# CORRELL CO. INVESTMENT SERVICES CORP. X-17A-5 (2023-02-28) — Broker-dealer annual report - Company: CORRELL CO. INVESTMENT SERVICES CORP. - Form: X-17A-5 - Filed: 2023-02-28 - Period: 2022-12-31 - Accession: 0000949247-23-000002 - CIK: 949247 - File #: 8-48507 - Type: Broker-dealer - Material weakness: No - Auditor: RYAN & JURASKA - Auditor location: CHICAGO, IL - Contact: M NICOLE CORRELL - Phone: 7085992900 - Email: ncorrell@cciscinvestments.com - Website: cciscinvestments.com - Signed by: JAMES C CORRELL (PRESIDENT) Original filing: https://www.sec.gov/Archives/edgar/data/949247/000094924723000002/PUBLIC11.pdf --- {0}------------------------------------------------ # Correll Co. Investment Services Corp. Financial Statement Pursuant to SEC Rule 17a-5(d) December 31, 2022 ## AVAILABLE FOR PUBLIC INSPECTION {1}------------------------------------------------ #### **OATH OR AFFIRMATION J** | es
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so | | DEBRA J. LUCENTE OFFICIAL SEAL Notary Public - State of Illinois My Commission Expires Sep 16, 2024 **as th«-©\*-e\*eo9t®m«** J Notary Publi^, Signature: Title: President This filing\*\* contains (check all applicable boxes): i ! \_i - H (a) Statement of financial condition. ' - **B** (b) Notes to consolidated statement of financial condition. I J. - (c) Statement of income (loss) or,if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). -J "1 J - (d) Statement of cash flows. | J - (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - (f) Statement of changes in liabilities subordinated to claims of creditors. - (g) Notes to consolidated financial statements. - (h) Computation of net capital under 17 CFR 240.15c3-lor 17 CFR 240.18a-l, as applicable. - (i) Computation of tangible net worth under 17 CFR 240.18a-2. - (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. I I— - (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. » -\* - (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. I l - (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. n .ii I - (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. i i - (o) Reconciliations,including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l,17 CFR 240.18a-l,or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable,if material differences exist,or a statement that no material differences exist. J i i J j i - (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. J - **B** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5,17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. J J..1 j J- - (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. J j j- - (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. J i - **B** (t) Independent public accountant's report based on an examination of the statement of financial condition. J j - (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. i j -i J # i - (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. J **...i** J i i - (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. i i - (x) Supplemental reports on applying agreed-upon procedures,in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. J I i i - - (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit,or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). I i j j• J - (z) Other: *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.* i {2}------------------------------------------------ #### QMB APPROVAL **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** I I I OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 > SEC FILE NUMBER 8-48507 ## **ANNUAL REPORTS FORM X-17A-5 PART III** **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** I I **J ^ 1** | FILING FOR THE PERIOD BEGINNING
I | 01/01/2022
I | AND ENDING | 12/31/2022
MM/DD/YY | | | | | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|---------------------------------------------------|------------------------|-------------------------------|--|--|--|--|--| | | MM/DD/YY | | | | | | | | | | A.
REGISTRANT IDENTIFICATION | | | | | | | | | | | Correll
Co.
Investment
Services
Corp.
NAME OF FIRM: | | | | | | | | | | | boxes):
TYPE OF REGISTRANT (check all
applicable
0
Major
Broker-dealer
security-based
swap participant
Security-based
swap
dealer
I
I
Check here if respondent is also an OTC derivatives dealer | | | | | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS:
use a P.O.
(Do not
box
no.)
I
I
I I
I | | | | | | | | | | | 9655
S
78th
Avenue | | | | | | | | | | | (No. and
Street)
I | | | | | | | | | | | Hickory
Hills | | Illinois | | 60457 | | | | | | | (City) | (State) | | | (Zip Code) | | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING
I
I | | | | | | | | | | | M.
Nicole
Correll | (708) | 599-2900 | | ncorrell@cciscinvestments.com | | | | | | | (Name) | (Area Code -Telephone
I | Number) | (Email Address) | | | | | | | | B.
ACCOUNTANT IDENTIFICATION | | | | | | | | | | | filing*
reports
contained
in
this
INDEPENDENT PUBLIC ACCOUNTANT whose
are
I
Ryan
&
Juraska
LLP | | | | | | | | | | | -if
state last,first,and
individual,
(Name
middle name) | | | | | | | | | | | Jackson
Blvd,
Suite
2250
141
W | Chicago
I | | IL | 60604 | | | | | | | (Address) | (City)
I | | (State)
I | (Zip Code) | | | | | | | 03/24/2009 | | 3407 | | | | | | | | | (Date of Registration with PCAOB)(if applicable)
I
t
I | | (PCAOB Registration Number,if
applicable)
I | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(l)(ii),if applicable. I I I I. t . 1 I I **Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.** I J {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) **RYAN&JURASKALLP** Certified Public Accountants 141 West Jackson Boulevard Chicago, Illinois 60604 I \_ Tel: 312.922.0062 Fax: 312.922.0672 ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Stockholders of Correll Co. Investment Services Corp. #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Correll Co. Investment Services Corp. (the Company) as of December 31, 2022, and the related notes (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Correll Co. Investment Services Corp. as of December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of Correll Co. Investment Services Corp.'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 Correll Co. Investment Services Corp. 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 have served as Correll Co. Investment Services Corp.'s auditor since 2009. 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. Chicago, Illinois February 22, 2023 {4}------------------------------------------------ ### CORRELL CO. INVESTMENT SERVICES CORP. #### Statement of Financial Condition ### December 31, 2022 #### Assets | Cash
Receivable from broker-dealer
Securities owned, at fair value
Commissions receivable
Other assets | \$
\$ | 545,316
102,510
1,510,190
52,395
30,890
2,241,301 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------------------------------------------------------------| | Liabilities and Stockholders' Equity | | | | Liabilities
Accounts payable and accrued expenses
Deferred income taxes payable | \$ | 37,264
299,601
336,865 | | Stockholders' equity
Common stock, no par value, 1,000 shares
authorized, 100 shares issued and outstanding
Additional paid-in capital
Retained earnings | | 5,000
9,937
1,889,499
1,904,436 | | | \$ | 2,241,301 | {5}------------------------------------------------ #### 1. Organization and Business Correll Co. Investment Services Corp. (the Company), was incorporated in the State of Illinois on November 26, 1985. The Company is a registered securities broker-dealer with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Company provides brokerage services electronically to retail customers and clears all customer transactions through other brokers on a fully disclosed basis. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ #### 2. Summary of Significant Accounting Policies #### Accounting Policies The Company follows Generally Accepted Accounting Principles (GAAP), as established by the Financial Accounting Standards Board (FASB), to ensure consistent reporting of financial condition. #### Revenue Recognition and Financial Instruments Valuation Commission revenue and related expenses on equity securities are recorded as earned on an accrual basis. Securities transactions and related revenue and expenses are recorded on a trade date basis and, accordingly gains and losses are recorded on unsettled transactions. All financial instruments are recorded in the Statement of Financial Condition at fair value in accordance with FASB Accounting Standards Codification (FASB ASC) 820 - Fair Value Measurement and Disclosures (see Note 3). The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers. That guidance was amended to require public business entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Management reviewed the impact of the amendment to Topic 606 and it had no material impact on its financial statements. Commissions – The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligations is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership of the securities have been transferred to/from the customer. Investment Advisory Fees – The Company provides investment advisory services on a daily basis. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are based on a percentage applied to the customer's assets under management. Fees are received quarterly and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. #### Use of Estimates The preparation of the financial statement in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statement and the accompanying notes. Management determines that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates. #### Income Taxes The Company is taxed as a corporation and provides for taxes in accordance with FASB ASC 740, Accounting for Income Taxes, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are recognized based on the difference between the financial statement and tax basis of liabilities and assets using enacted tax rates. {6}------------------------------------------------ In accordance with GAAP, the Company is required to determine whether its tax positions are more likely than not to be sustained upon examination by the applicable taxing authority, based on the technical merits of the position. Generally, the Company is no longer subject to income tax examinations by major taxing authorities for the years before 2019. Based on its analysis, there were no tax positions identified by management which did not meet the "more likely than not" standard as of and for the year ended December 31, 2022. Deferred income taxes are recorded to reflect the future tax consequences of differences between the carrying value of asset and liabilities for income tax and financial reporting purposes, and for the benefit of tax credit and loss carryforwards. The amounts of any future tax benefits are reduced by a valuation allowance to the extent such benefits are not expected to be fully realized. For year ended December 31, 2022, Deferred income taxes payable were \$299,601. #### 3. Fair Value Measurement and Disclosure FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumption about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 Inputs – Valuation is based on quoted prices in active markets for identical assets or liabilities at the reporting date. Level 2 Inputs – Valuation is based on other than quoted prices included in Level 1 that are observable for substantially the full term of the asset or liability, either directly or indirectly. Level 3 Inputs – Valuation is based on unobservable inputs for the valuation of the asset or liability. Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. The availability of valuation techniques and observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, the type of investment, whether the investment is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement. A description of the valuation techniques applied to the Company's major categories of assets and liabilities measured at fair value on a recurring basis follows. {7}------------------------------------------------ Exchange-Traded Equity Securities. Exchange-traded equity securities are generally valued based on quoted prices from the exchange. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in level 1 of the fair value hierarchy; otherwise, they are categorized in level 2 or level 3 of the fair value hierarchy. Mutual Funds. Mutual funds can be a collection of securities, bonds, money market instruments, and other assets. Mutual funds are valued based on quoted prices from the exchange. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in level 1 of the fair value hierarchy; otherwise, they are categorized in level 2 or level 3 of the fair value hierarchy. As of December 31, 2022, the Company held equity securities with a fair value of \$920,250 and mutual funds with a fair value of \$589,940, totaling \$1,510,190 which were level 1 investments. At December 31, 2022 the Company held no Level 2 or Level 3 investments. #### 4. Receivable from Broker Dealer Receivable from broker at December 31, 2022 consists of cash deposits of \$85,564 and clearing deposit of \$16,946. #### 5. Related-Party Transactions For the year ended December 31, 2022, the Company paid an affiliated entity for administrative services, rent and certain shared expenses. #### 6. Off-Balance-Sheet Risk Customer transactions are introduced to and cleared through the Company's broker on a fully disclosed basis. Under the terms of its clearing agreements, the Company is required to guarantee the performance of its customers in meeting contracted obligations. In conjunction with the broker, the Company seeks to control the risks associated with its customer activities by requiring customers to maintain collateral in compliance with various regulatory and internal guidelines and, pursuant to such guidelines, customers may be required to deposit additional collateral, or reduce positions, where necessary. The Company does not anticipate nonperformance by its customers or the broker. In addition, the Company has a policy of reviewing, as considered necessary, the creditworthiness of the brokers with which it conducts business. #### 7. Guarantees FASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. FASB ASC 460, defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in underlying (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others. The Company has issued no guarantees effective at December 31, 2022 or during the year then ended, except as described in Note 6 above. #### 8. Credit Concentration and Contingency At December 31, 2022 a significant credit concentration consisted of cash deposited in a bank account that exceeded federally insured limits by approximately \$295,316, which represents approximately 16% of the Company's equity. Management believes that the Company is not exposed to any significant credit risk on cash. {8}------------------------------------------------ Since the Company does not clear its own securities transactions, it has established accounts with clearing brokers for this purpose. This can and often does result in a concentration of credit risk with these firms. Such risk, however, is mitigated by each clearing brokers' obligation to comply with the rules and regulations of the SEC. Management believes that the Company is not exposed to any significant risk on receivables from clearing brokers. In the normal course of business, the Company is subject to various regulatory inquiries that may result in claims of potential violations of exchange rules and that may possibly involve sanctions and/or fines. These matters are rigorously defended as they arise. Management believes there will be no material impact on the financial statements. #### 9. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13).The new guidance broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of assets measured either collectively or individually to include historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred credit loss model with the current expected credit losses model. Management determined that ASU 2016-13 did not have a material impact on the Company's financial statement. #### 10. Net Capital Requirements The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15(c)3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2022, the Company had net capital of \$1,505,357, which was \$1,500,357 in excess of its required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital was 0.02 to 1. #### 11. Subsequent Events The Company's management has evaluated events and transactions through February 22, 2023, the date the financial statement was available to be issued, noting no material events requiring disclosure in the Company's financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.