# SUSQUEHANNA FINANCIAL GROUP, LLLP X-17A-5 (2022-03-01) — Broker-dealer annual report - Company: SUSQUEHANNA FINANCIAL GROUP, LLLP - Form: X-17A-5 - Filed: 2022-03-01 - Period: 2021-12-31 - Accession: 0000881182-22-000001 - CIK: 881182 - File #: 8-44325 - Type: Broker-dealer - Material weakness: No - Auditor: EISNERAMPER,LLP - Auditor location: NEW YORK, NY - Contact: Robert C 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/881182/000088118222000001/sfgsfc1.pdf --- {0}------------------------------------------------ **UNITED** STATES **SECURITIES AND EXCHANGE** COMMISSION Washington, **D.C.** 20549 > **ANNUAL REPORTS FORM X-17A-5 PART Ill** **0MB APPROVAl OMBNumber: 32l5·0l23 Expires: Ott. 31, 2023 Estimated average burden hours per response: 12** **SE<: file NUMBER** s-44325 **MM/DD/YY** **FACING** PAGE **Information Required Pursuant to Rules 17a-s, 17a•12, and 18a-7 under the Securities E1Cchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_\_ **Ol/ /O "R/J.** *io* AND ENID ING 12/31/202 l **MM/00/'YY** **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: \_\_ s\_s\_a\_l tAN\_&\_A\_ FI\_\_ \_NAN \_L'O. \_\_ IO\_B.\_LLL\_P \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ TYPE OF REGISTRANT (check all applicable boxes): lSi Broker-dealer D Security-based swap dealer D Major security-based swap participant **::J Check here if respondent is also an OTC derivatives dealer** ADDIUS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 401 CITY AVENUE, SUITE 220 | | (No. and Street) | | | | |---------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|------------|--| | BALA CYNWYD | PA | | 19004 | | | (Citv) | (State) | | (Zip Code) | | | PERSON TO CONTACTWITl-l REGARD TO THIS FILING | | | | | | ROBERT SACK | 610-617-2812 | ROB.SACK@SIG.COM | | | | (Name) | (Area Code - Telephone Number) | ( Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | EISNERAMPER, LLP | (Name - if individual state last, first, and middle name) | | | | | 733 THIRD AVENUE | NEW YORK | NY | 10017 | | | {Address) | (City) | (State) | (Zip Code) | | | 09/29/2003 | 274 | | | | | (Oate of Re.llstration with PCA081{if applicable) | | (PCAOB Registration Number, 1f applicable) | | | | | FOR OFFICIAL. USE ONLY | | | | | | | | | | | | • Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public | | | | **accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(1){ii), if applicable.** **Persons who are to re5pond to t�e collection of information contained in this form are not require(! to respond unless the- form di-splays 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 SUSQUEHANNA FINA.NCIALGROUP, lllP as of DECEMBER 31 \_\_, 2� is true and correct. I further swear {or affirm) that neither the company nor any partner officer directoc oc eQ11ivaleot persoco as the case may be, has any proprietary interest in any account classified solely CommoowealUl *cl* Pennsy111'ania • Notary Seal Chr-stina Weir;iand. Notary Pubic Montgome1y County My Commission Elq)ires November 8. 2025 Conrnission Nt.rnb&< 1409542 SignaturL�- Title: TREASURER a ### This filing•• contains (ch-eek all applicable boxes): - **r5J'** (a) Statement of financial condition. - *'Ji* (b) Notes to consolidated statement of financial condition. - D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, *a* statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - D (d) Statement of cash flows. - D (e) Statement of chan8es in stockholders' or partners' or sole proprietor's equity. - D (fl Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to consolidated financial statements. - D {h) Computation of net capital vnder 17 CFR 240.1Sc3-l or 17 CFR 240.18a-1. as applicable. - D {i) Computation of tangible net worth under 17 CFR 240.18a-2. - D {j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CfR 240.1Sc3-3-. - D {k) Computation for determination of security-based swap reserve requirements pursuant to lxhibit 8 to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D {I) Computation for Determination of PAB IRequirements 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 pos:ession *or* control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(p){2) or 17 CFR 240.lSa-4, as applicable. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computatiotl of net capital *or* tangible net worth under 17 CFR 240.15c3-l, 17 CFR 240.lSa-1, or 17 CFR 240.lSa-2, as applicable, and the reserve requirements under 17 CfR 240.1Sc3-3 or 17 CFR 240.18a-4, as al)plicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiariies not consolidated in the statement of financial condition. - � (q) Oath or affirmation in accordance with 17 CFR 240.17a-S, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7. as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable. - Ft (ti Independent public accountant's report based on an examination of the statement of finallcial condition, - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report. based on an examination of certain statements in the compliance report under 17 CFR 240.l?a-5 or 17 CFR 240.18a-7, as applicable. - D (w) Independent public accountant's report based on *a* review of the exemption report under 17 CFR 240.17a-S or 17 CFR 240.lBa-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedure.s, in accordance with 17 CFR 240.1Sc3-le or 17 CFR 240.l 7a-l2, as a,pplicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.l 7a-12(k). - 0 (t) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - *.. TQ req<1esr ,Qr,fi(Jertiaf treQCme11t of certoi11 portions of this filing, see 17 CFR 240.lla·S(e)(3J Qr l 7 CfR Z40, l8a·l(ti)(Z), cis opplicob/e.* {2}------------------------------------------------ **(a limited liability limited partnership)** **STATEMENT OF FI "ANCIAL CONDITION** **DECEMBER 31, 2021** {3}------------------------------------------------ # **EISNERAMPER** **El5nerAmper LLP 7l3 1hird Aven\Je New York, NY 10017 T 212.949 .11700 F 212.891.4100 www.eisneramper.com** ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Partners of Susquehanna Financial Group, LLLP #### *Opinion on the Ffoancial Statement* We have audited the accompanying statement of financial condition of Susquehanna Financial Group, LLLP (the "Entity") as of December 31, W21 and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in a.II material respects, lhe financial position of the Entity as of December 31, 2021, In conformity with accounting principle·s generally accepted in the United States of America. # *Basis* for *Opinion* This financial statement is the responsibWty of the Entity's management. Our reaponsibility is to express an opinion on the Entity's financial statement based on our audit. We are a public accounting f rm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent wnh respect to the Entity in accordance wittl the U.S. federal securities laws and the applicable rules and regulations oflhe 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 'D obtain reasonable assurance about whether the frnancial 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 prov�es a reasonab e basis for our opinion. .. We have served as the Entity's auditor since 201 O E ISNERAMPER LLP New York, New Yor1< February 26, 2022 ![](_page_3_Picture_12.jpeg) **'EisnerAmper· is the branc; name inter which Eisne,Ampcr LLF and Eisner Advisoy Group LLC provide- prcfessional seivic.es . EisnerAmper LLP and Eisner Ad,.;sory Group LLC are inoepenoef'.tiy owned firms that P'aaice i1' Wl a�emative practice stn.ctl.r'e ·n accordance wilt, the AICPA Code ol Professional Conduct and apPlicable law, reguatiO(ls and professional standards. EisnerAl11per ll P I) a u,enied i;;PA firm that pi�iees attest �ice5. and Eisriei Adv'1S01y Group LLC en! its sJcs diaiy rnliti�� provide lllx arg business consu"ting services. Eisner** */>6\$ | | Cash segregated under federal and other regulations | 1,500 | | Receivable from clearing brokers | 1,061,741 | | Securities owned - at fair valiJe | 288,632 | | Securities borrowed | 1,238,740 | | Accrued trading receivables | 6,042 | | Ree.eivable from affiliates | 765 | | Commission receivables | 5,282 | | Fixed assets (net of accumulated depreciation of \$2,150} | 1,347 | | Right-of-use asset (net of accumulated amortization of \$209) | 405 | | Other assets | 62 | | Total assets | s 2,604,522 | | Liabilities and partners' capital | | | Securities sold, not yet purchased - at fair value | 2
\$ | | Securities sold under agreements to repurchase | 823,127 | | Securities loaned | 1,194,332 | | Accrued trading payables | 4,835 | | Payable to affiliates | 21,369 | | Accrued oompensation | 21,606 | | Guaranteed payments to partners | 3,084 | | Lease liability | 436 | | Accrued expenses and other liabilities | 1,392 | | Total liabilities | 2,070,183 | | Partners' capital | 534,339 | | Total liabilities and partners' capital | \$ 21
604,522 | {5}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in tl"ousands)** # **NOTE A - ORGANIZATION** **Susquehanna Financial Group, LLLP (the "Entity") is a registered broker-dealer with the Securities and Exchange Commission (the "SEC"). The Entity's designated examining regulatory autl"ority is the Financial Industry Regulatory Autl"ority, Inc. The Entity generally acts as an introducing broker and trades for its own account as a market-maker on the principal United States securities ex-changes. The Entity is owned 99.9% by SFG Holding, LLC and 0.1% by SFG Partner, LLC.** # **NOTE B - SIGNIFICANIT ACCOUNTING POLICIES** **The Entity records purchases and sales of securities and related revenues and expenses on a trade-date basis.** **Interest income and expense are recorded on the accrual basis.** **Dividend income and dividends on securities sold, not yet purchased, are recorded on the ex-dividend date.** • • **The Entity maintains cash in a deposit account which, at times, may exceed federally insured limits.** **Depreciation of fixed assets is computed using the double-declining balance method over the estimated useful life of the assets.** **Repurchase and resale agreements are accounted for as collateralized financing transactions and are carried at the amounts at which the securities will be reacquired or resold as specified in the respective agreements. plus accrued interest. The Entity continually monitors the fair value of the underlying securities as compared with the related receivable and payable, induding accrued interest, and requests or pays additional collateral where deemed appropriate.** **Assets and liabilities denominated in foreign currencies are translated into United States dollar amounts at the period-end exchange rates. Purchases and sales of financial instruments that are denominated in foreign currencies are translated into United States dollar amounts at the prevailing rate& of exchange on the transac.tion date.** **Revenue from contracts with customers consists of commission income earned from customers u,der current agreements and order execution services provided to affiliates. Each time ttle Enlity acts as an introducing broker of a trade for a customer or executes an order, it has fulfilled all performance obligations, and therefore, recognizes and records the revenue associated with commission income or order execution on a trade date basis.** **In accordance with Accounting Standards Codification ("ASC") Topic 326. Financial Instruments-Credit Losses ("ASC 326"), 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 fiinancial asset, as of the reporting date based on relevant information about past events. current conditions, and reasonable and supportable forecasts.** **Receivable from dearing 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 dearing brokers and clearing organizations. Certain trades and contracts are cleared through a centralized clearing organization and settled daily between the clearing organization and the Entity's prime broker, therefore limiting the amount of unsettled credit etposure. Tl'le Entity monitors the capital adequacy of such organizations\_** I ' •• , {6}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** #### **NOTE B - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** **For securities purchased under agreements to resell, the Entity elects to use the practical expedient when eligible. The Entity determines if it is eligible for the col.lateral maintena nee provision practical expedient and considers the credit quality of these assets and the related need for an allowance for credit tosses based on several factors. including: 1) the daily revaluation of the underlying collateral used to secure the borrowings and collateral. 2) the counterparty's continuing ability to meet additional collateral requests based on decreases in the market value of the collateral, and 3) its right to sell the securities colla1eralizng the borrowings. if additional collateral requests are not met by the customer or the amounts borrowed are not returned on demand. The Entity reasonably expects the counterparty to continue to replenish the collateral as necessary to meet the requirements of the contract. The practical expedient permits the Entity to consider that the expectation for nonpayment of the amortized cost basis is zero.** **For securities borrowed, the Entity applies a practical expedient to measure the allowance for credit losses based on the fair value of the collateral. If the fair value of the collateral held exceeds the amortized cost and the borrower is expected to continue to replenish the collateral as needed, the Entity wat not recognize an allowance. If the fair value of collateral is less than amortized cost and the borrower fails to replenish the collateral as agreed upon in the Master Stock Loan Agreement, the Entity would dose out the contract in a time frame that is consistent with the Entity's credt risk procedures. If. after a reasonable amount ci time, the Entity does not dose out the contract and the collateral remains deficient, the Entity will recognize an allowance for credit losses based cri the Entity's CECL methodology.** **For commission receivables, the allowance for credit losses is based on the Entity's expectation of the collectabilily of commission receivables utilizing the CECL framework. The Entity considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Entity's expectation of the collectability in determining the allowance for credit losses. If, upon evaluation of any aged commission receivable, the Entity believes 11here is expected risk associated with an overdue commission amount, the Entity will establish an allowance for credit loss based on the CECL methodology.** **This statement of financial condition has been prepared in conformity with accounting principles generally accepted in the United States of America, which require the use of estimates by management.** #### **NOTE C -CASH SEGREGATED UNDER FEDERAL AND OTHER REGULATIONS** **Cash of \$1,500 has been segregated in a special reserve bank account for the benefit of customers in accordance with the Entity's exemption under Section k(2)(i) of Rule 15c3-3.** #### **NOTE D· FAIR VALUE OF FINANCIAL INSTRUMENTS** **The E�tity measures its financial instruments in accordance with the Financial Accounting Standards Board Accounting Standards Codifiication 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 nerarchy 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 r, an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the lighest ptiority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (level 3).** {7}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE ID - FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)** **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 liabilitl es 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 n an active market. quoted prices for identical or similar assets or liabilities 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 signifiicant to the fair value measurement and unobservable (supper led by little or no market activity).** **As required by the Codifiication Section for Fair Value Measurements, financial instruments are classified within the level of the lowest signifi1cant 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 tables that follow set forth information about the level within the fair value hierarchy at which the Entity's fiinancial instruments are measured at December 31, 2021:** **Assets measured at fair value:** | Description | | Totals | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | | Significant Other
Observable Inputs
(Level 2) | | | |-------------------------------------|----|---------|-------------------------------------------------------------------------|------------------------|-----------------------------------------------------|-------------------|--| | Options· | | | | | | | | | Arbitrage | \$ | 288,632 | \$ | | | 288,632 | | | liabilities measured at fair value: | | | | | | | | | | | | Quoted Prices in | | | Significant Other | | | | | | | Active Markets for | | Observable | | | | | | | Identical Lialbilities | | Inputs | | | Description | | Totals | (Level 1) | | (Level 2) | | | | Equities: | | | | | | | | | Market Maker | \$ | 2 | \$ | | 2 \$ | | | **Equity securities sold, not yet purchased, that are traded on a national seciurities exchange are valued at the last reported sales price on the last business day of the year. Options listed on a single exchange are valued at the mean between the last bid and the last ask prices on the last business day of the year. Options listed on multiple exchanges are priced using the Nabional Best Bid Offer average, defiined as the average of the lowest offer and highest bid on the last business day of the year. Over-the-counter options are valued at approximately the same prices as equivalent listed options.** {8}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE E -OFFSETTING ASSETS AND LIABILITIES** **In connection with its securib es purchased under agreements to resell and securities sold under agreements to repurchase. the Entity generally enters into netting agreements and collateral agreements with its counterparties. These agreements provide the Entity with the right, in the event of a defaut by the counterparty (such as bankruptcy or a failure to pay or perform), to net a counterparty·s rig,ts and obligations under the agreement and to liquidate and set off collateral against any net amount owed by the counterparty. The enforceability of the netting agreements is taken into accm.nt in the Entity's risk management practices and application of counterparty credit limits. The following tables present information about the offsetting of derivative instruments and related collateral amounts:** | Description | Gross
Amounts of
Recognized
Assets | | Gross Amounts
Offset in the
Statement of
Financial Condition | | Net Amounts of
Assets Presented
in the Statement
of Financial
Condition | | | |-------------------------------------------------------|---------------------------------------------|--------------------------------------------------|-----------------------------------------------------------------------|--|------------------------------------------------------------------------------------------|--|--| | Securities purchased
under agreements to
resell | \$ | 299,815 \$ | (299,815) \$ | | | | | | Description | | Gross
Amounts of
Recognized
Liabilities | Gross Amounts
Offset in the
Statement of
Financial Condition | | Ne1 Amounts of
Liabilities Presented
in the Statement
of Financial
Condition | | | | Securities sold under
agreements to
repurchase | \$ | 1, 122,942 | \$
(299,615) \$ | | 823,127 | | | **The fi1nancial instruments purc�ased or sold in resale and repurchase agreements consist of U.S. government obligations. The resale and repurchase agreements have either no stated maturity or are overnight obligations and are presented under securities sold under agreements to repurchase on the statement of financial condition.** ### **NOTE F - SECURITIES OWNEO AND SECURITIES SOLD, NOT YET PURCHASED** **Securities owned and securities sold, not** *yet* **purchased, are summarized as follows:** | | Securities
Owned | | Securities
Sold, Not Yet
Purchased | | | |------------------------------|---------------------|------------|------------------------------------------|---|--| | Equity securities
Options | \$ | 288,632 | \$ | 2 | | | | \$ | 288.632 \$ | | 2 | | {9}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE G -SECURITIES BORROWED AND SECURITIES LOANED** **Securitfes borrowed and securities loaned are recorded as collateralized financing based upon tte amount of cash collateral advanced or received. Securities borrowed transactions require tte Entity to deposit cash with the lender. With respect to securities loaned, tile Entity receives collateral in the form of cash** **The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of market value of the applicable securities borrowed or loaned. The Entity monitors the market value of securities borrowed and loaned, with additional collateral obtained, or excess collateral refunded, when deemed appropriate.** **Credit risk represents the potential loss that would occur if colX'lterparlies :related to repurchase agreements and security lending transactions fail lo perform pursuant to the terms of their obligations. In addition to its financial instruments and related transacUions, the Entity is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations.** # **NOTE H - RECEIVABLE FROM CLEARING BROKERS AND CONCENTRATION OF CREDIT RISK** **The clean ng and depository operations for the Entity's securities transactions are priimarily provided by Merrill Lynch Professional Clearing Corp., Cowen, and Company LLC., and BofA Securities, Inc.** **At December 31, 2021, all of the securities sold, not yet purchased, and the amounts receivable from clearing brokers reflected on the statement of financial condition are securities positions with and amounts due from these clearing brokers. To the extent that there are securities at these clearing brokers. the securities serve as collateral for the amounts payable to such clearing brokers. The clearing brokers have lhe right to sell** *or* **rep!edge this oollateral, subject to the clearing agreements with the Entity.** **The Entity has agreed to indemnify Merrill Lynch Professional Clearing Corp. for losses that tt may sustain from the customer accounts introduced by the Entity. As of December 31, 2021. there were no unsecured amounts owed to the clearing broker by these customers.** #### **NOTE I • RELATED PARTY TRANSACTIONS** **The Entity is affiliated through common ownership wittl Susquehanna International Group, LLP ("SIG"), Susquehanna Technology Management, Inc. ("S1MI"), Susquehanna Israel Tecmologies Ltd. ("SITL TD"), Susquehanna Singapore Pte. Ltd. ("SSPTE"), Susquehanna Hong Kong Limited ("SHKL"), Susquehanna Business Development, lnc.("SBD"), and Susquehanna Securities, LLC ("SS").** **SIG acts as a common paymen: 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 \$5,042 related to these direct and indirect operating costs.** **SIG also provides infrastructure support services to the Entity and various affiliates. The Entity pays a monthly fee for these services based on allocations determined at SIG's discretion. ln<:luded in payable to affiliates is \$174 related to these services.** **The Entity provides infrastructure support services to various affiliates. These affilates pay a monthly fee for these services based on allocations determined at the Entity's discretion. Included in receivable from and payable to affiliates is a net receivable of \$33 related to these services.** {10}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE I - RELATED PARTY TRANSACTIONS (CONTINUED)** **STMI and SITLTD provide administrative and technology services to the Entity and various affiliates. The Entity pays a monthly management fee for these services based on allocations de1ermined at STMI and SITI. TD's discretion. Included in payable to affiliates are \$234 and \$1, respectively, related to these services.** .. **SSPTE and SHKL provide services related to the introducing brokerage business for tr.e EnUty. The Entity pays a monthly fee for these services. Included in payable to affiliates are \$180 and \$90, respectively, relateo to these services.** .. **SBD performs marketing services for the EnHy and various affiliates. Included in payable to affiliates is \$2,951 related to these services.** **The Entity executes trades for various affiliates for which it receives commissions at various rates. Included in receivable from affiliates is \$90 related to these commissions.** **The Entity also executes trades for affiliated broker-dealers for which it receives a fee based on monthly trading and execution charges, plus a surcharge to cover other costs. Included in receivable from affiliates is \$7 related to these fees.** **The Entity pays affiliated broker-dealers a fee based on their monthly trading and execution charges, plus a surcharge to cover other costs and, for certain affiliates, pays a monthly fixed fee. Included in payable to affiliates is \$3,393 related to these fees.** • I **The En-.tity has a sublicensing agreement with SIG. The agreement allows �he Entity to utilize intellectual property and research and development, licensed by SIG from Wide Wing Financing LLC {"Wide Wing"), an entity affiliated tlYough 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 an annual sublicensing fee equal to a percentage of the Entity's net trading profiits. if any, as defined in the sublicensing agreement. Included in payable to affiliates are sublicensing fees to SIG amounting to \$9,313.** .. .. **The Entity has a master securities loan agreement with SS pursuant to which the Entity borrows and loans securities against transfers of collateral. Included in securities borrowed is collateral of \$473,323, and included in securities loaned is collateral of \$714.048, related to ths agreement. Loan fees are accrued on gross collateral receivables and payables. Included in accrued trading receivables and accrued trading payables are \$2,522 and \$1,061, respectively, related to these fees.** **Guaranteed payments are determined based on a certain class of partners' contributed capital.** **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 contra. 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.** {11}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE J - LEASES** **The Entity recognizes right-of-use assets and corresponding lease liabilities relating to its office leases. Each lease payment reduces the balance c:A the lease liabilities with a portion being allocated to interest expense to produce a constant periodic rate of interest, which is equivalent to the Entity's incremental borrowing rate. on the remaining balance of the lease liabilities for each period. Lease expense is recognized on a straight-line basis over the life of the lease.** **The following is a schedule of future minimum payments required under the lease liabilities expiring February, 2024 together with the present value as of December 31, 2021:** | Year Ending December 31, | | |------------------------------------------|-----------| | 2022 | \$
206 | | 2023 | 210 | | 2024 | 23 | | Total payments due under lease liability | 439 | | Less discount to present value | (3) | | Total lease liability | \$
436 | **The table below presents additional information related to the Entity's office lease as of December 31, 2021:** | Discount rate: | 0.48 % | | |-----------------------|--------|------------| | Remaining lease term: | | 2.17 years | # **NOTE K · FINANCIAL INSTRUMENTS AND RISK** **In the normal course of its business, the Entity trades various financial instruments and enters into various financial transactions where the risk of potential loss due to market risk, interest rate risk, currency risk, credit risk, liquidity risk and other risks could exceed the related amounts recorded. In general. the Entity hedges its positions to mitigate these risks based on certain models. These models take into consideration the types of risks mentioned above in an attempt to Identity arbitrage opportunities associated with various types of financial instruments held by the Entity. Losses may occur when the underlying assumptions on whch the Entity s trading is based are not completely representative of actual mal"ket conditions. The success of any trading activity is influenced by general economic conditions that may affect the level and volatility of equity prices. cred:it spreads and interest rates for both equity and in1erest rate sensitive instruments. Unexpected volatility or illiquidity in relevant markets could adversely affect the Entity's operating results.** **Market risk represents the potential loss that can be caused by increases or decreases in the fair value of fnancial instruments resulting from market fluctuations.** **Interest rate risk is the risk that the fair value or future cash flows of fixed in:ome 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 va�ue of fiixed income securities tends to increase. This risk is generally greater for long-term securities than for short-term securities.** {12}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE K - FINANCIAL INSTRUMENTS AND RISK (CONTINUED)** **Currency risk is the risk that the fair value of financial instruments will fluctuate because of changes in foreign exchange rates. Financial instruments that are denominated in a non-U.S. currency are subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of shor1-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation and political developments.** **Credit risk represents the potential loss that would occur if counterparties f ail to :,erform pursuant to the terms of their obligations. In addition to its financial instruments and related transactions, the Entity is subject to credit risk to the extent a custodian cr- broker with whom it conducts business is unable to f ulfi ll contractual obligations.** **Liquidity risk is the risk stemming from the lack of marketability of a position that :annot be bought or sold quickly enough to prevent or minimize a loss.** **While the use of certain forms of leverage, including margin borrowing and derivative instruments, can substantially improve the return on invested capital; such use may also increase the adverse impact to which the portfolio of the Entity may be subjecL** **Short selling, or the sale of securities not owned by the Entity, exposes the Entity to the risk of loss in an amount greater than the initial proceeds. Such losses can increase rapidly, and in the case of equities, without effective limit. n1e Entity limits the risk associated with the short selling a equities by hedging with other fii nancial instruments.** **The Entity purchases options on securities.** #### **NOTE L - DERIVATIVE FINANCIAL INSTRUMENTS** **Derivative financial instrvments may be used to manage market risk and to take an active long or sho11 position in the market. Should interest rates or credit spreads move unexpectedly, anticipated benefi�s may not be achieved and a loss realized. Furthermore, the !)Se of derivative financial instruments involves the risk of imperfect correlation in movements in the price of the instruments, interest rates and t he underlying assets.** **Derivatives used for risk management include options and warrants.** **The following table sets forth the annual volume of the Entity's derivative financal instAnnual
Volume | | Fair Value | | | Statement of
Financial Condition | | |-----------|---------------------------------|--|------------|----|-------------|-------------------------------------|--| | | (Contracts) • | | Assets | | Liabilities | Location | | | Options | 245 \$ | | 288.632 | \$ | | Securities owned | | | Warrar.ts | 3,073 | | | | | | | **• Approximate annual volume of contracts shown is in thousands.** {13}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2021 (dollars in thousands)** # **NOTE M - INCOME TAXES** " . **No provision for federal income taxes has been made because the Entity is a partnership and, therefore, is not subject to federal income taxes. The Entity Is currentlly not subject to state or loca income taxes.** .,, **The Entity is presently associated with open state examinations with the state of California for tax years 2009- 2011. A1ny resulting adjustments pursuant to the examinations would be reportable by the Entity's partners on their respective tax returns.** • **At December 31, 2021, management has determined that there are no material uncertain income tax positions.** # **NOTE N - NET CAPITAL REQUIREMENT** **As a registered broker-dealer, the Entity is subject to the SECs Uniform Net Capital Rule 15c3-1. The Entity computes its net capital under the alternative method permitted by the rule, which requires ii to maintain minimum net capital, as defiined, of the greater of \$250 or an amount determinable based on the market price and number of securities in which the Entity is a market-maker, not to exceed \$1,000. As of December 31, 2021, the Entity had net capital of \$281,184, which exceeded its requirement of \$1,000 by \$280, 184.** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.