# JANUS DISTRIBUTORS LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: JANUS DISTRIBUTORS LLC - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0000875115-21-000003 - CIK: 875115 - File #: 8-43810 - Material weakness: No - Auditor: PricewaterhouseCoopers LLP - Auditor location: Denver, CO - Contact: Patricia Schneider - Phone: 303-336-4217 - Signed by: Brennan A. Hughes (Senior Vice President & Chief Accounting Officer) Original filing: https://www.sec.gov/Archives/edgar/data/875115/000087511521000003/JDStmtofFinancialCond2020Pub.pdf --- {0}------------------------------------------------ JANUS DISTRIBUTORS LLC (SEC I.D. No. 8-43810) (A Wholly-Owned Subsidiary of Janus Capital Management LLC) # STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2020 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM \* \* \* \* \* \* \* Filed pursuant to Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT. {1}------------------------------------------------ ![](_page_1_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Managing Member of Janus Distributors LLC ## *Opinion on the Financial Statement – Statement of Financial Condition* We have audited the accompanying statement of financial condition of Janus Distributors LLC (the "Company") as of December 31, 2020, including 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 Company as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. # *Basis for Opinion* The 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 of this financial statement in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. Denver, Colorado February 26, 2021 We have served as the Company's auditor since 2017. {2}------------------------------------------------ # JANUS DISTRIBUTORS LLC # STATEMENT OF FINANCIAL CONDITION (in thousands) | | December 31,
2020 | | | | |------------------------------------------------|----------------------|--------|--|--| | ASSIBILIS | | | | | | Current assets: | | | | | | Cash and cash equivalents | ਉ | 13,036 | | | | Accounts receivable | | 8,464 | | | | Deferred commissions | | 4,191 | | | | Prepaid expenses | | 418 | | | | Total current assets | | 26,109 | | | | Total assets | સ્ત્ર | 26,109 | | | | LIABILITIES AND MEMBER'S CAPITAL | | | | | | Liabilities: | | | | | | Accounts payable and other accrued liabilities | ਦਿੱਤੇ | 7,333 | | | | Member's capital: | ਦਿੱਤੇ | 18,776 | | | | Total liabilities and member's capital | ಕ್ಕಿ | 26,109 | | | See accompanying notes to Statement of Financial Condition. {3}------------------------------------------------ # JANUS DISTRIBUTORS LLC # NOTES TO STATEMENT OF FINANCIAL CONDITION #### DESCRIPTION OF BUSINESS 1. Janus Distributors LLC (the "Company") is a wholly-owned subsidiary of Janus Capital Management LLC ("JCM"), whose ultimate parent is Janus Henderson Group plc ("JHG" or "the Group"). The Company is a limited purpose broker-dealer registered with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority, Inc. The Company is the sale and distribution of shares of certain investment companies (hereafter referred to as "mutual funds") which are directly advised or serviced by JCM and its consolidated subsidiaries. The Company also provides advice and marketing services to issuers of exchange-traded notes ("ETNs") and facilitates the distribution of certain commingled funds. JHG incurs expenses on behalf of the Company which are allocated to the Company using an expense allocation methodology. Therefore, the Statement of Financial Condition presented could be materially different if the Company were a stand-alone entity. # 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Accounting Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Statement of Financial Condition. Actual results could differ from those estimates and the differences could be material. All amounts disclosed within the Notes to Statement of Financial Condition are presented in thousands. Cash Equivalents - The Company considers short-term liquid investments with an initial maturity date of three months or less when purchased, including investments in money market funds, to be cash equivalents. Deferred Commissions - Deferred commissions are commissions paid to financial intermediaries on sales of Janus Investment Fund Class C shares and certain sales of Class A shares. Contingent deferred sales charges received by the Company from the redemption of Class A shares and Class C shares within one year of purchase reduce the unamortized deferred commissions. Deferred commissions on outstanding shares are amortized over one year or when the shares are redeemed, if earlier. Management periodically tests the deferred sales commission asset for impairment by reviewing changes in value of the related shares, the relevant market conditions and other events and circumstances that may indicate the carrying amount of the asset may not be recoverable. To test for recoverability, management compares the carrying value to the estimated undiscounted cash flows expected to be generated by the asset over its remaining life. If the carrying value exceeds fair value. the asset will be deemed impaired and a loss will be recorded in the amount by which the carrying {4}------------------------------------------------ YDOXH RI WKH DVVHW H[FHHGV LWV IDLU YDOXH )RU WKH \HDU HQGHG 'HFHPEHU QR LPSDLUPHQW FKDUJHVZHUHUHFRUGHG *Income Taxes* ± 1R SURYLVLRQ IRU LQFRPH WD[HV KDV EHHQ LQFOXGHG LQ WKH 6WDWHPHQW RI )LQDQFLDO &RQGLWLRQ 7KH &RPSDQ\ LV D VLQJOH PHPEHU OLPLWHG OLDELOLW\ FRPSDQ\ DQG LV WUHDWHG DV D GLVUHJDUGHGHQWLW\RI -+\* IRU IHGHUDODQG VWDWHLQFRPHWD[ SXUSRVHV\$Q\LQFRPHWD[OLDELOLWLHV RU DVVHWV WKDW UHVXOW IURP WKH RSHUDWLRQV RI WKH &RPSDQ\ DUH UHIOHFWHG LQ WKH ILQDQFLDO VWDWHPHQWV RI -+\*7KHUHLVQRIRUPDOWD[VKDULQJDUUDQJHPHQWWKDWH[LVWVZLWK-&0RU-+\* *Subsequent Events*±(YHQWVVXEVHTXHQWWRWKHEDODQFHVKHHWGDWHKDYHEHHQHYDOXDWHGIRULQFOXVLRQ LQWKHDFFRPSDQ\LQJ6WDWHPHQWRI)LQDQFLDO&RQGLWLRQWKURXJKWKHLVVXDQFHGDWH ### **5(/\$7('3\$57,(6\$1'27+(50\$77(56** &HUWDLQRIILFHUVRIWKH&RPSDQ\DUHDOVRRIILFHUVRI-&0LWVVXEVLGLDULHVDQGRIWKHPXWXDOIXQGV GLVWULEXWHGE\WKH&RPSDQ\ \$FFRXQWVUHFHLYDEOHUHSUHVHQWVDPRXQWVRZHGWRWKH&RPSDQ\E\WKHPXWXDOIXQGVIRUGLVWULEXWLRQ IHHVDQGE\WKH(71LVVXHUVIRUPDUNHWLQJIHHV\$GGLWLRQDOO\DFFRXQWVUHFHLYDEOHLQFOXGHVRI LQWHUFRPSDQ\QHWUHFHLYDEOHVXQGHUWKHLQWHUFRPSDQ\VHUYLFHVDJUHHPHQWZLWK-&0 'XULQJWKH\HDUHQGHG'HFHPEHUWKH&RPSDQ\GLVWULEXWHGLQFDVKWR-&0DVD FDSLWDOGLVWULEXWLRQ -&0KDVDJUHHGWRPDNHFDSLWDOFRQWULEXWLRQVWRWKH&RPSDQ\WRWKHH[WHQWUHTXLUHGWRPDLQWDLQQHW FDSLWDO6HH1RWH±1HW&DSLWDO5HTXLUHPHQW ### **1(7&\$3,7\$/5(48,5(0(17** \$VDEURNHUDQGGHDOHUUHJLVWHUHGZLWKWKH6(&WKH&RPSDQ\LVUHTXLUHGWRPDLQWDLQPLQLPXPQHW FDSLWDODVGHILQHGLQ5XOHFRIWKH6HFXULWLHV([FKDQJH\$FWRIHTXLYDOHQWWRRI DJJUHJDWH LQGHEWHGQHVV DV GHILQHG RU ZKLFKHYHU LV JUHDWHU \$W 'HFHPEHU WKH &RPSDQ\KDGQHWFDSLWDORIZKLFKH[FHHGVWKHUHTXLUHGDPRXQWE\7KH&RPSDQ\¶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{5}------------------------------------------------ ### 6. GUARANTEES, COMMITMENTS AND CONTINGENCIES The Company may enter into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to the indemnification clauses of these contracts and expects the risk of loss from such causes to be remote. The Company or Group is periodically involved in various legal proceedings and other regulatory matters. See Note 8 - Litigation and Other Regulatory Matters for further discussion of legal proceedings and other regulatory matters. #### FINANCIAL INSTRUMENTS 7 Accounting standards establish a framework for measuring fair value by creating a hierarchy for observable independent market inputs and unobservable market assumptions and expands disclosures about fair value measurements. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The valuation hierarchy contains three levels: - · Level 1 Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. - o Level 2 Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured. - o Level 3 Valuation inputs are unobservable and significant to the fair value measurement. The following is a summary of the Company's financial assets as of December 31, 2020, that are accounted for at fair value on a recurring basis by level in accordance with the fair value hierarchy (in thousands): | | Levell | | Level 2 | | Level 3 | | Total | | |----------------------------|--------|--------|---------|--|---------|--|-------|--------| | ASSIDITS | | | | | | | | | | Cash and cash equivalents: | | | | | | | | | | Money market funds | | 11,843 | | | | | | 11,843 | | Total assets | | 11.843 | | | | | | 11,843 | There are no financial assets or liabilities that are accounted for at fair value on a nonrecurring basis as of December 31, 2020. ### 8. LITIGATION AND OTHER REGULATORY MATTERS Eisenberg v. Credit Suisse AG and Janus Indices and Qiu v. Credit Suisse AG and Janus Indices On March 15, 2018, a class action lawsuit was filed in the U.S. District Court for the Southern District of New York ("SDNY") against a subsidiary of JHG, Janus Index & Calculation Services LLC, which, effective January 1, 2019, was renamed Janus Henderson Indices LLC ("Janus {6}------------------------------------------------ Indices"), on behalf of a class consisting of investors who purchased VelocityShares Daily Inverse VIX Short-Term ETN (Ticker: XIV) between January 29, 2018, and February 5, 2018 (Eisenberg v. Credit Suisse AG and Janus Indices). Credit Suisse AG ("Credit Suisse"), the issuer of the XIV notes, is also named as a defendant in the lawsuit. The plaintiffs generally allege statements by Credit Suisse and Janus Indices, including those in the registration statement, were materially false and misleading based on its discussion of how the intraday indicative value ("IIV") is calculated and that the IIV was not an accurate gauge of the economic value of the notes. On May 4, 2018, an additional class action lawsuit was filed on behalf of investors who purchased XIV between January 29, 2018, and February 5, 2018 against Janus Indices and Credit Suisse in the SDNY (Oiu v. Credit Suisse AG and Janus Indices). The Oiu allegations generally copy the allegations in the Eisenberg case. On August 20, 2018, an amended complaint was filed in the Eisenberg and Qiu cases (which have been consolidated in the SDNY under the name Set Capital LLC, et al. v. Credit Suisse AG, et al.), adding Janus Distributors LLC, doing business as Janus Henderson Distributors, and JHG as parties, and adding allegations of market manipulation by all of the defendants. The JHG and Credit Suisse defendants moved to dismiss the Set Capital amended complaint, and on September 25, 2019, the court dismissed all claims against all defendants. The court denied the plaintiffs' request for an opportunity to further amend their complaint, and therefore dismissed the case in its entirety. Plaintiffs have filed an appeal in the U.S. Court of Appeals for the Second Circuit. We believe the remaining claims in these ETN lawsuits are without merit and we are vigorously defending the actions. As of December 31, 2020, we cannot reasonably estimate possible losses from the remaining claims in the ETN lawsuits. \*\*\*\*\*\*\*\* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.