other revenue includes interest income which is recognized on an accrual basis. **Income Taxes.** The provision for federal income taxes includes amounts currently payable or recoverable and deferred income taxes, computed under the liability method, resulting from temporary differences between the tax and financial statement bases of assets and liabilities. A valuation allowance is established for deferred tax assets when it is more likely than not that an amount will not be realized. In accordance with the income tax sharing agreement in effect for the applicable tax year, the income tax provision (or benefit) is computed as if each entity filed a separate federal income tax return with tax benefits provided for operating losses and tax credits when utilized and settled by the consolidated group. Intercompany settlements of income taxes are made through an increase or reduction to due from affiliated companies. Such settlements occur on a periodic basis in accordance with the tax sharing agreements. **Foreign Currency Translation.** Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). Transactions in a foreign currency are initially recorded at the functional currency rate prevailing at the date of the transaction. Revenues and expenses are translated using the average exchange rates during the year. Gains or losses on foreign currency transactions are reflected in earnings. # **Note 3 – Related Party Transactions** Management believes the allocation methods used are reasonable and appropriate in the circumstances; however, the Company's Statement of Financial Condition and Statement of Operations may not necessarily be indicative of the financial condition and results that would have existed if the Company operated as an unaffiliated entity. **Rule 12b-1 Distribution Plans.** The Company receives payments from Rule 12b-1 distribution plans adopted by certain Funds pursuant to Rule 12b-1 of the Investment Company Act of 1940, as amended. These plans are subject to annual review and approval by the independent trustees of each of the Funds. Under the terms of the distribution plans, each Fund makes monthly payments {12}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** (fees earned pursuant to Rule 12b-1 distribution plans) which will not exceed the lesser of a set percentage of each Fund's average daily net assets on an annual basis or the pro rata share of the Company's costs of distribution incurred on behalf of each Fund. The Company incurred and paid John Hancock Distributors LLC ("Distributors") Rule 12b-1 distribution fees for distributing certain funds on behalf of the Company of \$18,683,234 for the year ended December 31, 2022 and are included in Rule 12b-1 service fees paid in the Statement of Operations. **Service Agreements.** The Company reimburses JHUSA payroll, rent, shared services, and other administrative expenses. These expenses amounted to \$142,988,137 for the year ended December 31, 2022 and are included in other selling, general, and administrative expenses and administrative service expense in the Statement of Operations. **Due from/to Affiliated Companies.** Due from affiliated companies at December 31, 2022 included certain operating expenses paid by the Company on behalf of JHIM. Generally, these are settled monthly. Due to affiliated companies at December 31, 2022 includes 12b-1 fee expenses, broker support expenses, payroll related expenses and other administrative expenses paid on behalf of the Company by Distributors, John Hancock Signature Services, Inc. ("Signature Services"), JHUSA, Manufacturers Life Insurance Company ("MLI") and MFC. Generally, these are settled monthly. **Capital Contributions.** For the year ended December 31, 2022, the Company received cash capital contributions of \$151,600,000 from JHIM. # **Note 4 – Deferred Selling Commissions** The rollforward of deferred selling commissions as of December 31, 2022 is as follows: | Balance, beginning of year | \$
1,112,727 | |----------------------------|-----------------| | Additions | 1,285,693 | | Amortization | (1,863,929) | | Balance, end of year | \$
534,491 | | | | # **Note 5 – Intangible Assets** Intangible assets are as follows: | December 31, 2022 | Gross Carrying
Amount | | Accumulated Net
Amortization | Net Carrying
Amount | | |--------------------------|--------------------------|------------|---------------------------------|------------------------|-----------| | Subject to amortization: | | | | | | | Distribution network | \$ | 16,936,000 | (15,396,335) | \$ | 1,539,665 | | Total | \$ | 16,936,000 | (15,396,335) | \$ | 1,539,665 | {13}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** Amortization expense was \$415,668 for the year ended December 31, 2022. The expense is recorded to other selling, general, and administrative expenses in the Statement of Operations. Amortization expense for other intangible assets is expected to be approximately \$355,812 in 2023, \$293,054 in 2024, \$238,756 in 2025, and \$191,702 in 2026. There were no intangible asset impairments in 2022. #### **Note 6 – Software** Software is comprised of the following as of December 31, 2022: | Software | \$
22,672,631 | |-------------------------------|------------------| | Less accumulated amortization | (22,051,357) | | Software, net | \$
621,274 | Amortization expense for the year ended December 31, 2022 amounted to \$1,967,768 and is included in other selling, general, and administrative expenses in the Statement of Operations. #### **Note 7 – Income Taxes** The Company is included in the consolidated federal income tax return of JHFC. The components of income taxes for year ended December 31, 2022 were as follows: | Current taxes | | |------------------------------------|--------------------| | Federal | \$
(38,632,863) | | State | 12,590 | | Total | (38,620,273) | | Deferred taxes | | | Federal | (100,171) | | Total | (100,171) | | Total income tax expense (benefit) | \$
(38,720,444) | A reconciliation of income taxes at the federal income tax rate to income tax expense (benefit) charged to operations for year ended December 31, 2022 follows: {14}------------------------------------------------ | Tax at 21% | \$
(39,028,860) | |------------------------------------|--------------------| | Add (deduct): | | | Nondeductible expenses, | | | including meals and entertainment | 298,470 | | State and local income taxes | 9,946 | | Prior year true-up | | | Total income tax expense (benefit) | \$
(38,720,444) | #### **NOTES TO FINANCIAL STATEMENTS** Deferred income tax assets and liabilities result from tax effecting the differences between the financial statement values and income tax values of assets and liabilities at the financial condition date. For December 31, 2022, deferred tax assets and liabilities consisted of the following: | Deferred income tax assets: | | |---------------------------------------|-----------------| | Incentive compensation | \$
126,000 | | Total deferred income tax assets | 126,000 | | Deferred income tax liabilities: | | | Deferred selling commissions | \$
(112,243) | | Intangible assets, net | (323,330) | | Other | (108) | | Total deferred income tax liabilities | (435,681) | | Net deferred tax assets (liabilities) | \$
(309,681) | The Company has not recorded a valuation allowance with respect to the realizability of its deferred tax assets. In assessing the need for a valuation allowance, management considered the future reversal of taxable temporary differences, future taxable income exclusive of reversing temporary differences, taxable income in the carry back period, as well as tax planning strategies. Tax planning strategies were considered to the extent they were both prudent and feasible and if implemented, would result in the realization of deferred tax assets. Based on management's assessment of all available information, management believes that it is more likely than not the Company will realize the full benefit of its deferred tax assets. The Inflation Reduction Act (Act) was enacted on August 16, 2022 and included a new corporate alternative minimum tax ("CAMT") that goes into effect for tax years beginning after 2022. The Company has not determined as of the reporting date if it will be subject to the CAMT in 2023. In 2022, the IRS completed their audit of 2016 through 2018 and no adjustments were raised for the Company. Tax year 2019 and 2020 are currently under examination. The Company has no reserves for uncertain tax positions. Any related interest and penalty expense would be recorded in other selling, general and administrative expense in the Statement of Operations. {15}------------------------------------------------ # **JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC NOTES TO FINANCIAL STATEMENTS** # **Note 8 – Net Capital and Regulatory Requirements** As a registered broker dealer, the Company is subject to the SEC's uniform net capital rule ("Rule 15c3-1"). Pursuant to the net capital provisions of Rule 15c3-1 of the Act, the Company is required to maintain minimum net capital, as defined. The amount of net capital and the related net capital ratio may fluctuate on a daily basis. Also according to Rule 15c3-1, the Company is prohibited from withdrawing equity capital if such withdrawal would cause the Company's aggregate indebtedness to net capital to exceed 10 times its net capital; its net capital to fall below 120 percent of its minimum dollar requirement; or net capital to be less than 25 percent of haircuts used in calculating net capital. This limitation includes withdrawals in the form of distributions, as well as unsecured loans or advances to the member, employees, or affiliates. At December 31, 2022, the Company had net capital, as defined, of \$14,265,026. The minimum net capital requirement at December 31, 2022 was \$250,000. The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3, and relies on Footnote 74 of the SEC Release No. 34-70073. # **Note 9 – Commitments and Legal Proceedings** **Commitments.** The Company has entered into operating leases with unrelated parties for office space. Minimum payments required under the leases are as follows: | | | Office Space | |--------------------------|------|--------------| | Year ending December 31, | 2023 | \$23,816 | | | 2024 | 24,351 | | | 2025 | 10,621 | | | | \$
58,788 | **Legal Proceedings.** The Company is involved in certain legal proceedings which arise in the normal course of business. Management believes the outcome of pending litigation will not have a material adverse effect on the Company. The Company is inherently subject to regulatory risk in that a change in laws and regulations could impact aspects of the Company's business. A change in laws or regulations effected by the Securities and Exchange Commission or FINRA may increase operating costs, reduce the attractiveness of certain investments, and/or change the competitive landscape. ## **Note 10 – Subsequent Events** {16}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** The Company evaluated the recognition and disclosure of subsequent events for its December 31, 2022 financial statements through February 24, 2023, the date on which the financial statements were issued. {17}------------------------------------------------ Supplemental Information {18}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** John Hancock Investment Management Distributors LLC Schedule I - Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission December 31, 2022 | Total shareholder's equity (from Statement of Financial Condition)
\$
Allowable credits:
Deferred income taxes, net
Total capital and allowable credits
Nonallowable assets:
Accounts receivable
Deferred selling commissions
Software, net
Due from affiliated companies
Intangible assets, net
Other assets
Total nonallowable assets
Net capital before haircuts on securities positions
Haircuts on securities:
Investment in money market securities
Total haircuts on securities
Net capital
\$
Computation of Alternate Net Capital Requirement
Minimum net capital required (2% of aggregate debit items pursuant to | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------| | | 23,741,247 | | | | | | 309,681 | | | 24,050,928 | | | | | | 1,229,248 | | | 534,491 | | | 621,274 | | | 4,267,574 | | | 1,539,665 | | | 632,556 | | | 8,824,808 | | | 15,226,120 | | | | | | 961,094 | | | 961,094 | | | 14,265,026 | | | | | Rule 15c3-3)
\$ | - | | Minimum dollar net capital requirement | \$
250,000 | |----------------------------------------------------|------------------| | Net capital requirement (greater of above amounts) | \$
250,000 | | Excess net capital over requirement | \$
14,015,026 | *There were no material differences between the computation of net capital under Rule 15c3-1 included in this audited report and the computation included in the Company's corresponding unaudited Form X-17a-5, Part II A filing as of December 31, 2022.* {19}------------------------------------------------ # John Hancock Investment Management Distributors LLC Schedule II – Statement Pursuant to Rule 15c3-3 of the Securities and Exchange Commission December 31, 2022 The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3, and relies on Footnote 74 of the SEC Release No. 34-70073. {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 Tel: +1 617 266 2000 Fax: +1 617 266 5843 ey.com # **Report of Independent Registered Public Accounting Firm** To the Board of Directors and Management of John Hancock Investment Management Distributors LLC We have reviewed management's statements, included in the accompanying exemption report, in which John Hancock Investment Management Distributors LLC (the "Company") stated that: - (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3Ͳ3. - (2) The Company is relying on Footnote 74 of the SEC Release No. 34Ͳ70073 adopting amendments to 17 C.F.R. § 240.17aͲ5 because, the Company limits its business activities exclusively to: (1) distribution of mutual funds and/or variable life insurance or annuities; (2) wholesale distribution and/or underwriting throughout the United States primarily for variable life insurance products, variable annuity products, and registered investment companies (the Funds) sponsored and managed by John Hancock Life Insurance Company (U.S.A) and their affiliated entities, and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3Ͳ3), throughout the most recent fiscal year ended December 31, 2022 without exception. Management is responsible for compliance with 17 C.F.R. § 240.15c3Ͳ3 and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with 17 C.F.R. § 240.15c3Ͳ3. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management'sstatementsreferred to above for them to be fairly stated, in all material respects, pursuant to footnote 74 of SEC Release No. 34Ͳ70073 adopting amendments to 17 C.F.R. § 240.17aͲ5. This report is intended solely for the information and use of the Board of Directors, management, the SEC, the FINRA, other regulatory agencies that rely on Rule 17aͲ5 under the Securities Exchange Act of 1934 in their regulation of registered brokers and dealers, and other recipients specified by Rule 17aͲ5(d)(6) and is not intended to be and should not be used by anyone other than these specified parties. February 24, 2023 {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) **John Hancock Investment Management Distributors LLC's Exemption Report** **John Hancock Investment Management Distributors LLC (the "Company") is a registered brokerͲ dealer subject to Rule 17aͲ5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17aͲ5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17aͲ5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following:** - **(1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3Ͳ3, and** - **(2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34Ͳ70073 adopting amendments to 17 C.F.R. § 240.17aͲ5 because the Company limits its business activities exclusively to:** - **a. distribution of mutual funds and/or variable life insurance or annuities;** - **b. wholesale distribution and/or underwriting throughout the United States primarily for variable life insurance products, variable annuity products, and registered investment companies (the Funds) sponsored and managed by John Hancock Life Insurance Company (U.S.A) and their affiliated entities.** **The company does not hold customer funds and/ or safekeep customer securities or does not carry accounts of or for customers.** **John Hancock Investment Management Distributors LLC** **I, \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ swear (or affirm) that, to my best knowledge and belief, this Exemption** **Report is true and correct.** **By: Jeff Long Title: Chief Financial Officer February 24, 2023** {22}------------------------------------------------ ![](_page_22_Picture_0.jpeg) Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 Tel: +1 617 266 2000 Fax: +1 617 266 5843 ey.com # **Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon Procedures** To the Board of Directors and Management of John Hancock Investment Management Distributors LLC: We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2022. Management of John Hancock Investment Management Distributors LLC (Company) is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: 1. Compared the assessment payments made in accordance with the General Assessment Payment Form (Form SIPC-6) and applied to the General Assessment calculation on Form SIPC-7 with respective cash disbursement record entries in the eTreasury module of the Lawson general ledger application. ## **No findings were found as a result of applying the procedure.** 2. Compared the amounts reported in the audited financial statements required by SEC Rule 17a-5 with the amounts reported in Form SIPC-7 for the fiscal year ended December 31, 2022. ## **No findings were found as a result of applying the procedure.** 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers supporting the adjustments included as part of management's SIPC revenue breakdown worksheet. {23}------------------------------------------------ ![](_page_23_Picture_0.jpeg) Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 Tel: +1 617 266 2000 Fax: +1 617 266 5843 ey.com ## **No findings were found as a result of applying the procedure.** 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the schedules and working papers supporting the adjustments. # **No findings were found as a result of applying the procedure.** We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants and in accordance with the standards of the Public Company Accounting Oversight Board (United States). An agreed-upon procedures engagement involves the practitioner performing specific procedures that the engaging party has agreed to and acknowledged to be appropriate for the purpose of the engagement and reporting on findings based on the procedures performed. We were not engaged to, and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of John Hancock Investment Management Distributors LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties. February 24, 2023 {24}------------------------------------------------ | SIPC-7 | | |----------------|--| | (36-REV 12/18) | | **SIPC-7 SIPC-7** SECURITIES INVESTOR PROTECTION CORPORATION Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001 (36-REV 12/18) (36-REV 12/18) **General Assessment Reconciliation** # 12/31/2022 For the fiscal year ended **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** (Read carefully the instructions in your Working Copy before completing this Form) # **TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS** 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: FINRA 43582 - December 2022 JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC 200 BERKELEY STREET BOSTON, MA 02116 Note: If any of the information shown on the mailing label requires correction, please e-mail any corrections to form@sipc.org and so indicate on the form filed. Name and telephone number of person to contact respecting this form. Jeffrey Long (617)663-4343 | 2. A. | | General Assessment (item 2e from page 2) | | 1,056
\$ | |------------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|---------------| | | B. | Less payment made with SIPC-6 filed (exclude interest)
08/05/2022 | | 170
(
) | | | | Date Paid | | | | | C. | Less prior overpayment applied | | 0
(
) | | | D. | Assessment balance due or (overpayment) | | 886 | | | E. | Interest computed on late payment (see instruction E) for______days at 20% per annum | | 0 | | | F. | Total assessment balance and interest due (or overpayment carried forward) | | 886
\$ | | | G. | r the box
PAYMENT:
✔
Check mailed to P.O. Box T Funds Wired TACH T
Total (must be same as F above) | 886
\$ | | | | H. | Overpayment carried forward | 0
\$(
) | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | JOHN HANCOCK INVESTMENT MANAGEMENT DISTRIBUTORS LLC | | | | | and complete. | (Name of Corporation, Partnership or other organization)
(Name of
Partners | | | | | | (Authorized Signature)
(Authorized Si
Chief Financial Officer | | | | | Dated the
day of
, 20 | (Title) | | | | | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | | | WER | | Dates:
Postmarked
Received
Reviewed | | | | | | Calculations | Documentation | Forward Copy | | SIPC REVIE | | Exceptions: | | | | | | Disposition of exceptions: | | | {25}------------------------------------------------ # **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period beginning and ending 01/01/2022 12/31/2022 121,898,405 **Eliminate cents** \$ #### **Item No.** 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) - 2b. Additions: - (1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and predecessors not included above. - (2) Net loss from principal transactions in securities in trading accounts. - (3) Net loss from principal transactions in commodities in trading accounts. - (4) Interest and dividend expense deducted in determining item 2a. - (5) Net loss from management of or participation in the underwriting or distribution of securities. - (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net profit from management of or participation in underwriting or distribution of securities. - (7) Net loss from securities in investment accounts. Total additions #### 2c. Deductions: (1) Revenues from the distribution of shares of a registered open end investment company or unit investment trust, from the sale of variable annuities, from the business of insurance, from investment advisory services rendered to registered investment companies or insurance company separate accounts, and from transactions in security futures products. (2) Revenues from commodity transactions. - (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with securities transactions. - (4) Reimbursements for postage in connection with proxy solicitation. - (5) Net gain from securities in investment accounts. - (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and (ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less from issuance date. - (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue related to the securities business (revenue defined by Section 16(9)(L) of the Act). - (8) Other revenue not related either directly or indirectly to the securities business. (See Instruction C): (Deductions in excess of \$100,000 require documentation) | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13, | | |------------------------------------------------------------------------------|----| | Code 4075 plus line 2b(4) above) but not in excess | 0 | | of total interest and dividend income. | \$ | (ii) 40% of margin interest earned on customers securities accounts (40% of FOCUS line 5, Code 3960). Enter the greater of line (i) or (ii) Total deductions 2d. SIPC Net Operating Revenues 2e. General Assessment @ .0015 | 0 | | |---|--| | 0 | | | 0 | | | 0 | | | 0 | | | | | | 0 | | | 0 | | | 0 | | | 121,194,643 | |-------------| | 0 | | 0 | | 0 | | 0 | | | | 0 | | 0 | | | | 0 | | | | | | | | | | | | 0 | | | | 121,194,643 | |------------------------| | 703,762
\$ | | 1,056
\$ | | (to page 1, line 2.A.) | \$ 0 {26}------------------------------------------------ # **SIPC-7 Instructions** This form is to be filed by all members of the Securities Investor Protection Corporation whose fiscal years end in 2011 and annually thereafter. The form together with the payment is due no later than 60 days after the end of the fiscal year, or after membership termination. Amounts reported herein must be readily reconcilable with the member's records and the Securities and Exchange Commission Rule 17a-5 report filed. Questions pertaining to this form should be directed to SIPC via e-mail at form@sipc.org or by telephoning 202-371-8300. A . For the pur poses of this form, the term " SIPC Net O perating Revenues" shall mean gross revenues from the securities business as defined in or pursuant to the ap plic able sec tions of the Securities Investor Protec tion Ac t of 1970 ("Ac t ") and Ar ticle 6 of SIPC's bylaws (see page 4), less item 2c(9) on page 2. B. Gross revenues of subsidiaries, except foreign subsidiaries, are required to be included in SIPC Net O perating Revenues on a c onsolidated basis except for a subsidiary filing separately as explained hereinafter. If a subsidiar y was required to file a Rule 17a-5 annual audited statement of inc ome separately and is also a SIPC member, then such subsidiar y must itself file SIPC-7, pay the assessment, and should not be consolidated in your SIPC-7. SIPC Net O perating Revenues of a predecessor member which are not included in item 2a, were not repor ted separately and the SIPC assessments were not paid thereon by such predecessor, shall be included in item 2b(1). C. Your General Assessment should be computed as follows: - (1) *Line 2a* For the ap plic able period enter total revenue based upon amounts repor ted in your Rule 17a-5 Annual Audited Statement of Inc ome prepared in c onformit y with generally accepted accounting principles ap plic able to securities brokers and dealers. or if exempted from that rule, use X-17A-5 (FOCUS Report) Line 12, Code 4030. - (2) *Adjustments* The pur pose of the adjustments on page 2 is to determine SIPC Net Operating Revenues. - (a) *Additions* Lines 2b(1) through 2b(7) assure that assessable inc ome and gain items of SIPC Net O perating Revenues are totaled, unreduc ed by any losses (e.g., if a net loss was incurred for the period from all transac tions in trading ac c ount securities, that net loss does not reduce other assessable revenues). Thus, line 2b(4) would include all shor t dividend and interest payments including those incurred in reverse c onversion ac c ounts, rebates on stoc k loan positions and repo interest which have been net ted in determining line 2(a). - (b) *Deductions* Line 2c(1) through line 2c(9) are either provided for in the statue, as in deduc tion 2c(1), or are allowed to arrive at an as sessment base c onsisting of net operating revenues from the securities business. For example, line 2c(9) allows for a deduc tion of either the total of interest and dividend expense (not to exceed interest and dividend inc ome), as repor ted on FOCUS line 22 /PART IIA line 13 (Code 4075), plus line 2b(4) or 40% of interest earned on customers' securities ac c ounts (40% of FOCUS Line 5 Code 3960). Be cer tain to c omplete both line (i) and (ii), entering the greater of the t wo in the far right c olumn. Dividends paid to shareholders are not c onsidered "Expense" and thus are not to be included in the deduc tion. Likewise, interest and dividends paid to par tners pursuant to the par tnership agreements would also not be deducted. *If the amount repor ted on line 2c (8) aggregates to \$100,000 or greater, suppor ting documentation must accompany the form that identifies these deductions. Examples of suppor t information include; contractual agreements, prospectuses, and limited partnership documentation.* - (i) Determine your SIPC Net O perating Revenues, item 2d, by adding to item 2a, the total of item 2b, and deducting the total of item 2c. - (ii) Multiply SIPC Net O perating Revenues by the ap plic able rate. Enter the resulting amount in item 2e and on line 2A of page 1. - (iii) Enter on line 2B the assessment due as reflec ted on the SIPC-6 previously filed. - (iv) Subtrac t line 2B and 2C from line 2A and enter the dif ference on line 2D. This is the balance due for the period. - (v) Enter interest c omputed on late payment (if applicable) on line 2E. - (vi) Enter the total due on line 2F and the payment of the amount due on line 2G. - (v ii) Enter over payment c arr ie d for ward (if any) on line 2H. D. Any SIPC member which is also a bank (as defined in the Securities Exchange Ac t of 1934) may exclude from SIPC Net O perating Revenues dividends and interest received on securities in its investment ac c ounts to the ex tent that it c an demonstrate to SIPC's satisfac tion that such securities are held, and such dividends and interest are received, solely in c onnec tion with its operations as a bank and not in c onnec tion with its operations as a broker, dealer or member of a national securities exchange. Any member who excludes from SIPC Net O perating Revenues any dividends or interest pursuant to the preceding sentence shall file with this form a sup plementar y statement set ting for th the amount so excluded and proof of its entitlement to such exclusion. E. *Interest on Assessments.* If all or any par t of assessment paya ble under Se c tion 4 of the Ac t has not b een p ostmar ke d within 15 days af ter the due date thereof, the member shall pay, in addition to the amount of the assessment, interest at the rate of 20% per annum on the unpaid por tion of the assessment for each day it has been overdue. F. Se curities and Exchange Commission Rule 17a-5(e) (4) requires those who are not exempted from the audit requirement of the rule and whose gross revenues are in exc ess of \$500,000 to file a sup plemental independent public ac c ountants repor t c overing this SIPC-7 no later than 60 days after their fiscal year ends. **Mail this completed form to SIPC together with a check for the amount due, made payable to SIPC, using the enclosed return PO BOX envelope, pay via ACH Debit Authorization through SIPC's ACH system at www.sipc.org/for-members/assessments or wire the payment to:** **On the wire identify the name of the firm and its SEC Registration 8-# and label it as "for assessment." Please fax a copy of the assessment form to (202)-223-1679 or e-mail a copy to form@sipc.org on the same day as the wire.** {27}------------------------------------------------ # **From Section 16(9) of the Act:** The term "gross revenues from the securities business" means the sum of (but without duplication)— (A) commissions earned in connection with transactions in securities effected for customers as agent (net of commissions paid to other brokers and dealers in connection with such transactions) and markups with respect to purchases or sales of securities as principal; (B) charges for executing or clearing transactions in securities for other brokers and dealers; - (C) the net realized gain, if any, from principal transactions in securities in trading accounts; - (D) the net profit, if any, from the management of or participation in the underwriting or distribution of securities; - (E) interest earned on customers' securities accounts; (F) fees for investment advisory services (except when rendered to one or more registered investment companies or insurance company separate accounts) or account supervision with respect to securities; - (G) fees for the solicitation of proxies with respect to, or tenders or exchanges of, securities; - (H) income from service charges or other surcharges with respect to securities; (I) except as otherwise provided by rule of the Commission, dividends and interest received on securities in investment accounts of the broker or dealer; (J) fees in connection with put, call, and other options transactions in securities; (K) commissions earned for transactions in (i) certificates of deposit, and (ii) Treasury bills, bankers acceptances, or commercial paper which have a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof, the maturity of which is likewise limited, except that SIPC shall by bylaw include in the aggregate of gross revenues only an appropriate percentage of such commissions based on SIPC's loss experience with respect to such instruments over at least the preceding five years; and (L) fees and other income from such other categories of the securities business as SIPC shall provide by bylaw. Such term includes revenues earned by a broker or dealer in connection with a transaction in the portfolio margining account of a customer carried as securities accounts pursuant to a portfolio margining program approved by the Commission. Such term does not include revenues received by a broker or dealer in connection with the distribution of shares of a registered open end investment company or unit investment trust or revenues derived by a broker or dealer from the sales of variable annuities, the business of insurance, or transactions in security futures products. # **From Section 16(14) of the Act:** The term "Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, any collateral trust certificate, preorganization certificate or subscription, transferable share, voting trust certificate, certificate of deposit, certificate of deposit for a security, or any security future as that term is defined in section 78c(a)(55)(A) of this title, any investment contract or certificate of interest or participation in any profit-sharing agreement or in any oil, gas or mineral royalty or lease (if such investment contract or interest is the subject of a registration statement with the Commission pursuant to the provisions of the Securities Act of 1933 [15 U.S.C. 77a et seq.]), any put, call, straddle, option, or privilege on any security, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase or sell any of the foregoing, and any other instrument commonly known as a security. Except as specifically provided above, the term "security" does not include any currency, or any commodity or related contract or futures contract, or any warrant or right to subscribe to or purchase or sell any of the foregoing. #### **From SIPC Bylaw Article 6 (Assessments): Section 1(f):** The term "gross revenues from the securities business" includes the revenues in the definition of gross revenues from the securities business set forth in the applicable sections of the Act. # **Section 3:** For purpose of this article: (a) The term "securities in trading accounts" shall mean securities held for sale in the ordinary course of business and not identified as having been held for investment. (b) The term "securities in investment accounts" shall mean securities that are clearly identified as having been acquired for investment in accordance with provisions of the Internal Revenue Code applicable to dealers in securities. (c) The term "fees and other income from such other categories of the securities business" shall mean all revenue related either directly or indirectly to the securities business except revenue included in Section 16(9)(A)-(L) and revenue specifically excepted in Section 4(c)(3)(C)[Item 2c(1), page 2]. Note: If the amount of assessment entered on line 2e of SIPC-7 is greater than 1/2 of 1% of "gross revenues from the securities business" as defined above, you may submit that calculation along with the SIPC-7 form to SIPC and pay the smaller amount, subject to review by your Examining Authority and by SIPC. SIPC Examining Authorities: | ASE | American Stock Exchange, LLC | |------|----------------------------------------------| | CBOE | Chicago Board Options Exchange, Incorporated | CHX Chicago Stock Exchange, Incorporated - FINRA Financial Industry Regulatory Authority NYSE Arca, Inc. NASDAQ OMX PHLX SIPC Securities Investor Protection Corporation - **4** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.