# PICTET OVERSEAS INC. X-17A-5 (2026-02-26) — Broker-dealer annual report
- Company: PICTET OVERSEAS INC.
- Form: X-17A-5
- Filed: 2026-02-26
- Period: 2025-12-31
- Accession: 0000923189-26-000004
- CIK: 923189
- File #: 8-47285
- Type: Broker-dealer
- Material weakness: No
- Auditor: PricewaterhouseCoopers, LLP
- Auditor location: Montreal, Z4
- Contact: RUST Laurent
- Phone: 15142956632
- Email: mjean@pictet.com
- Website: pictet.com
- Signed by: Laurent RUST (CFO, Executive Director)
Original filing: https://www.sec.gov/Archives/edgar/data/923189/000092318926000004/poiauditafs2025.pdf
---
{0}------------------------------------------------
# Pictet Overseas Inc
Financial Statements and Supplemental Schedules Pursuant to Rule 17a-5 under the Securities Exchange Act 0f 1934 and Regulation 1.10 ofthe Commodity Exchange Act December 31, 2025 and 2024
{1}------------------------------------------------
# **Report ofIndependent Registered Public Accounting Firm**
To the Board of Directors of Pictet Overseas Inc.
## **Opinion on the Financial Statements**
We have audited the accompanying statements offinancial condition of Pictet Overseas Inc. (the Company) as at December 31, 2025 and 2024, and the related statements of changes in shareholder's equity, statements of changes in liabilities subordinated to the claim of general creditors pursuant to a satisfactory subordination agreement, statements of operations and comprehensive income and retained earnings and statements of cash flows for the years then ended, including 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 ofthe Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
## **Basis for Opinion**
These financial statements are the responsibility ofthe Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 ofthe Securities and Exchange Commission and the PCAOB.
We conducted our audits ofthese financial statements in accordance with the standards ofthe PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness ofthe Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement ofthe 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 audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation ofthe financial statements. We believe that our audits provide a reasonable basis for our opinion.
> PricewaterhouseCoopers LLP 1250 René-Lévesque Boulevard West, Suite 2500 Montréal, Quebec, Canada H3B 4Yl T.: +1514 205 5000, F.: +1514 876 1502 Fax to mail: ca\_montreal\_main\_fax@pwc.com
**"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.**
{2}------------------------------------------------
# **Supplemental Information**
The accompanying statements of computation of net capital and computation of aggregate indebtedness as of December 31, 2025 and December 31, 2024 (Schedule D as of December 31, 2025 (collectively, the supplemental information) has been subjected to audit procedures performed in conjunction with the audit ofthe Company's financial statements. The supplemental information is the responsibility ofthe Company's management. Our audit procedures included determining whether the supplemental 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 presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with Rule 17a-5 under the Securities Exchange Act of 1934 and Regulation 1.10 under the Commodity Exchange Act. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
Partnership of Chartered Professional Accountants
Montréal, Canada February 26, 2026
We have served as the Company's auditor since 1996.
{3}------------------------------------------------
## **PICTET OVERSEAS INC. STATEMENTS OF FINANCIAL CONDITION AS AT DECEMBER 31, 2025 AND 2024**
| | | 2025 | 2024 |
|-------------------------------------------------------------------------------------------------------------------------|-------|-----------------------------------|-----------------------------------|
| (expressed in U.S. dollars) | Notes | \$ | \$ |
| | | | |
| Assets | | | |
| Current
assets | | | |
| equivalents
Cash
and cash | | 2,673,398 | 4,571,539 |
| ---
assets
at
fair value through
net
Financial
income | 4 | 24,109,643 | 23,122,500 |
| Short-term
deposits | 5 | 16,300,000 | 14,500,000 |
| Accounts
receivable | | 1,110,717 | 1,066,803 |
| Derivative
financial assets | 6 | 416,452 | 268,204 |
| Due from customers | 7 | | 167,649 |
| Prepaid expenses | | 1,603,224 | 1,645,885 |
| Income taxes receivable | | | 117,687 |
| Total
Assets | | 46,213,434 | 45,460,267 |
| liabilities
Accounts
payable and accrued
Due to correspondents
Income taxes payable
Liabilities
Total | 8 | 1,343,921
130,962
1,474,883 | 1,230,554
167,649
1,398,203 |
| Shareholder's Equity | | | |
| Redeemable
preferred shares | 10 | --
-
-
25,000,000 | 25,000,000 |
| Common shares | 10 | 5,000,000 | 5,000,000 |
| Retained
earnings | | 14,738,551 | 14,062,064 |
| Total
Equity | | 44,738,551 | 44,062,064 |
| Liabilities
Total
and Equity | | 46,213,434 | 45,460,267 |
| Commitments
and contingencies | 19 | | |
**Approved by the Board ofDirectors**
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Director \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Director
The accompanying notes are an integral part of these financial statements.
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## PICTET OVERSEAS INC. STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| | Common | stock | stock
Preferred | | | | | |
|-----------------------------------------------------------------------------------|------------------------------------------------|----------------|---------------------------------------------------|------------|------------------------------------------------|-----------|----------------------|------------|
| | of
Number
Class
A
common
shares | Amount | of
Number
Class
C
preferred
shares | Amount | of
Number
Class D
preferred
shares | Amount | Retained
earnings | Total |
| in U.S. dollars)
(expressed | | \$ | | \$ | | \$ | \$ | \$ |
| -
-
-
--
-
-
-
as at
31, 2023
Balance
December
- | 5,000,000 | 5,000,000 | 22,500,000 | 22,500,000 | 2,500,000 | 2,500,000 | 13,480,317 | 43,480,317 |
| Net
earnings
comprehensive
and | | | | | | | | |
| the
income
year
for | | | | | | | 581,747 | 581,747 |
| as at
2024
Balance
December
31, | --
-
5,000,000 | -
5,000,000 | 22,500,000 | 22,500,000 | 2,500,000 | 2,500,000 | 14,062,064 | 44,062,064 |
| Net
earnings
comprehensive
and | | | | | | | | |
| the
income
for
year | | | | | | | 676,487 | 676,487 |
| as at
Balance
2025
December
31, | 5,000,000 | 5,000,000 | 22,500,000 | 22,500,000 | 2,500,000 | 2,500,000 | 14,738,551 | 44,738,551 |
The accompanying notes are an integral part ofthese financial statements.
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#### PICTET OVERSEAS INC.
## STATEMENTS OF CHANGES IN LIABILITIES SUBORDINATED TO THE CLAIM OF GENERAL CREDITORS PURSUANT TO A SATISFACTORY SUBORDINATION AGREEMENT FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| | 2025 | 2024 |
|-----------------------------------------|------|--------------|
| (expressed in U.S. dollars) | \$ | \$ |
| of
-
Beginning
year
Balance | | 12,000,000 |
| Decrease | | (12,000,000) |
| End of
Balance
-
year | | |
The accompanying notes are an integral part of these financial statements.
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## PICTET OVERSEAS INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| | | 2025 | 2024 |
|----------------------------------------------------------------------------------------|-------|------------------|----------------|
| (expressed
in U.S. dollars) | Notes | \$ | \$ |
| Revenues | | | |
| Commissions | 11 | 13,059,872 | 11,182,330 |
| -
Other
Income | 12 | 1,248,822 | 2,544,096 |
| -~
derivative
financial instruments
value of
gain
in fair
Unrealized | | 416,452 | 268,204 |
| -
Interest | | 1,700,493 | 2,723,245 |
| Total
Revenues | | 16,425,639 | 16,717,875 |
| Expenses | | | |
| Personnel expenses | 16 | 3,987,746 | 3,958,387 |
| Operating
expenses | 13 | 7,537,490 | 7,612,875 |
| -
----
eneral and administrative
-
expenses
G | 14 | 3,099,011 | 4,106,581 |
| Interest | 16 | 497 | 242,267 |
| Total
expenses | | 14,624,744 | 15,920,110 |
| Operating
Net
income | | 1,800,895 | ---
797,765 |
| Other
expenses | | 650,000 | |
| Net
Income before income taxes | | ---
1,150,895 | -
797,765 |
| for income taxes
Provision | 15 | -
474,408 | 216,018 |
| Net income and comprehensive income | | | |
| | | 676,487 | 581,747 |
The accorn panying notes are an integral part of these financial statements.
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#### PICTET OVERSEAS INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| | 2025 | 2024 |
|-----------------------------------------------------------------------------------------|-------------------|---------------|
| (expressed in U.S. dollars) | \$ | \$ |
| | | |
| Cash flows from | | |
| Operating
Activities | | |
| Net
income for the year | 676,487 | 581,747 |
| Changes in non-cash operating
working capital
items | | |
| f
Cash segregated
for benefit of customers | | 751,753 |
| i
Unrealized gain on
nancial assets
at fair value through
---
net income | 52,087 | 222,710 |
| Derivative
financial instruments | (148,247) | (55,376) |
| Accounts
receivable | (43,914) | 283,935 |
| Due from customers | 167,649 | 5,348,440 |
| Due from correspondents | | 9,334,454 |
| Prepaid expenses | -
--
42,661 | (69,183) |
| Income taxes receivable | 117,687 | (117,687) |
| Accounts
payable and accrued charges | 113,365 | 290,048 |
| Due to customers | | (14,698,870) |
| Due to correspondents | (167,649) | 141,972 |
| Income tax
payable | 130,962 | (63,517) |
| activities
cash provided by operating
Net | 941,088 | 1,950,426 |
| Investing
Activities | | |
| deposits
Acquisition
of
short-term | (213,300,000) | (223,900,000) |
| Redemption
deposits
of
short-term | 211,500,000 | 239,500,000 |
| Acquisition
of
treasury bills | (165,713,253) | (88,533,409) |
| Redemption
of
treasury bills | 164,674,023 | 85,440,641 |
| activities
Net cash (used in) provided by investing | (2,839,229) | 12,507,232 |
| Financing Activities | | |
| Subordinated
Loan | | (12,000,000) |
| cash (used in) financing activities
Net | | (12,000,000) |
| Net
change in cash and cash equivalents
during the
year | (1,898,141) | 2,457,658 |
| Cash and cash equivalents
- Beginning of
year | 4,571,539 | 2,113,881 |
| Cash and cash equivalents
- End of
year | 2,673,398 | 4,571,539 |
| Supplementary
information | | |
| Interest
pa id | 497 | 242,267 |
| Income taxes paid | 346,038 | 331,687 |
The accompanying notes are an integral part of these financial statements.
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# 1 Organization and nature ofbusiness
Pictet Overseas Inc. (the Company) was incorporated on December 7, 1993 under the laws of Canada and began operations on July 1, 1994. The Company is owned by Sopafin SA (the Parent) and is an affiliate ofBanque Pictet & Cie SA (BPSA).
The Company is registered as a securities broker-dealer with the Securities and Exchange Commission (SEC) in 53 US states, territories, and districts and as an Introducing Broker (IB) with the Commodity Futures Trading Commission (CFTC). The Company is a member ofthe Financial Industry Regulatory Authority (FINRA), the Securities Investor Protection Corporation (SIPC), and the National Futures Association (NFA). On December 20, 2024, the Company discontinued its participation in FCM activities and applied for an Introducing Broker (IB) membership, which was approved by the NFA and the CFTC on January 21, 2025.
The Company provides trade execution services for global equities, fixed income, equity options, foreign exchange, domestic and foreign listed derivative products, and foreign currency forward contracts.
## 2 **Significant accounting policies**
## Basis of presentation
The financial statements have been prepared under accounting principles generally accepted in the United States of America (US GAAP).
The financial statements are prepared and presented in US dollars, which is also the Company's functional currency.
#### **Management estimates**
The preparation of financial statements in conformity with US 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management considers that no significant estimates are made in the context of the financial statements.
(a)
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#### **Cash and cash equivalents**
Cash and cash equivalents consist of balances with banks and highly liquid short-term deposits with maturities ofless than three months.
#### **Short-term deposits**
Short-term investments are classified as held for trading, are initially recognized at fair value and interest is accrued over the term of the deposits and is paid at maturity. They are comprised of highly liquid deposits with a maturity date ofless than 9o days, and as such, are classified as current assets.
#### **Due from and to customers**
Amounts due from and to customers represent receivables or payables resulting from failed trades pending settlement.
#### **Due from and to correspondents**
Amounts due from and to correspondents represent receivables or payables to broker-dealers resulting from failed trades pending settlement.
#### **Income taxes**
The Company provides for income taxes using the liability method of tax allocation. Under this method, future income tax assets and liabilities are determined based on deductible or taxable temporary differences between the financial statement values of assets and liabilities using enacted income tax rates expected to be in effect for the year in which the differences are expected to reverse.
#### **Revenue recognition**
Commission revenue earned from commission-based services is accounted for on a trade date basis when the service is performed. On its riskless principal trades, the Company recognizes a spread on the transaction which is reflected in the statement of operation and comprehensive income for open foreign currency forward contracts on the trade date.
#### Interest income
Interest income consists of interest earned on the Company's cash and cash equivalents balances, its investments in Treasury Bills and short-term deposits.
{10}------------------------------------------------
#### Other income
Other income includes include fees for client services provided by the Company on behalf of affiliates to serve external clients' needs, such as administration, custody, and operations, as well as to develop new product offerings. In the year ended December 31, 2025 and 2024, other income also included FCM minimum fees, which resulted from a service level agreement with BPSA for services the Company provided as an FCM (until the FCM related contracts were terminated in 2025 following the FCM discontinuation in January 2025).
#### **Agency and principal transactions**
In its capacity as a broker-dealer, the Company's main business activity is to offer brokerage services on a delivery versus payment basis, and as such, the Company does not hold customer funds or securities. The Company's product offering includes equities, fixed income, equity options, foreign exchange and foreign currency forward contracts. The Company acts as agent when executing client transactions on equities and equity options. As agent, the Company is acting only in a broker capacity, purchasing or selling the securities against receipt of payment or delivery of stock from the client's custodian.
For fixed income and foreign exchange spot and forward transactions, the Company acts as a riskless principal and enters into back-to-back trades between itself, its counterparty and its client, and earns a spread on the transaction. The Company accepts foreign exchange orders and enters into forward contracts on foreign exchange only from customers for whom BPSA is the custodian. The Company hedges all of its foreign exchange orders back-to-back exclusively with BPSA, thus eliminating any counterparty credit risk, as BPSA acts as both the prime broker and custodian ofthe client and also as the Company's own foreign exchange counterparty.
#### **Introducing Broker Activities**
As an introducing broker (IB), the Company provides trade execution services for domestic and foreign listed derivative products. The Company acts as an intermediary for its customers' derivative transactions and does not hold customer funds or securities. The Company discontinued its FCM membership on December 20, 2024, and now operates solely as an IB, continuing to offer trade execution servIces.
#### **Foreign currency translation**
Monetary assets and liabilities denominated in a foreign currency are translated at the rates in effect at the statement offinancial condition date. Revenues and expenses denominated in a foreign currency are translated into US dollars at the rate of exchange prevailing at the transaction date. Gains and losses on foreign exchange are included in the statement of operation and comprehensive income.
{11}------------------------------------------------
#### **Financial instruments**
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions ofthe instrument. Financial assets are no longer recognized when the rights to receive cash flows from the instruments have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. Financial liabilities are no longer recognized when they have expired or have been cancelled.
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial condition when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.
## **Estimated fair value offinancial instruments**
The Company values its financial instruments using a hierarchy offair values that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.
The fair value hierarchy can be summarized as follows:
Level 1- Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation ofthese products does not entail a significant degree ofjudgment.
Level 2- Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3- Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
#### **Derivatives**
Derivative contracts can be exchange-traded or over the counter (OTC). Exchange-traded derivatives typically fall within Level 1 or Level 2 ofthe fair value hierarchy depending on whether they are deemed to be actively traded or not. The Company defines an active market based on the liquidity of the product. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market based inputs to models, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
{12}------------------------------------------------
## **Classification offinancial assets and financial liabilities**
Financial assets and financial liabilities are classified in one of the following categories: fair value through net income (FVTNI) or loans and receivables.
Financial assets designated at FVTNI comprise US Government Treasury Bills and derivative financial instruments. These financial instruments are recorded at fair value, with changes in fair value recorded in net income and comprehensive income for the year.
Financial assets designated as loans and receivables comprise cash and cash equivalents, short-term deposits, accounts receivable, due from customers and due from correspondents. These financial assets are recorded at amortized cost, net ofimpairment losses if any.
Financial liabilities designated as loans and receivables comprise accounts payable and accrued charges, due to customers and, due to correspondents. These financial liabilities initially recognized at fair value are recorded at amortized cost.
## **3 Recent accounting developments - Accounting guidance recently adopted**
There were no new standards that were recently issued that materially impacted the Company.
## **4 Financial assets at fair value through net income**
| | 2025
\$ | 2024
\$ |
|-----------------------------------------------------|------------|------------|
| US Government
Bills at
Treasury
fair value | 24,109,643 | 23,122,500 |
## s **Short-term deposits**
As of December 31, 2025, the Company had two short-term deposits in the amounts of \$14,500,000 and \$1,800,000, bearing interest at 3.76% and 3.75%, respectively, and maturing on January 16 and January 23, 2026, respectively.
As of December 31, 2024, the Company had two short-term deposits in the amounts of \$10,500,000 and \$4,000,000, bearing interest at 4.5% and 4.5%, respectively, and maturing on January 6 and January 1o, 2025, respectively.
{13}------------------------------------------------
## **6 Derivative financial instruments**
Derivative contracts are instruments, such as futures, forwards, swaps or option contracts that derive their value from underlying assets, indices, reference rates or a combination ofthese factors. Derivative contracts may be contracts which are privately negotiated and referred to as OTC derivatives or actively traded on an exchange.
Substantially all ofthe Company's derivative transactions are entered into on behalf of its customers.
#### **Forward contracts**
The Company accepts foreign exchange orders from and enters into foreign currency forward contracts with customers. These transactions are riskless principal transactions. The Company hedges all of its foreign exchange orders back-to-back exclusively with BPSA.
In all circumstances, BPSA acts as both the prime broker and custodian of the client and also as the Company's own foreign exchange counterparty. Therefore, the counterparty credit risk is entirely hedged as BPSA is the Company's counterpart for both the derivative asset and liability. These backto-back transactions are offset, and only the resulting spread is reflected in the statement offinancial condition and in the statement of operation and comprehensive income.
#### **Other derivative financial instruments**
Other derivative financial instruments result mainly from transactions on behalf of customers in which the Company contracts with counterparties on the market.
{14}------------------------------------------------
The fair value ofthe derivative financial instruments netted in the statement offinancial condition is as follows:
| | | | | | 2025 |
|-------------------------------|------------------|---------------------------------|--------------------|----------------|----------------|
| | Derivative
at | Derivative
liabilities
at | | Contract | |
| | assets | | Exchange
traded | volume | Total |
| | fair value | fair value | | OTC | |
| Foreign exchange | \$ | \$ | \$ | \$ | \$ |
| Forward contracts
maturity | | | | | |
| Under 3 months | 266,111 | | | 17,092,978,691 | 17,092,978,691 |
| 3 and 6 months
Between | 112,245 | | | 10,058,169,790 | 10,058,169,790 |
| 9 and 12 months
Between | 38,095 | | | 111,608,865 | 111,608,865 |
| | 416,451 | | | 27,262,757,346 | 27,262,757,346 |
| | Derivative
assets
at
fair value
\$ | Derivative
liabilities
at
fair value
\$ | Exchange
traded
\$ | Contract
volume
OTC
\$ | Total
\$ |
|-------------------------------|------------------------------------------------|-----------------------------------------------------|--------------------------|---------------------------------|----------------|
| Foreign exchange | | | | | |
| Forward contracts
maturity | | | | | |
| 3 months
Under | 159,355 | | | 14,568,635,114 | 14,568,635,114 |
| 3 and 6 months
Between | 100,898 | | | 8,949,456,518 | 8,949,456,518 |
| 9 and 12 months
Between | 7,951 | | | 32,150,862 | 32,150,862 |
| | 268,204 | | | 23,550,242,494 | 23,550,242,494 |
# 7 **Due from customers**
| | 2025
\$ | 2024
\$ |
|----------------------------------------|------------|------------|
| settlement
Failed trades
pending | | 167,649 |
**2024**
{15}------------------------------------------------
# 8 Due to correspondents
| | 2025
\$ | 2024
\$ |
|-------------------------------------------|------------|------------|
| trades
settlement
pending
Failed | | 167,649 |
## 9 **Credit facilities**
On December 5, 2019, the Company entered into a broker loan and security agreement with the Bank of Montreal (the Bank). Under the terms of this agreement, the Bank extended and/or renewed up to \$10,000,000 of secured loans on a revolving, uncommitted basis at the Bank's prime rate. The borrowed funds are secured by marketable securities that the Company has on deposit with the Bank. As at December 31, 2025 and 2024, no amount is due under this agreement.
## **10 Capital stock**
Authorized, unlimited as to number.
Class A common shares, voting;
Class B common shares, non-voting;
- Class A preferred shares, voting, non-participating, without par value, ranking in priority to Class B, C and D preferred shares and Class A and B common shares, with entitlement to dividends as declared by the Board of Directors, redeemable at the option of the Company at their paid-in amount or the fair value of the consideration received, plus declared and unpaid dividends.
- Class B preferred shares, non-voting, non-participating, without par value, ranking in priority to Class C and D preferred shares and Class A and B common shares, with entitlement to dividends as declared by the Board of Directors, redeemable at the option of the Company at their paid-in amount or the fair value of the consideration received, plus declared and unpaid dividends.
- Class C preferred shares, voting, non-participating, without par value, ranking in priority to Class D preferred shares and Class A and B common shares, with entitlement to dividends as declared by the Board ofDirectors, redeemable at the option ofthe Company or the holder at their paid-in amount or the fair value of the consideration received, plus declared and unpaid dividends.
- Class D preferred shares, non-voting, non-participating, without par value, ranking in priority to Class A and B common shares, with entitlement to dividends as declared by the Board of
{16}------------------------------------------------
Directors, redeemable at the option ofthe Company or the holder at their paid-in amount or the fair value ofthe consideration received, plus declared and unpaid dividends.
Issued and fully paid:
| | 2025
\$ | 2024
\$ |
|----------------------------------------------|------------|------------|
| 22,500,000
Class
C preferred
shares | 22,500,000 | 22,500,000 |
| 2,500,000
Class
D preferred
shares | 2,500,000 | 2,500,000 |
| Total
preferred shares | 25,000,000 | 25,000,000 |
| 5,000,000
Class
A common
shares | 5,000,000 | 5,000,000 |
| | 30,000,000 | 30,000,000 |
## **11 Commissions**
| | | 2025 | 2024 |
|--------------------------------------------------|-------|------------|-----------------------|
| | Notes | \$ | \$ |
| --
--
--
--
Brokerage
commissions | 16 | 11,113,497 | 9,156,377 |
| Foreign
exchange market | 16 | 1,720,990 | --
--
1,275,341 |
| Commodities | 16 | 225,385 | 750,612 |
| | | 13,059,872 | 11,182,330 |
## **12 Other Income**
| | Notes | 2025
\$ | 2024
\$ |
|------------------------------|-------|------------|------------|
| | | | |
| FCM minimum fee | 16 | 491,263 | 1,966,408 |
| affiliates
Services
to | 16 | 710,925 | 499,827 |
| Custody
fees | 16 | | 120,663 |
| Other
revenues | | 46,634 | (42,802) |
| | | 1,248,822 | 2,544,096 |
(9)
{17}------------------------------------------------
## **13 Operating expenses**
| | | 2025 | 2024 |
|-------------------------------------------------------------|-------|-----------|-----------|
| | Notes | \$ | \$ |
| exchange and related
Stock
expenses | | 2,829,344 | 2,282,505 |
| reallowances
Commission | | 710,222 | 651,711 |
| -
--
---
Information
services and subscriptions | | 2,731,048 | 3,006,891 |
| Membership
fees | | 145,592 | 159,587 |
| maintenance
Licences and software | | 32,054 | 26,482 |
| exchange
(Gain)
loss on foreign | | (11,788) | 44,638 |
| affiliates
Services from | 16 | 1,101,018 | 1,441,061 |
| | | 7,537,490 | 7,612,875 |
## **14 General and administrative expenses**
| | | 2025 | 2024 |
|----------------------------------------|-------|-----------|-----------|
| | Notes | \$ | \$ |
| Management
fees | | 1,087,495 | 1,190,811 |
| Professional
and other
fees
- | | 1,859,945 | 2,751,819 |
| --
-
General office
expenses | | 19,331 | 43,355 |
| Services from affiliates | 16 | 123,525 | 120,596 |
| and entertainment
Travel, meals | | 8,715 | |
| | | 3,099,011 | 4,106,581 |
{18}------------------------------------------------
## **15 Current income taxes**
Rate reconciliation: Statutory to effective tax rate
| | 2025
\$ | 2024
\$ |
|--------------------------------------------------------------------------------|-----------------------|------------|
| | | |
| --
-
-
tax
Net
income
before
income | --
--
1,150,895 | 797,765 |
| resulting
Income
tax
expense
from: | | |
| -
--
statutory
rate
tax
Canadian
federal
15% (2024 - 15%) | 172,634 | 119,665 |
| 11.5% (2024 - 11.5%)
tax
Provincial income | 132,353 | 91,743 |
| es
Non-deductible
expens | 172,250 | |
| Other | (2,829) | 4,610 |
| Income tax expense | 474,408 | 216,018 |
| cash payments
Net
for income taxes | 346,038 | 331,687 |
## **16 Related party transactions and balances**
All transactions and balances with related parties are with entities under common ownership. The statements offinancial condition includes the following related party balances:
| | 2025
\$ | 2024
\$ |
|-----------------------------------------------|------------|------------|
| | | |
| Assets | | |
| equivalents
Cash
and cash | 658,953 | 716,580 |
| Account
receivable | 1,003,296 | 904 ,675 |
| Liabilities | | |
| Accounts
charges
and accrued
payable | 250,044 | 474,079 |
| correspondents
Due to | | 167,649 |
{19}------------------------------------------------
The statements of operations and comprehensive income includes the following related party balances:
| | 2025
\$ | 2024
\$ |
|------------------------------------------------------|------------|------------|
| | | |
| Revenues | | |
| Commissions | | |
| and foreign exchange market
Brokerage commissions | 7,258,091 | 6,004,825 |
| Commodities | 225,385 | 706,926 |
| Other
income | 1,202,188 | 2,586,898 |
| Interest
income | 1,167 | 8,424 |
| Expenses | | |
| Personnel expenses | 3,682,483 | 3,667,865 |
| General and administrative
expenses | 1,196,737 | 1,226,359 |
| Operating
expenses | 1,814,575 | 2,023,876 |
| Interest | 25 | 88,101 |
The Company clears its North American equity trades through Pictet Canada L.P. and its European and international (with few exceptions) equity trades through BPSA. Commissions are collected by Pictet Canada L.P. and BPSA at the settlement date and are remitted to the Company.
During the years ended December 31, 2025 and 2024, the Company paid clearing fees to Pictet Canada L.P. These are included in operating expenses. Similarly, the Company paid trade execution fees to Pictet Canada L.P. and BPSA.
The Company has entered into a service level agreement with Pictet Canada L.P. Under the terms of this agreement, the Company earns commissions for execution services rendered to Pictet Canada L.P.'s clients on US equities, options and fixed income.
The Company has entered into an expense sharing agreement with Pictet Canada L.P. for administrative and accounting services. Under the terms of this agreement, the Company reimburses a portion of personnel and general administrative services to Pictet Canada L.P.
The Company has entered into a service level agreement with BPSA whereby it collects a minimum annual fee for the services it provides as a FCM. The fees collected in 2025 under this agreement relate to the early termination of third-party contracts following the discontinuation of FCM membership in late 2024.
{20}------------------------------------------------
The Company has entered into a service agreement with Pictet & Cie Group SCA. Under the terms of this agreement, the Company is invoiced for various services provided by Pictet & Cie Group SCA. The amount paid is included in general and administrative expenses.
Unless otherwise disclosed, all related party transactions occurred in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties and the Company.
Effective January 1, 2023, the Pictet Group adopted a transfer pricing model for its intra-group services. Under the new transfer pricing model, the Company is allocated various costs by affiliates based on services it receives from affiliates. Likewise, the Company earns income for services it provides to affiliates.
Services in scope ofthe transfer pricing model are divided into two categories:
- Internal products, which are services related to corporate functions, IT, logistics, operations and specific lines ofservices; and
- Client services, which are services provided to serve external clients' needs related to administration, custody and operations.
## 17 **Financial instruments and risk management**
#### **Fair value**
The Company has estimated the fair market values of its financial instruments based on the current interest rate environment, related market values and current pricing of financial instruments with comparable terms. The carrying values of its financial instruments approximate their fair market values, unless otherwise indicated.
#### **Credit risk**
Credit risk is the risk ofloss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk arises from its cash and cash equivalents, short term deposits, Treasury Bills, accounts receivable, derivative financial assets, due from customers and due from correspondents. The maximum exposure of the Company to credit risk before taking into account any collateral held or other credit enhancements is the carrying amount ofthe receivables.
{21}------------------------------------------------
| | 2025 | 2024 |
|----------------------------------------------------------------------------|-----------------------|-----------------|
| | \$ | \$ |
| Cash and cash equivalents | --
--
2,673,398 | 4,571,539 |
| me
assets
at
Financial
through
net
fair
value
inco | --
24,109,643 | 23,122,500
- |
| Short-term
deposits | 16,300,000 | 14,500,000 |
| Accounts
receivable | -
--
1,110,717 | 1,066,803 |
| Derivative
assets
financial | 416,452 | 268,204 |
| Due from customers | | 167,649 |
| | 44,610,210 | 43,696,695 |
The Company's financial instruments are generally with other major financial institutions which have a Prime-1 or higher credit rating from Moody's. Consequently, management considers the risk of counterparties defaulting on their obligations to be low.
As of December 31, 2025 and 2024, there were no amount of receivables in default.
The Company's exposure to credit risk is negligible on principal trades as the Company acts as a riskless principal and does not take a position in the security but rather enters into back-to-back principal trade between itself, its counterparty and its client.
#### **Liquidity risk**
Liquidity risk is the risk that the Company will be unable to meet a demand for cash or fund its obligations as they come due. The Company's management is responsible for reviewing liquidity resources to ensure that funds are readily available to meet its financial obligations as they come due, as well as ensuring that they are held with a Canadian chartered bank and have maturities of up to 12 months. The Company manages its treasury on a monthly basis. Any excess cash after taking into account planned operational expenses is invested in short-term deposits or in Treasury Bills for a period of up to 12 months.
#### **Market risk**
Market risk is the risk that the fair value of financial instruments will fluctuate because of changes in market prices. The Company separates market risk into three categories: fair value risk, interest rate risk and currency risk.
{22}------------------------------------------------
#### **Fair value risk**
The Company's exposure to fair value risk is negligible as it does not engage in proprietary trading. All ofits investments are in short-term deposits or in Treasury Bills held with a Canadian chartered bank with maturities ofup to 12 months and with BPSA in derivative financial instruments with maturities of up to 12 months.
The following table shows an analysis of financial instruments recorded at fair value as of December 31, 2025, by fair value hierarchy level:
| | | | 2025 |
|------------|---------|---------|-------------------------|
| Level 1 | Level 2 | Level 3 | Total |
| \$ | \$ | \$ | \$ |
| | | | |
| 24,109,643 | | | 24,109,643 |
| | 416,452 | | --
-
-
416,452 |
| | | | |
There were no movements between Levels 1, 2 and 3 during the year ended December 31, 2025.
The following table shows an analysis of financial instruments recorded at fair value as of December 31, 2024, by fair value hierarchy level:
| | | | | 2024 |
|---------------------------------|------------|---------|---------|------------|
| | Level 1 | Level 2 | Level 3 | Total |
| | \$ | \$ | \$ | \$ |
| Financial instrument | | | | |
| at
Financial assets
FVTNI | 23,122,500 | | | 23,122,500 |
| Derivative
financial assets | | 268,204 | | 268,204 |
There were no movements between Levels1, 2 and 3 during the year ended December 31, 2024.
#### **Interest rate risk**
Interest rate risk arises from the possibility that changes in interest rates will affect the fair value or future cash flows offinancial instruments held by the Company. The Company does not incur interest rate risk on its term deposit investment recorded at amortized cost, since they all have a maturity of less than one month.
{23}------------------------------------------------
#### **Currency risk**
Currency risk arises from the possibility that changes in the price of foreign currencies will result in losses.
The significant balances in foreign currencies expressed in equivalent US dollars as of December 31, 2025 are as follows:
| | | | 2025 |
|-----------------------------------------|---------------|--------------|-----------|
| | EUR | CAD | Other |
| Cash and cash equivalents | ---
61,610 | --
52,886 | 628,966 |
| Accounts
receivable | | 72,788 | 33,487 |
| Derivative
financial assets | 97,515 | 818 | 80,704 |
| Accounts
payable and accrued charges | | (86,452) | (250,044) |
| | 159,125 | 40,040 | 493,113 |
The significant balances in foreign currencies expressed in equivalent US dollars as of December 31, 2024 are as follows:
| | | | 2024 |
|-----------------------------------------|--------|-----------|-----------|
| | EUR | CAD | Other |
| Cash and cash equivalents | 401 | 170,419 | 491,075 |
| Accounts
receivable | 23 | 101,322 | 2,271 |
| Derivative
financial assets | 76,317 | 229 | 31,612 |
| Due from customers | | 8,299 | |
| Due to correspondents | | (8,299) | |
| Accounts
payable and accrued charges | | (529,783) | (468,584) |
| | 76,741 | (257,813) | 56,374 |
Based on the above net exposures as of December 31, 2025 and 2024, and assuming that all other variables remain constant, a 5% appreciation or depreciation ofthe US dollar against the Euro would result in a decrease or increase of \$7,555 (2024 - \$3,837) respectively in net income. A 5% appreciation or depreciation of the US dollar against the Canadian dollar would result in a decrease or increase of \$2,002 (2024 - \$12,891), respectively, in net income. A 5% appreciation or depreciation ofthe US dollar against all other currencies would result in a decrease or increase of \$25,057 (2024- \$2,819), respectively, in net income.
{24}------------------------------------------------
## **18 Capital management**
The Company's capital comprises capital stock and retained earnings.
As a member ofFINRA and the NFA, the Company is subject to minimum net capital requirements of both regulators, which are as follows:
The Company must maintain a minimum net capital equal to the greater of:
- a) \$250,000;
- b) 8% ofthe amount of customers' risk maintenance margin; and
- c) 62/3% ofthe Company's aggregate indebtedness (AI).
It is also required that the Company's AI not exceed 1,500% of "net capital".
The Company's management monitors the capital ofthe Company to ensure that it has adequate funds to support business strategies and operational growth. In order to maintain or adjust the capital structure, the Company may issue additional shares or pay out dividends. On a daily basis, the Company computes and monitors its excess net capital and compares the current balance to the projected capital and prior days' amounts.
In its capacity as broker-dealer, the Company does not hold customer funds; however, if inadvertently received, the Company promptly forwards all funds and securities received. Accordingly, the Company is exempt from the SEA (Security Exchange Act 0f 1934) Rule 15c 3-3, under subparagraph (k)(2)(i) of that Rule.
In its capacity as an introducing broker (IB), the Company acts as an intermediary for its customers' derivative transactions and does not hold customer funds or securities.
In 2025, the Company continued with its 2024 strategy, which was to maintain its excess net capital at an adequate level for its operations. As ofDecember 31, 2025, the Company's net capital and minimum net capital requirement were \$41,578,508 and \$250,000, respectively (2024- \$40,875,170 and \$1,000,000, respectively), resulting in an excess net capital of \$41,328,508 (2024- \$39,875,170).
The firm is planning to return the total amount of \$30,000,000 to the parent company as of March 13, 2026. This capital decrease will consist of the repurchase and cancellation of all Class C and Class D preferred shares for \$25,000,000, and the distribution of a dividend of \$5,000,000. This capital reduction is the result of management's reassessment of future anticipated net capital requirement following the termination of the FCM membership in late 2024.
{25}------------------------------------------------
## **19 Commitments and contingencies**
The Company accrues loss contingencies ifit is probable that a loss would result from the contingency and the amount of the loss can be reasonably estimated. If it is reasonably possible that a loss contingency would occur, the Company would disclose the contingency. As of December 31, 2025 and 2024, no provisions for contingencies were accrued.
{26}------------------------------------------------
## PICTET OVERSEAS INC. STATEMENTS OF COMPUTATION OF NET CAPITAL AND COMPUTATION OF AGGREGATED INDEBTEDNESS - SCHEDULE I AS AT DECEMBER 31, 2025 AND 2024
| | 2025 | 2024 |
|-----------------------------------------------------------------|------------|---------------------|
| (expressed in U.S. dollars) | \$ | \$ |
| Computation
of net capital | | |
| Capital
stock | | |
| -
--
Retained
earnings | 30,000,000 | 30,000,000 |
| -
ownership equity
Total | 14,738,551 | 14,062,064 |
| Total capital and allowable subordinated
liabilities | 44,738,551 | 44,062,064 |
| | 44,738,551 | 44,062,064 |
| --
-
Deductions and/or
charges | | |
| Cash and cash equivalent | 19,953 | ---
132,580 |
| Accounts
receivable | 1,077,229 | -
-
1,001,281 |
| Prepaid
expenses | 1,603,224 | 1,645,885 |
| Income taxes
receivable | | 117,687 |
| Derivative
financial assets | 416,452 | 268,204 |
| Total non-allowable assets | 3,116,858 | 3,165,637 |
| on securities
positions
capital
before haircuts
Net | 41,621,693 | -----
40,896,427 |
| on foreign currency cash positions
Haircut | 43,185 | 21,257 |
| Capital
Net | 41,578,508 | 40,875,170 |
| capital
Net
Minimum
required | 250,000 | 1,000,000 |
| Excess Net Capital | 41,328,508 | 39,875,170 |
| Computation
of aggregate
indebtedness | | |
| Aggregate
Indebtedness | | |
| Accounts
payable and accrued charges | 1,343,921 | 1,230,554 |
| correspondents
Due to | | 167,649 |
| Income taxes
payable | 130,962 | |
| Total Aggregate Indebtedness | 1,474,882 | 1,398,203 |
| Ratio
of Aggregate
Indebtedness to Net Capital | 3.55% | 3.42% |
## **Statement pursuant to paragraph d(4) ofRule 17a-5**
There were no material differences between the computation of net capital included in this report and the corresponding schedule included in the Company's unaudited December 31, 2025 FOCUS Report as filed on January 27, 2026.
{27}------------------------------------------------
Pictet Overseas Inc. 1000. de la Gauchetière West, Suite 3100 Montréal, Québec H3B 4W5
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.