# TWO SIGMA SECURITIES, LLC X-17A-5 (2026-02-27) — Broker-dealer annual report - Company: TWO SIGMA SECURITIES, LLC - Form: X-17A-5 - Filed: 2026-02-27 - Period: 2025-12-31 - Accession: 0000899140-26-000302 - CIK: 1450144 - File #: 8-68090 - Type: Broker-dealer - Material weakness: No - Auditor: Ernst & Young LLP - Auditor location: New York, NY - Contact: Kelly Mousseau - Phone: 646-860-4693 - Email: jason.lubetsky@tssecurities.com - Website: tssecurities.com - Signed by: Jason Lubetsky (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1450144/000089914026000302/SOFCPublic.pdf --- {0}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION Two Sigma Securities, LLC December 31, 2025 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ | ANNUAL REPORTS | |----------------| | FORM X-17A-5 | | PART III | | OMB APPROVAL | |---------------------------| | OMB Number: 3235-0123 | | Expires: Nov. 30, 2026 | | Estimated average burden | | hours per response:
12 | 8-68090 | | 01/01/2025 | 12/31/2025 | |--------------------------|---------------------------|---------------------------------| | | | | | | | | | Two
Sigma | Securities,
LLC | | | ■
100
Avenue
of | Americas,
2nd
Floor | | | | | | | New
York | NY | 10013 | | | | | | | | | | Jason
Lubetsky | (212)775-6624 | jason.lubetsky@tssecurities.com | | | | | | | | | | Ernst
&
Young
LLP | | | | |----------------------------|-------------|----|--------| | | | | | | One
Manhattan
West | New
York | NY | 100001 | | | | | | | 10/20/2003 | | 42 | | | | | | | | | | | | | | | | | {2}------------------------------------------------ | Jason Lubetsky | | | | |----------------|-----|---------------------------|--| | | | Two Sigma Securities, LLC | | | 12/31 | 025 | | | | ignature: | Port | |-----------|------| | | | Chief Financial Officer - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ ## Statement of Financial Condition ## December 31, 2025 ## **Contents** | Report of Independent Registered Public Accounting Firm 1 | | |-----------------------------------------------------------|--| | Statement of Financial Condition 2 | | | Notes to Statement of Financial Condition 3 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Ernst & Young LLP One Manhattan West New York, NY 10001-8604 Tel: +1 212 773 3000 ey.com #### Report of Independent Registered Public Accounting Firm The Member and Management Two Sigma Securities, LLC #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Two Sigma Securities, LLC (the "Company") as of December 31, 2025 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2025, in conformity with U.S. generally accepted accounting principles. #### Basis for Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2008. February 27, 2026 {5}------------------------------------------------ #### Statement of Financial Condition December 31, 2025 | Assets | | |------------------------------------------------------------------|---------------------| | Cash | \$
484,861 | | Investments in securities, at fair value | 785,633,403 | | Due from clearing brokers | 200,325,656 | | Securities purchased under agreements to resell | 13,968,961 | | Due from exchanges | 3,195,614 | | Due from affiliates | 2,078,057 | | Due from broker-dealers | 114,499 | | Operating lease right-of-use assets | 15,319,169 | | Exchange memberships, at carrying value (fair value \$2,303,600) | 3,090,305 | | Other assets | 1,859,100 | | Total assets | \$
1,026,069,625 | | | | | Liabilities and Member's Equity | | | Securities sold, not yet purchased, at fair value | \$
734,737,079 | | Due to affiliates | 17,229,600 | | Securities sold under agreements to repurchase | 9,962,317 | | Due to broker-dealers | 6,959,013 | | Due to clearing brokers | 2,299,809 | | Due to exchanges | 1,966,476 | | Operating lease liabilities | 15,319,169 | | Accounts payable and accrued expenses | 1,277,986 | | Total liabilities | 789,751,449 | | | | | Member's equity | 236,318,176 | | | | *The accompanying notes are an integral part of the statement of financial condition.* {6}------------------------------------------------ # Notes to the Statement of Financial Condition December 31, 2025 #### **1. Nature of Operations** Two Sigma Securities, LLC (the "Company"), a wholly owned subsidiary of Two Sigma Securities Group Holdings, LLC ("TSSGH"), is a limited liability company formed under the laws of the state of Delaware in October 2008. Prior to March 1, 2025, the Company was a wholly owned subsidiary of Two Sigma Capital Markets, LP ("TSCM"). On March 1, 2025, pursuant to an internal reorganization of entities under common control, the Company's immediate parent company changed from TSCM to TSSGH. The Company remained under common control of the ultimate parent, TSCM, throughout the period. The reorganization had no effect on the Company's operations. The Company is registered as a broker-dealer with the Securities and Exchange Commission (the "SEC") and is a member of the Securities Investor Protection Corporation ("SIPC") and Financial Industry Regulatory Authority, Inc. ("FINRA"), which acts as the Company's designated examining authority. The Company is also registered with various securities and commodities exchanges. The Company's operations primarily consist of market-making in equity securities and proprietary trading in equity securities and futures contracts on various exchanges. The Company facilitates the execution of orders in an agency capacity on behalf of its affiliate broker-dealer, Two Sigma Execution Services, LLC ("TSES"), in transactions involving equity securities. TSES is a registered broker-dealer with the SEC and is a member of SIPC and FINRA. #### **2. Summary of Significant Accounting Policies** #### **Basis of Presentation** The statement of financial condition is prepared in accordance with U.S. generally accepted accounting principles ("GAAP") which requires management to make estimates and assumptions that affect the amounts reported in the statement of financial condition and the accompanying notes. Actual results could differ from those estimates. #### **Cash** The Company maintains cash in bank deposit accounts, which at times, may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and does not believe there to be significant credit risk with respect to these accounts. {7}------------------------------------------------ # Notes to the Statement of Financial Condition (continued) ## **2. Summary of Significant Accounting Policies (continued)** #### **Investments in Securities and Securities Sold, Not Yet Purchased** Equity securities and exchange-traded notes are generally valued at the closing or last sale price on the primary exchange on which such securities are traded. Government issued fixed income securities are generally valued at the mid-price based on bid and ask prices obtained from independent pricing vendors, determined at a time consistent with the pricing of related futures contracts. All security transactions are recorded on a trade date basis. #### **Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase** The Company enters into overnight reverse repurchase and repurchase agreements. The Company accounts for these transactions as secured borrowings. Reverse repurchase and repurchase agreements are carried at their contractual amounts plus accrued interest, which approximates fair value. The underlying securities in these transactions are generally comprised of U.S. government securities. At December 31, 2025, the fair value of securities received under repurchase agreements and securities financed under repurchase agreements was approximately \$13,968,961 and \$9,962,317, respectively. #### **Right-of-use Assets and Lease Liabilities** In accordance with Accounting Standards Codification ("ASC") 842, *Leases*, the Company analyzes its contracts to identify any leases or embedded leases and to classify components within these leases as lease or non-lease components. The Company records its leases as right-of-use assets and lease liabilities at the present value of future lease payments at commencement, using the lessor's implicit rate, in the statement of financial condition. Lease terms include noncancelable periods and periods under options to extend or terminate the lease when it is reasonably certain that the option would be exercised. Non-lease components relate to expenses incurred by the lessor for utilities and maintenance which are charged monthly by the lessor and are excluded from measurement. The Company has elected to exclude leases with a term of one year or less. #### **Foreign Currency Translation** The functional currency of the Company is the U.S. dollar. The Company may engage in transactions that are denominated in currencies other than its functional currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using current exchange rates at the date of valuation. {8}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) ## **2. Summary of Significant Accounting Policies (continued)** ### **Due from/to Clearing Brokers** Due from/to clearing brokers is primarily comprised of cash deposits, net proceeds receivable/payable from securities sold and purchased, open equity on futures contracts, positions in options on futures contracts, net interest receivable/payable and trading costs payable, which are recorded on a trade date basis. The clearing brokers allow the Company to use cash received on securities sold, not yet purchased to effectuate additional security transactions. ## **Offsetting Financial Instruments** Financial assets and liabilities are offset by counterparty when it has been determined by the Company to be legally enforceable and where certain other criteria are met in accordance with applicable offsetting guidance. As a result, the net exposure to each counterparty is either presented as an asset or a liability in the statement of financial condition. #### **Due from/to Exchanges and Due from/to Broker-Dealers** Due from/to exchanges is primarily comprised of liquidity rebates earned and liquidity fees incurred through executing trades on each exchange. Due to broker-dealers primarily consists of execution costs and order flow fees charged by other broker-dealers. Due from broker-dealers consists of receivables for pass through costs related to trades executed by the Company on behalf of other broker-dealers. All due from/to exchanges and due from/to broker-dealers are recorded on a trade date basis. #### **Exchange Memberships** The Company owns various exchange memberships which provide the Company with the right to conduct business on the exchange at lower member rates and are recorded at cost or, if an other than temporary impairment in value has occurred, at a value that reflects management's estimate of the value after consideration of any such impairment. Additionally, certain exchange memberships represent ownership interest in those exchanges. As of December 31, 2025, the total cost and carrying value of exchange memberships are \$3,315,305 and \$3,090,305, respectively. The total fair value of exchange memberships is \$2,303,600. #### **Income Taxes** The Company is a single member limited liability company and is treated as a disregarded entity for federal and state income tax reporting purposes. The Internal Revenue Code ("IRC") and related state tax codes generally provide that any income or loss is passed through to the ultimate beneficial owners for federal and state income tax purposes. TSCM, the ultimate beneficial owner and parent of TSSGH, as a partnership, is subject to New York City unincorporated business tax ("UBT") based on a statutory tax rate of 4%. {9}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) ## **2. Summary of Significant Accounting Policies (continued)** ### **Income Taxes (continued)** TSCM adopted a market-based sourcing methodology with respect to its indirectly attributed broker-dealer revenue for indirect UBT purposes. At December 31, 2025, the Company has an accumulated UBT benefit of \$4,274,540 from TSSGH, ultimately due from TSCM. In accordance with ASC 740, *Income Taxes*, the Company recorded a full valuation allowance on the accumulated UBT benefit of \$4,274,540, as it is more-likely-than-not that the UBT related deferred tax asset will not be realized by the Company's ultimate parent, TSCM. The Company is required to recognize, measure, present and disclose uncertain tax positions in the statement of financial condition. Accounting standards require that tax expenses be recorded in the current year for tax positions which are deemed to not meet a "more-likely-than-not" threshold of being sustained by the applicable tax authority. Management has analyzed all income tax aspects applicable to the Company's operations for all open tax years and concluded that no provision for income tax is required in the Company's statement of financial condition, other than income taxes that have historically been recorded in the normal course of business of the Company. ## **Segment Reporting** The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including principal transactions and agency transactions. The Company has identified its Chief Executive Officer as the chief operating decision maker ("CODM") who uses net income to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities while using information of the Company as a whole. #### **3. Fair Value Measurement** The Company measures and reports its investments at fair value in accordance with ASC 820, *Fair Value Measurement*. ASC 820 defines fair value, establishes a framework to measure fair value and requires certain disclosures to be made. The Company's investments are classified and disclosed based on market price observability. Market price observability is impacted by a number of factors, including, but not limited to, the type of investment and the characteristics specific to the investment. Investments with readily available quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. The Company's investments are classified into the following categories: {10}------------------------------------------------ ### Notes to the Statement of Financial Condition (continued) #### **3. Fair Value Measurement (continued)** *Level I –* Quoted prices are available on exchanges as of the reporting date. Where investments are traded on active markets, the Company does not adjust the quoted prices for these investments. The types of investments which would generally be included in Level I comprise listed equities, listed futures contracts, listed options on futures, U.S. government securities and other exchange-traded investments. *Level II* – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or quotations received from broker-dealers and other external pricing vendors. The key inputs into valuation may include, but are not limited to, yield curves, credit curves, volatility curves, interest rate curves, reference securities prices, foreign currency spots, forward rates, notional amounts, maturity dates and correlation data. The types of investments which would generally be included in this category comprise certain bonds, options and less liquid and restricted equity securities. *Level III –* Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The following table summarizes the Company's investments by level, measured at fair value on a recurring basis, at December 31, 2025: | | Fair Value at December 31, 2025 | | | | | | | | | |-------------------------------|---------------------------------|----|----------|----|-----------|----|--------------|----|-------------| | | Level I | | Level II | | Level III | | Netting | | Totals | | Assets | | | | | | | | | | | Equity securities (1) (2) | \$
777,925,398 | \$ | 361,928 | \$ | - | \$ | - | \$ | 778,287,326 | | Options on futures (3) | 14,224,093 | | - | | - | | (11,880,690) | | 2,343,403 | | U.S government securities (2) | 3,984,844 | | - | | - | | - | | 3,984,844 | | Exchange-traded notes (2) | 3,361,233 | | - | | - | | - | | 3,361,233 | | Futures contracts (3) | 156,767 | | - | | - | | (142,378) | | 14,389 | | Total assets | \$
799,652,335 | \$ | 361,928 | \$ | - | \$ | (12,023,068) | \$ | 787,991,195 | | | | | | | | | | | | | Liabilities | | | | | | | | | | | Equity securities (1) (2) | \$
730,668,109 | \$ | 19,004 | \$ | - | \$ | - | \$ | 730,687,113 | | Options on futures (3) | 11,880,690 | | - | | - | | (11,880,690) | | - | | U.S government securities (2) | 3,964,473 | | - | | - | | - | | 3,964,473 | | Exchange-traded notes (2) | 85,493 | | - | | - | | - | | 85,493 | | Futures contracts (3) | 2,040,876 | | - | | - | | (142,378) | | 1,898,498 | | Total liabilities | \$
748,639,641 | \$ | 19,004 | \$ | - | \$ | (12,023,068) | \$ | 736,635,577 | (1) Equity securities include common stock, preferred stock and exchange-traded funds. (2) Amounts are included in investments in securities or securities sold, not yet purchased, as applicable, in the statement of financial condition. (3) Futures contracts and options on futures are included in due from/to clearing brokers in the statement financial condition. {11}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) ### **4. Transactions with Related Parties** The Company has various sublease agreements with TSI for office space. The sublease agreements provide for rental payments to be made directly to TSI. In relation to the sublease agreements, the Company maintains a deposit with TSI in the amount of \$1,285,976 which is included in other assets in the statement of financial condition. At December 31, 2025, the Company has operating right-of-use assets and operating lease liabilities of \$15,319,169 and \$15,319,169, respectively, associated with its affiliated sublease agreement. Pursuant to an expense sharing agreement between the Company and TSI (the "TSI Expense Sharing Agreement"), the Company records an expense based on the monthly expense sharing fee for services provided by TSI. These services include, but are not limited to, employee compensation, technology equipment and general expenses. Allocation of expenses is determined based on various cost drivers, each of which is individually considered based on the nature and utilization of the expense. Payments to TSI for such services are typically made monthly by the Company. Certain other operating expenses not included in the TSI Expense Sharing Agreement, but incurred by the Company and initially paid by TSI, are subsequently reimbursed by the Company. Pursuant to a licensing agreement (the "License Agreement") between the Company and TSI, the Company records an expense for a license to use data feeds. As of December 31, 2025, \$15,267,710 remains payable to TSI and is included in due to affiliates in the statement of financial condition. The Company maintains an expense sharing agreement with TSS UK Limited ("TSS UK") (the "TSS UK Expense Sharing Agreement"). In accordance with the TSS UK Expense Sharing Agreement, the Company records an expense based on the monthly expense sharing fee for services. This primarily includes employee compensation and compensation related costs. These costs are generally subject to a 10% mark-up. Additionally, certain other operating expenses not included in the TSS UK Expense Sharing Agreement, which are incurred by TSS and/or TSS UK, will be subsequently reimbursed. As of December 31, 2025, \$1,961,890 remains payable to TSS UK for expense sharing fees and is included in due to affiliates in the statement of financial condition. The Company additionally maintains an expense sharing agreement with TSES ("the TSES Expense Sharing Agreement"). In accordance with the TSES Expense Sharing Agreement, the Company provides certain products and services on behalf of TSES and pays for certain expenses. This primarily includes space sharing, in which the Company allows TSES to occupy a portion of the Company's office space. The Company allocates costs related to provided products and services based on various cost drivers, each of which is individually considered based on the nature and utilization of the expense. Payments from TSES for such products and services are typically made monthly to the Company. The Company enters into securities transactions on behalf of its affiliate broker-dealer, TSES, in the normal course of business. Through the execution of the broker-dealer affiliate-driven security {12}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) #### **4. Transactions with Related Parties (continued)** transactions, the Company, acting in capacity as an agent, receives liquidity rebates from certain exchanges, pays liquidity fees to certain exchanges, pays execution fees to other broker-dealers, and pays consolidated audit trail fees ("CAT") to certain regulatory bodies and other brokerdealers, which are passed through to TSES on a monthly basis. At December 31, 2025, \$2,078,057 remains receivable from TSES and is included in due from affiliates in the statement of financial condition. #### **5. Commitments and Contingencies** As of December 31, 2025, maturities of the outstanding operating lease liabilities for the Company are as follows: | 2026 | \$
2,082,316 | |-------------------------------------|------------------| | 2027 | 2,082,316 | | 2028 | 2,082,316 | | 2029 | 2,082,316 | | 2030 | 2,082,316 | | 2031 and thereafter | 6,246,947 | | Total minimum future lease payments | 16,658,527 | | Amounts representing interest | (1,339,358) | | | \$
15,319,169 | The Company's operating lease had a remaining lease term of 8.01 years and a discount rate of 2.15%. #### **6. Financial Instruments with Off-Balance Sheet Risk** The Company enters into transactions in financial instruments, which may result in off-balance sheet risk. The Company's off-balance sheet risk includes risk of loss for securities sold, not yet purchased, at fair value, which represents obligations of the Company to deliver the specified security at the contracted price and, thereby, creates a liability to repurchase the security in the market at prevailing prices. Accordingly, these transactions result in off-balance sheet risk as the satisfaction of such obligations may exceed the amount recognized in the statement of financial condition. Option contracts represent commitments or options to purchase or sell financial instruments at future dates in accordance with specified terms. The Company is exposed to off-balance sheet risk when writing options as the contingent obligation to satisfy the purchase or sale of the underlying financial instrument may exceed the amount recorded in the statement of financial condition. The {13}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) #### **6. Financial Instruments with Off-Balance Sheet Risk (continued)** Company's maximum payout amount relating to written options is limited to the notional amount of these contracts. Maximum payout amounts could be offset by the subsequent sale, if any, of assets obtained via the settlement of a payout event. The Company enters into futures contracts, which have inherent off-balance sheet risk. Unrealized gains or losses, rather than notional amounts, represent the fair value of such positions. Futures contracts may be settled by physical delivery of the underlying asset, cash settlement on the settlement date or by entering into an offsetting futures contract prior to the settlement date. The Company does not intend to hold its futures contracts until settlement date. The Company enters into derivative financial instruments in the normal course of business. The following table sets forth the fair value and notional value of derivative contracts the Company held as of December 31, 2025: | | Derivative assets | | | | Derivative liabilities | | | | | |--------------------------------------------------------------------------|-------------------|-----------------------|----|--------------------------------|------------------------|-------------------------|--------------------------------|--------------------------------|--| | Gross derivative contracts | | Fair Value | | Notional or
Contract Amount | | Fair Value | Notional or
Contract Amount | | | | Options on futures (1)
Futures contracts (1) | \$ | 14,224,093
156,767 | \$ | 6,718,745,000
1,205,699,587 | \$ | 11,880,690
2,040,876 | \$ | 8,226,371,500
1,028,231,628 | | | Total derivatives | | 14,380,860 | \$ | 7,924,444,587 | | 13,921,566 | \$ | 9,254,603,128 | | | Amounts that have been offset in the
statement of financial condition | | (12,023,068) | | | | (12,023,068) | | | | | Net derivative contracts | \$ | 2,357,792 | | | \$ | 1,898,498 | | | | (1) Futures contracts and options on futures are included in due from/to clearing brokers in the statement of financial condition. #### **7. Segment Reporting** The Company is a single operating segment. Segment assets can be found in the statement of financial condition. #### **8. Credit Risk** In the normal course of business, the Company engages in securities transactions acting as an agent on behalf of its affiliate broker-dealer and acting as a principal, riskless principal or agent on behalf of external counterparties, which primarily consist of other registered broker-dealers. Securities transactions of the Company are cleared by major securities firms. {14}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) ## **8. Credit Risk (continued)** At December 31, 2025, all of the Company's investments in securities and securities sold, not yet purchased are positions with these clearing brokers. Most of the Company's credit risk is concentrated with its clearing brokers, broker-dealer counterparties and affiliate entities. Such risk is partially mitigated by the obligation of these financial institutions to comply with rules and regulations governing financial institutions. These rules and regulations generally require maintenance of minimum net capital and segregation of customers' funds and financial instruments from the holdings of the financial institutions themselves. The Company actively monitors the creditworthiness of counterparties with which it conducts its business and employs various real-time risk controls. The Company is exposed to credit risk from exchange-traded derivatives, such as exchange-traded futures and exchange-traded options. Such risk is reduced by rules and regulations of each individual exchange, such as margin maintenance requirement. The derivatives are margined on a daily basis, which reduces the credit risk related to these financial instruments. #### **9. Operational and Liquidity Risk** Operational risk is the potential for loss caused by a deficiency in transaction processing and settlement or in accounting systems. The Company maintains controls that mitigate operational risk in the form of systems and procedures to procure necessary documentation for trading activities and to record and reconcile transactions and positions. The Company is exposed to liquidity risk for its securities and derivative investments. There can be no assurance that a market for any financial instrument will remain sufficiently liquid to realize the current value of the financial instrument. The liquidation of any such investments may then be possible only at substantial discounts/premiums and such investments may be extremely difficult to value with any degree of certainty. The Company actively monitors and maintains excess capital for various contingency events in relation to operational and liquidity risk. #### **10. Market Risk** Market risk is the risk that external market variables, such as equities and commodities prices, volatility, interest rates and foreign exchange rates have the ability to cause the value of an investment to decrease. The Company manages this risk through setting risk limits on positions, market sectors and other factors that are determined by senior management. #### **11. Indemnifications** In the normal course of business, the Company agrees to indemnify its clearing brokers against specified potential losses in connection with their acting as an agent of or providing services to the Company. The maximum potential amount of future payments that the Company could be required {15}------------------------------------------------ ## Notes to the Statement of Financial Condition (continued) ### **11. Indemnifications (continued)** to make under this indemnification cannot be estimated. However, the Company believes that it is unlikely it will have to make payments under these arrangements and, as such, has not recorded any contingent liability in the statement of financial condition for this indemnification. All agency and proprietary transactions at December 31, 2025 settled without adverse financial effect on the Company. #### **12. Regulatory Requirements** The Company is subject to SEC Uniform Net Capital Rule 15c3-1 ("Rule 15c3-1") under the Securities Exchange Act of 1934. The Company has elected to compute its net capital under the alternative standard pursuant to Rule 15c3-1. At December 31, 2025, the Company had net capital of \$169,113,312 which exceeded the minimum required net capital of \$1,000,000 by \$168,113,312. To the extent required to maintain the Company's compliance with regulatory requirements, including Rule 15c3-1, withdrawals of capital could be limited. The Company is exempt from the provisions of SEC Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to proprietary trading. #### **13. Subsequent Events** The Company has evaluated subsequent events through the date of issuance of the statement of financial condition. Except as otherwise noted, the Company has determined that no events have occurred that are required to be recognized or disclosed in the statement of financial condition. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.