# PERSHING ADVISOR SOLUTIONS LLC X-17A-5 (2022-02-25) — Broker-dealer annual report - Company: PERSHING ADVISOR SOLUTIONS LLC - Form: X-17A-5 - Filed: 2022-02-25 - Period: 2021-12-31 - Accession: 0000926544-22-000001 - CIK: 926544 - File #: 8-47425 - Type: Broker-dealer - Material weakness: No - Auditor: KPMG - Auditor location: New York, NY - Contact: Frank Mutterer - Phone: 201-413-4337 - Signed by: James T. Crowley/Gerard Mulligan (Chief Executive Officer/Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/926544/000092654422000001/PAS2021Public.pdf --- {0}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Statement of Financial Condition December 31, 2021 (With Report of Independent Registered Public Accounting Firm) {1}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Statement of Financial Condition December 31, 2021 #### **Table of Contents** | | Page | |---------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm | | | Statement of Financial Condition | 1 | | Notes to Statement of Financial Condition | 2 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) KPMG LLP 345 Park Avenue New York, NY 10154-0102 # **Report of Independent Registered Public Accounting Firm** To the Member and the Board of Managers Pershing Advisor Solutions LLC: # *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Pershing Advisor Solutions LLC (the Company) as of December 31, 2021, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2021, 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 this 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 presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. PM *LLP* We have served as the Company's auditor since 2007. New York, New York February 25, 2022 {3}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Statement of Financial Condition December 31, 2021 (Dollars in thousands) | Assets | | |--------------------------------------------------------------|--------------| | Cash and cash equivalents | \$
251 | | Due from affiliated clearing broker | 48,865 | | Fees and other receivables | 6,093 | | Due from affiliates | 3,661 | | Intangible assets | 156 | | Financial instruments owned, at fair value | 133 | | Other assets | 16,520 | | Total assets | \$
75,679 | | Liabilities and Member's Equity | | | Liabilities: | | | Accrued compensation payable | \$
10,329 | | Due to affiliates | 5,090 | | Financial instruments sold, not yet purchased, at fair value | 13 | | Accrued expenses and other | 2,604 | | | 18,036 | | | | | Member's equity: | | | Member's contributions | 85,230 | | Accumulated deficit | (27,587) | | Total member's equity | 57,643 | | Total liabilities and member's equity | \$
75,679 | See accompanying notes to statement of financial condition. {4}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 ### **(1) Organization and Description of Business** Pershing Advisor Solutions LLC (the Company) is a single member Delaware Limited Liability Company and a wholly owned subsidiary of Pershing Advisor Solutions Holdings LLC (PAS Holdings), which is a wholly owned subsidiary of Pershing Group LLC (the Parent). The Parent is a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). The Company is a registered broker-dealer with the Securities & Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and Securities Investment Protection Corporation (SIPC) that provides financial business and technology outsourcing solutions primarily to independent, fee-based SEC Registered Investment Advisors (RIA), Family Offices, Turnkey Asset Management Providers (TAMP), and dually-registered advisors working in conjunction with many of Pershing LLC (Pershing) brokerdealer customers. # **(2) Summary of Significant Accounting Policies** The Company's statement of financial condition is prepared in accordance with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect amounts reported in the statement of financial condition and accompanying footnotes. Management believes that the estimates utilized in the statement of financial condition are reasonable. Actual results could differ from these estimates. Market conditions could increase the risk and complexity of the judgments in these estimates. # *(a) Cash and Cash Equivalents* The Company defines cash and cash equivalents as highly liquid investments with original maturities of three months or less. At December 31, 2021, the Company had \$251 thousand in cash. ## *(b) Revenue Recognition* The Company's clients are billed based on fee schedules that are agreed upon in each customer contract. Receivables from customers were \$6.1 million at December 31, 2021 and are included in fees and other receivables on the statement of financial condition. An allowance is maintained for accounts receivables which is generally based on the number of days outstanding. The Company has adopted *ASU 2016-13, Financial Instruments – Credit Losses* ("CECL"). Under CECL, a provision of \$327 was recorded as of December 31, 2021. Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time. The Company did not record any contract assets as of December 31, 2021. Contract liabilities represent payments received in advance of providing services under certain contracts. The Company did not record any contract liabilities as of December 31, 2021. {5}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 Changes in contract assets and liabilities primarily relate to either party's performance under the contracts. # *(c) Principal Transactions* ASC Topic 820 applies to all financial instruments that are being measured and reported on a fair value basis. This includes those items currently reported in financial instruments owned, at fair value and financial instruments sold, not yet purchased, at fair value on the statement of financial condition. As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market and income approaches. Based on these approaches, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial instrument assets and liabilities carried at fair value have been classified and disclosed in one of the following three categories: Level 1 Quoted market prices in active markets for identical assets or liabilities. Level 2 Observable market based inputs or unobservable inputs that are derived from or corroborated by market data. Level 3 Unobservable inputs that are not corroborated by market data. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as listed equities. Level 2 includes those financial instruments that are valued using models or other valuation methodologies calibrated to observable market inputs. These models are primarily industry-standard models that consider various assumptions, including discount margins, credit spreads, discounted anticipated cash flows, the terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price of publicly traded securities with similar duration and yield, time value, yield curve, default rates, as well as other measurements. In order to be classified as Level 2, substantially all of these assumptions would need to be observable in the marketplace and can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace. Level 3 comprises financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are unobservable from objective sources. The Company did not have any assets or liabilities classified as Level 3 at December 31, 2021. {6}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 In determining the appropriate levels, the Company performed an analysis of the assets and liabilities that are subject to ASC Topic 820. The following table presents the financial instruments carried at fair value as of December 31, 2021 (dollars in thousands): | | | Assets at fair value as of December 31, 2021 | | | | |--------------------------------------------------------------|---------------------------------------------------|----------------------------------------------|---------|---------|-------| | | | Level 1 | Level 2 | Level 3 | Total | | Financial instruments owned, at fair value | | | | | | | Equity instruments | \$ | 19 | — | — | 19 | | Municipal instruments | | — | 114 | — | 114 | | Total assets at | | | | | | | fair value | \$ | 19 | 114 | — | 133 | | | Liabilities at fair value as of December 31, 2021 | | | | | | | | Level 1 | Level 2 | Level 3 | Total | | Financial instruments sold, not yet purchased, at fair value | | | | | | | Equity instruments | \$ | 13 | — | — | 13 | | Total liabilities at | | | | | | | fair value | \$ | 13 | — | — | 13 | | | | | | | | At December 31, 2021, the Company had \$19 thousand of Level 1 assets and \$114 thousand of Level 2 assets, which are included in financial instruments owned, at fair value on the statement of financial condition. In addition, there was \$13 thousand of Level 1 liabilities, which are included in financial instruments sold, not yet purchased, at fair value on the statement of financial condition. #### *(d) Fixed Assets and Intangible Assets* Fixed assets are recorded at cost, net of accumulated depreciation. Depreciation is recorded on a straight-line basis over the useful lives of the related assets, generally two to five years. Leasehold improvements are amortized on a straight-line basis over the lesser of the term of the lease or 10 years. For internal-use computer software, the Company capitalizes qualifying costs incurred during the application development stage. The resulting asset is amortized using the straight-line method over the expected life, which is generally five years. All other non-qualifying costs incurred in connection with any internal-use software projects are expensed as incurred. Identifiable intangible assets are stated at cost and amortized on a straight line basis over their estimated useful lives, which is 15 years from the date of acquisition and are assessed for indicators of impairment pursuant to the provision of ASC Topic 350, *Intangibles – Goodwill and Other* and ASC Topic 360, *Property, Plant and Equipment*. {7}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 #### *(e) Restricted Stock Units* During the year, BNY Mellon issued restricted stock to employees, including certain Company employees. The Company accounts for its plan in accordance with ASC Topic 718, *Compensation – Stock Compensation*, and accordingly compensation cost is measured at the grant date based on the value of the award and is recognized over the vesting period**.** As of December 31, 2021, \$3.4 million of total unrecognized compensation cost related to nonvested restricted stock is expected to be recognized over a weighted average period of approximately zero to four years. #### *(f) Income Taxes* The Company is included in the consolidated federal and combined state and local income returns filed by BNY Mellon. In addition, the Company files stand-alone tax returns in certain jurisdictions including Pennsylvania. Income taxes are calculated using the modified separate return method, and the amount of current tax expense or benefit is either remitted to or received from BNY Mellon, pursuant to a tax sharing agreement between BNY Mellon and the Company. The Company accounts for income taxes in accordance with ASC Topic 740, *Income Taxes*, which generally requires the recognition of tax benefits or expenses on the temporary differences between the financial reporting and the tax basis of assets and liabilities. If appropriate, deferred tax assets are adjusted by a valuation allowance, which reflects expectations of the extent to which such assets are more likely than not to be realized. In accordance with ASC Topic 740, *Income Taxes*, the Company uses a two-step approach in recognizing and measuring its uncertain tax benefits whereby it is first determined if the tax position is more likely than not to be sustained under examination. If the tax position meets the more likely than not threshold, the position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. A tax position that fails to meet the more likely than not recognition threshold will result in either a reduction of current or deferred tax assets, and/or recording of current or deferred tax liabilities. #### *(g) Leases* We determine if an arrangement is a lease at inception. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments. The ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. For all leases, we use a rate that represents a collateralized incremental borrowing rate based on similar terms and information available at commencement date of the lease in determining the present value of lease payments. In addition to the lease payments, the determination of an ROU asset may also include certain adjustments related to lease incentives and initial direct costs incurred. Options to extend or {8}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 terminate a lease are included in the determination of the ROU asset and lease liability only when it is reasonably certain that we will exercise that option. For all leases, we have elected to account for the contractual lease and non-lease components as a single lease component and include in the calculation of the lease liability. #### **(3) Clearing Arrangements** Pursuant to agreements between the Company and its correspondent clearing broker, Pershing, securities transactions effected by the Company are introduced and cleared on a fully disclosed basis. Due from affiliated clearing broker primarily represents net cash balances held at Pershing. At December 31, 2021, this balance was \$48.9 million, which is included as due from affiliated clearing broker on the statement of financial condition. #### **(4) Related Party Transactions** At December 31, 2021, the Company had a payable of \$284 thousand relating to royalties, which is included in due to affiliates on the statement of financial condition. The Company also had a payable of \$587 thousand to an affiliate for payroll services, as well as, payables to affiliates of \$276 thousand relating to certain administrative support and marketing services, primarily from financial system support, human resources, accounts payable and corporate communications, which are included in due to affiliates on the statement of financial condition. The Company had a receivable of \$103 thousand from an affiliate for payroll services, which is included in due from affiliates on the statement of financial condition. The Company also had receivables from affiliates totaling \$49 thousand relating to certain administrative support, communications, and marketing services, which is included in due from affiliates on the statement of financial condition. At December 31, 2021, the Company had a receivable of \$924 thousand relating to interest revenue, which is included in due from affiliates on the statement of financial condition. In addition, the Company had a receivable of \$1.338 million relating to other brokerage services revenue and \$1.247 million relating to managed investment services revenue, which are included in due from affiliates on the statement of financial condition. The Company also maintains a cash account with an affiliate to fund its day-to-day operations, and \$251 thousand was held in the operating cash account at December 31, 2021. #### **(5) Fixed Assets** Fixed assets consist of furniture and office equipment, computer equipment and software, leasehold improvements and communications equipment. At December 31, 2021, fixed assets amounted to \$7 million net of accumulated depreciation of \$6.6 million, and are included in other assets on the statement of financial condition. {9}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 #### **(6) Intangible Assets** Intangible assets include certain registered investment advisor contractual arrangements which are amortized over a 15 year useful life. At December 31, 2021, intangible assets amounted to \$156 thousand net of accumulated amortization of \$28 million. ### **(7) Net Capital Requirements** As a registered broker-dealer, the Company is subject to the Uniform Net Capital Rule under Rule 15c3-l of the Securities Exchange Act of 1934. The Company has elected to use the alternative method of computing regulatory net capital requirements provided for in Rule 15c3-l. Under the alternative method the Company is required to maintain a minimum net capital of \$250 thousand. At December 31, 2021, the Company's net capital of \$31 million was in excess of the minimum requirement by approximately \$30.8 million. #### **(8) Leases** The Company has a non-cancelable lease for office space expiring in December 2022. At December 31, 2021 the ROU Asset was \$154 thousand, which is included in other assets on the statement of financial condition, and Lease Liability was \$170 thousand, which is included in accrued expenses and other on the statement of financial condition. The remaining weighted average lease term is 12 months and the weighted average incremental borrowing rate used for the lease was 0.44%. At December 31, 2021, there were no lease liabilities on operating leases prior to adopting ASU 2016-02, *Leases*. At December 31, 2021, the maturity of lease liability after adopting ASU 2016-02, *Leases* was \$171 thousand for 2022. #### **(9) Commitments and Contingencies** The Company applies the provisions of ASC Topic 460, *Guarantees*, which provides accounting and disclosure requirements for certain guarantees. The Company has agreed to indemnify Pershing, the clearing broker, for losses that it may sustain from the customer accounts introduced by the Company. At December 31, 2021, the total amount of customer balances maintained by Pershing and subject to such indemnification was approximately \$2,958 million. In accordance with applicable margin lending practices, customer balances are collateralized by customer securities or supported by other types of customer recourse provisions. From time to time, the Company is involved in various legal proceedings arising in connection with the conduct of the Company's business. There are no legal proceedings pending that would have a material adverse effect on the Company's financial condition if the plaintiffs were to prevail. #### **(10) Income Taxes** The deferred income taxes reflect the tax effects of temporary differences between the financial reporting and tax bases of asset and liabilities. The Company has a gross deferred tax asset of \$1.1 million and a gross deferred tax liability of \$1.6 million at December 31, 2021. The deferred tax asset is primarily attributable to stock compensation. The deferred tax liability is attributable to depreciation. The net {10}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 deferred tax liability is \$0.7 million, which includes \$0.2 million of a valuation allowance related to separate company net operating losses, as discussed below. The Company has apportioned state net operating loss carryforwards of approximately \$4.9 million, which will begin to expire in 2023. The related deferred tax asset has been reduced by a valuation allowance equal to \$0.2 million, as management believes it is more likely than not the benefit of the net operated losses will not be realized. Federal taxes payable of \$3.4 million and state taxes payable of \$0.6 million are included in due to affiliates on the statement of financial condition. State taxes receivable of \$47 thousand is included in other assets on the statement of financial condition. BNY Mellon's federal consolidated income tax returns are closed to examination through 2016. The Company's New York State income tax returns are closed to examination through 2014 and the New York City income tax returns are closed to examination through 2012. The Company's New Jersey returns are closed to examination through 2016. # **(11) Fair Value Information** At December 31, 2021, the Company's assets and liabilities are recorded at either fair value or at amounts which approximate their fair value. The fair values of such items are not materially sensitive to shifts in market interest rates because of the limited term to maturity or variable rate of these instruments. # **(12) Employee Benefit Plans** BNY Mellon sponsors a 401(k) plan (the Plan) for its active employees. The Plan offers the Company's employees the opportunity to plan, save and invest for their future financial needs. The Company makes periodic contributions to the Plan based on the discretion of management and relevant IRS rules. #### **(13) Financial Support** The Company has an agreement with the Parent, whereby the Parent has committed to provide financial support to the Company in an amount sufficient to satisfy its obligations when due and fund its operations as needed, until at least January 1, 2023. ### **(14) Impact of Coronavirus Pandemic on Our Business** The coronavirus pandemic has had a significant effect on the global macroeconomic environment. Since March 2020, the vast majority of our employees have worked from home. They have been fully operational with minimal disruption to servicing our clients. Market volatility associated with the performance of global equity and fixed income markets and lower interest rates has had, and may continue to have, an impact on our business. Given the decrease in short-term interest rates, there was a significant increase in money market mutual fund fees that were waived, which reduced fee revenue. It is difficult to forecast the impact of the {11}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Notes to Statement of Financial Condition December 31, 2021 coronavirus, together with related public health measures, on our results with certainty because so much depends on how the health crisis evolves, its impact on the global economy as well as actions taken by central banks and governments to support the economy and the availability, use and effectiveness of vaccines. ### **(15) Subsequent Events** The Company has evaluated subsequent events from December 31, 2021 through February 25, 2022, the date that the accompanying statement of financial condition is available to be issued. {12}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Exemption Report December 31, 2021 (With Report of Independent Registered Public Accounting Firm) {13}------------------------------------------------ ![](_page_13_Picture_0.jpeg) One Pershing Plaza Jersey City, NJ 07399 pershing.com # **Pershing Advisor Solutions LLC Exemption Report** **Pershing Advisor Solutions LLC** (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d) (1) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3 *(*k*)*: (2) ii (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3 (k) (2) ii throughout the period January 1, 2021 to December 31, 2021 without exception. Pershing Advisor Solutions LLC I, Gerard F. Mulligan, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. By: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ *Gerard T /Mulligan* Title: Chief Financial Officer **February 25, 2022** Brokerage custody provided by Pershing LLC, member FINRA, NYSE, SIPC, a BNY Mellon company. Brokerage services may be provided by Pershing Advisor Solutions LLC, member FINRA, SIPC. Bank custody provided by BNY Mellon, N.A, member FDIC. Affiliated advisory services, if offered, provided by Lockwood Advisors, Inc., an investment adviser registered in the United States under the Investment Advisers Act of 1940. Technology services may be provided by Albridge Solutions, Inc. {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) KPMG LLP 345 Park Avenue New York, NY 10154-0102 # **Report of Independent Registered Public Accounting Firm** The Board of Managers Pershing Advisor Solutions LLC: We have reviewed management's statements, included in the accompanying Pershing Advisor Solutions LLC Exemption Report (the Exemption Report), in which (1) Pershing Advisor Solutions LLC (the Company) identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3(k)(2)(ii) (the exemption provisions); and (2) the Company stated that it met the identified exemption provisions throughout the year ended December 31, 2021 without exception. The Company's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. ![](_page_14_Picture_7.jpeg) New York, New York February 25, 2022 {15}------------------------------------------------ (An Indirect Wholly Owned Subsidiary of The Bank of New York Mellon Corporation) Securities Investor Protection Corporation (SIPC) Form SIPC-7 December 31, 2021 (With Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon Procedures Thereon) {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) KPMG LLP 345 Park Avenue New York, NY 10154-0102 # **Report of Independent Registered Public Accounting Firm** The Board of Managers Pershing Advisor Solutions LLC: In accordance with Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and with the Securities Investor Protection Corporation (SIPC) Series 600 Rules, we have performed the procedures enumerated below with respect to the accompanying General Assessment Reconciliation (Form SIPC-7) of Pershing Advisor Solutions LLC (the Company) for the year ended December 31, 2021. The Company's management is responsible for its Form SIPC-7 and its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and the SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2021. Additionally, the SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. No other parties have agreed to or acknowledged the appropriateness of these procedures for the intended purpose or any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures for the intended purpose is solely the responsibility of those parties specified in this report and we make no representation regarding the sufficiency of the procedures described below either for the intended purpose or for any other purpose. The procedures and the associated findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, and noted no differences; - 2. Compared the Total Revenue amount reported on the Annual Audited Form X-17A-5 Part III for the year ended December 31, 2021, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2021, and noted no difference; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, and noted no differences; - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related supporting schedules and working papers supporting the adjustments, and noted no differences. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to, and did not, conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2021. {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. KP( LLP This report is intended solely for the information and use of the Company and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. ![](_page_17_Picture_4.jpeg) New York, New York February 25, 2022 {18}------------------------------------------------ Schedule of General Assessment Reconciliation for the Year Ended December 31, 2021 | Total revenue | \$
109,665,750 | |----------------------------------------------------------------|-------------------| | Additions | | | Interest and dividend expense | 1,787,390 | | Total additions | 1,787,390 | | Deductions: | | | Commissions, floor brokerage, and clearance paid to other SIPC | | | members in connection with securities transactions | 44,002,633 | | Total interest and dividend expense | 1,787,390 | | Total deductions | 45,790,023 | | SIPC Net Operating Revenues | 65,663,117 | | General Assessment @ .0015 | 98,495 | | Less payment made with SIPC-6 filed (exclude interest) | 39,174 | | Less prior overpayment applied | - | | Assessment balance due or (overpayment) | 59,321 | | | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.