# UBS FUND SERVICES (USA) LLC X-17A-5 (2022-02-25) — Broker-dealer annual report - Company: UBS FUND SERVICES (USA) LLC - Form: X-17A-5 - Filed: 2022-02-25 - Period: 2021-12-31 - Accession: 0001022465-22-000002 - CIK: 1022465 - File #: 8-49596 - Type: Broker-dealer - Material weakness: Yes - Auditor: Ernst & Young LLP - Auditor location: Chicago, IL - Contact: Earl Lafontant - Phone: 201-3528336 - Email: earl.lafontant@ubs.com - Website: ubs.com - Signed by: Earl Lafontant (FINOP Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1022465/000102246522000002/FSSEC2021b.pdf --- {0}------------------------------------------------ FINA CIAL STATEMENTS AND SUPPLEMENTARY I FORMATION UBS Fund Services (USA) LLC Year Ended December 31, 2021 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17A-5 PART** Ill SEC FILE NUMBER 008-49596 **FACING PAGE** **Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** | FILING FOR THE PERIOD BEGINNING | ---------
01/01/21 | AND ENDING | | ----------
12/31/21 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|-----------------|------------------------------------------| | | MM/DD/ Y Y | | | MM/DD/VY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: UBS Fund Services (USA) LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
k1 Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | D Major security-based swap participant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 10 State House Square | | | | | | | {No. and Street) | | | | | Hartford | CT | | | 06103 | | {City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Earl Lafontant | 201-3528336 | | | earl.lafontant@ubs.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
EY, Ernst & Young LLP | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 155 North Wacker Drive | Chicago | | IL | 60606-1787 | | (Address) | (City) | | (State) | (Zip Code) | | 10/20/2003 | | 42 | | | | l"
of Regim,uoo with PCAOBJ(ff appHc,ble) | | | | (PCAOB RegistcaUoo N,mbe,, • appHc,ble)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-S(e)(l)(ii), if applicable. Persons who are to respond to the collection of information coliltained in this form are not required to respond unless the form displays a currently valid 0MB control number. {2}------------------------------------------------ #### OATH OR **AFFIRMATION** | | OATH OR AFFIRMATION | | |---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------| | | _______
I, Earl Lafontant
_ | __, swear (or affirm) that, to the best of my knowledge and belief, the | | | ______ _, 2~
financial report pertaining to the f,rm of USS Fund Sen/ices (USA) LLC | as ot | | | Februa!)' 25
_ | is true and correct. I further swear (or affirm) that neither the company nor arrv | | | partner, officer, director, or equivalent person, as the case may be, has any propoctary interest in any account classified solety
as that of a customer. | | | | | -
___ -'_,,,~-F
____ ,
Signature:
-
__ ; | | | JAMAL H M • RJI | Tille: | | | µ!>1.k~
Nobry Public, St~tc •;, M . ~ | FINOP Offiocr | | | Oua1·r~. OIM.ti49999si"'
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Notary Public | | | | This filing contains (chedc all applicable boxes): | | | | ta (a) Statement of financial cond,t•Ot'I | | | | (b) Note\$ to consolidated statement of financial condition. | | | | (A' (c) Statement ot income (loss) or, if there i!> othCf compr<:hc111!,~ ir'ltOml' in lhl' Pl'riod(!.) prc!.entcd, a statement of
comprehensive income (a!> dclirn:-d in § 210 1 02 of RL-&vl.,iliOn S X). | | | | V. (dJ Statement of ca.sh flows | | | 0 | ((-) SlJtcmcnt of ~;,nges ,n ,;tockholdE"t'S' °' partners' or sole proprietor's PqUrty. | | | C | {f) Statement ot dlanges in liabilities subordinated lO cl.)ims of credilOr"> | | | Q | {P.) Notes to conc;ol~.uf'd financial statements | | | | 12 (h) Computation ol net CcJpital undCf 17 CFR 740.1 SCJ-l O< 17 o:R 740. 1&.l-1, ~ s JOpliC.lblC | | | , | {,) COmput.it,on of tangible net worth under 17 CFR 240.18.t-2. | | - U) Computation for determination of CU!.tomcs reserve ,cqu,ccment!. purSvJnl to Exhibit A lo 17 CFR .240.1Sc3-3. - C (k) computation foe dctermlnatJon of security-based swap reserve requirements pursuant to Dch,btt B to 17 CFR 240.lScJ·J or Cxtub,t A to 17 OR 240.18a-4. as applicable.. - 'l (I} Computat,on for ~term1\_nat1on of PAS R.equ.rements under Exhibit A to§ 240.1.!,c3-3. - i2 (m) lnformatiOn rclatine, to possess-on or control t('quaremPnts for custom~s vn<'e< 17 CFR 240 15c3 3. - 7 (n) Information relating to possession or control requirements for sc:-rurity-based swap customers under n CfR 740. ~'3-J(p)(2] or 17 Ct R 240.1.&a-4, as applicable. - ;a (o) Reconciliations, inctudine app1opr,ate e:icpl.}n:u.ons, of the I-OCUS Report w,th compvtataon of ~t capita• or t.lntiblc l"Cl worth undet 17 CFR 240.lScJ· l, 17 CfR 240.18;,-l, or n a **R** 240.ISa-2, as app!JC.'lble, and the resc~ rl"quircmt-nb under 17 c~ 240.lScl-3 or 17 crR 240.18a-4, as applicable. it material differences exist. or a statement that no mater,.-iJ d,fferences ex.ast. - l l (p~ Summary of financial data for subsidiaries not consolidated in the statern€nt of financial condrtJon. - (Q) OJth or arflfm.1tion ,n acc0. 1/ CfR 240.l7a-U, or 17 CfR 240.1&1-7, 3.<, applie.1bl~. - D (r) Compliance rCPort in ~rd.>oQ:will'I 17 CfR :Z40.17.l-S ~ 17 UR 74().18.l 7, 05 .ipplie.>ble - *CA* (s) 1:.Xemption report in accordance with 17 CFR 240.17.i Sor 17 CFR 240.l8a-7, as applicable. - D (t) Independent public ac-eountanr~ rcPort b.lscd on an examifi3r>0n of the statcmt.~t of financial condition. - 40.18.)-1, as .1ppticablf'. - D M Supf)lcmcntJI date- of the s:,reviOvs . vdit, **0t** a stalement that no material in.tdequdci~ exc.t. unoo, 17 CfR .240.17d-12(k). r (t)Othet· \_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_ \_ - - .. 7o reauesl conf,oentrol ueotment of cenom potT1ons of thi{2), Oj opp/Jcoble. {3}------------------------------------------------ # Financial Statements and Supplementary Information Year Ended December 31, 2021 # **Contents** | Report oflndependent Registered Public Accounting Firm 1 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Financial Statements | | Statement of Financial Condition 2
Statement of Operations 3 | | Statement of Changes in Member's Capital .4
Statement of Cash Flows 5
Notes to Financial Statements 6 | | Supplementary Information | | Computation of Net Capital for Brokers and Dealers Pursuant to Rule
Schedule I -
l 5c3-l Under the Securities Exchange Act of 1934 .10
Computation for Determination of P AB Account and Reserve
Schedule II -
Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 Under the | | Securities Exchange Act of 1934 and Information Relating to Possession or Control
Requirements for Brokers and Dealers Pursuant to Rule l 5c3-3 Under the
Securities Exchange Act of 1934 11 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Ernst & Young LLP OM MMhattar'I West, 401 Ninth Avenue New York, NY 10001 #### Report of Independent Registered Public Accounting Firm To the Member and President of UBS Fund Services (USA) LLC #### Opinion on the Financial Statements We have audited the accompanying statement of fi111ancial condition of UBS Fund Services (USA) LLC (the Company) as of December 31, 2021, the related statements of operations, changes in member's capital and cash flows for the year then ended, and 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 of the Company at December 31, 2021, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles. #### Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements 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 statements are 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 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Supplemental Information** The accompanying information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. Such information is the responsibility of the Company's management. Our audit procedures included determining whether the 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. In forming our opinion on the information, we evaluated whether such information, including its form and content, is presented in conformity with Ru le 17a-5 under the Securities Exchange Act of 1934. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since at least 2000, but were unable to determine the specific year. February 25, 2022 {5}------------------------------------------------ ### Statement of Financial Condition December 31, 202 l | Assets | | |----------------------------------------------------|----------------| | Cash | \$
156,522 | | Prepaid expenses | 42,372 | | FINRA deposits | 4,431 | | Total assets | \$
203)25 | | Liabilities and member's capital
Liabi I ities: | \$ | | Accrued expenses
Total liabilities | 4,059
4,059 | | Member's capital | I 99,266 | | Total liabilities and member's capital | \$
2032325 | | | | *See accompanying notes.* {6}------------------------------------------------ # Statement of Operations Year Ended December 3 I, 2021 | Revenues | | |----------------------------------------------------------|-----------------| | Allocated registered representatives revenue -
Realty | \$
2,100,810 | | Service fee income -
Realty | 150,000 | | Total revenues | 2,250,810 | | Expenses | | | Allocated registered representatives costs -
Realty | 2,100,810 | | Registration fees | 52,265 | | Professional fees | 39,405 | | General and administrative expenses | 17,365 | | Total expenses | 2,209,845 | | Net income | \$
40 965 | *See accompanying notes.* {7}------------------------------------------------ # Statement of Changes in Member's Capital Year Ended December 3 I, 202 1 | Balance at January I, 202
1 | \$
195,01
2 | |--------------------------------|-------------------| | Net income | 40,965 | | Dividend paid | (36,71
1) | | Balance at December 3 I, 2021 | \$
199,266 | *See accompany ing notes.* {8}------------------------------------------------ # Statement of Cash Flows Year Ended December 3 I, 2021 | Cash flows from operating activities | | |-------------------------------------------------|---------------| | Net income | \$
40,965 | | Adjustments to reconcile net income to net cash | | | provided by operating activities: | | | Changes in assets and liabilities: | | | (Increase)/decrease in operating assets: | | | Prepaid expenses | 3,355 | | FINRA deposits | (766) | | lncrease/(decrease) in operating liabilities: | | | Accrued expenses | (31) | | Net cash provided by operating activities | 43,523 | | Cash flows from financing activities | | | Dividend paid | {36,7
11) | | Net cash used in financing activities | {36,711) | | Net increase in cash | 6,812 | | Cash at beginning of year | 149,710 | | Cash at end of year | \$
156,522 | | | | *See accompanying notes.* {9}------------------------------------------------ Notes to Financial Statements Year Ended December 31, 2021 ### **1. Organization and Nature of the Business** UBS Fund Services (USA) LLC (Fund Services) is organized as a Delaware limited liability company and is primarily engaged in the distribution of private investment offerings to institutional investors. Fund Services is a broker-dealer registered under the Securities and Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). UBS Realty Investors LLC (Realty), a Massachusetts limited liability company, holds a 100% member interest in Fund Services. Fund Services has transactions and relationships with Realty that materially affect its operating results and financial condition (see Note 3). UBS Americas Inc. (UBS Americas), a Delaware corporation, holds a 100% member interest in Realty. ### **2. Summary of Significant Accounting Policies** ### **Basis of Presentation** The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (US GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The negative effects of the COVID-19 crisis on our financial and capital positions remained limited in 2021 , despite the uncertainties caused by the pandemic. The Omicron variant continues to spread in many countries, and there is uncertainty about when restrictions introduced in many countries will be eased. We maintained a strong capital and liquidity position in the face of the COVID-19 pandemic. ### **Cash** Cash includes an interest-bearing deposit account at a non-affiliated bank. {10}------------------------------------------------ # Notes to Financial Statements ( continued) ### **2. Summary of Significant Accounting Policies (continued)** #### **Revenue Recognition** Service fee income is recognized as revenue when services are performed. Allocated registered representatives revenue represents revenue allocated to Fund Services from Realty pursuant to an existing services and expense sharing agreement with Realty. The allocated revenue equals the allocated registered representative costs. See Note 3 for further detail. The below table includes revenues which are impacted by Financial Accounting Standards Board (F ASB) Accounting Standards Codification (ASC) Topic 606 and it includes only those contracts with customers that are in scope of ASC Topic 606, *Revenue from Contracts with Customers.* ## *Disaggregatioll of Revenue from Contracts with Customers* | Service fee income -
Realty | \$
150,000 | |--------------------------------|---------------| | Total | \$
150,000 | ### **Income Taxes** Fund Services is treated as a disregarded entity for federal, state and local income tax purposes. As such, Fund Services does not provide for or pay any U.S. federal or state income taxes. All income, expense, gain or loss of Fund Services flows through to UBS Americas. #### **Accounting Developments** There are no recent accounting pronouncements that affect Fund Services. ### **3. Related-Party Transactions** Fund Services has entered into a Services Agreement (the Agreement) with Realty to provide certain administrative, operating, and other support services to Realty as needed for the distribution of private investment offerings to institutional investors for the greater of\$ 150,000 or a fee based on quarterly deposits into sponsored funds. For the year ended December 31, 2021, the \$ 150,000 of service fee income included in the accompanying statement of operations was earned from Realty under the Agreement. {11}------------------------------------------------ ### Notes to Financial Statements ( continued) ### **3. Related-Party Transactions (continued)** In addition, the registered representatives of Fund Services (Representatives) are supervised persons of Realty. Although the primary business activities of such individuals relate to the investment advisory activities of Realty, Realty and Fund Services have agreed that certain costs associated with these Representatives will be allocated to Fund Services. Realty has also agreed to allocate revenues to Fund Services in an amount equal to these costs. The costs include facilities and other occupancy and information technology expenses, salary and employee benefit expenses, and other general and administrative expenses. For the year ended December 31, 2021, \$2,100,810 is included in the allocated registered representatives costs - Realty on the statement of operations. #### **4. Dividend** The Board of Directors of Realty declared a dividend on July 15, 2021 for the amount of \$36,711 . The dividend was paid to Realty on August 16, 2021. #### **5. Net Capital Requirements** Fund Services is a Non-Covered Firm pursuant to Securities and Exchange Commission (SEC) Rule 15c3-l(a)(2)(vi). This rule requires the maintenance of minimum net capital of the greater of \$5,000 or 6 2/3% of aggregate indebtedness, as defined in the rule. As of December 31, 2021, Fund Services' net capital, as defined, was \$152,463, which exceeded the minimum net capital required by \$147,463. Dividend payments, equity withdrawals, and advances are subject to certain notification and other provisions of the net capital rules of the SEC and other regulatory bodies. ### **6. Contingencies** At various times, Fund Services may be name,d as a defendant in legal actions arising in the ordinary course of business. While the outcome of such matters cannot be predicted with certainty, in the opinion of management of Fund Services, any such actions will be resolved with no material adverse effect on Fund Services' financial statements taken as a whole. {12}------------------------------------------------ ## Notes to Financial Statements ( continued) #### **7. Subsequent Events** Fund Services has evaluated its subsequent event disclosure through February 25, 2022, the date that Fund Services' financial statements were issued, and has determined there are no material events that occurred during that period that would require disclosure or would be required to be recognized in the financial statements as of December 31 , 2021. {13}------------------------------------------------ Supplementary Information {14}------------------------------------------------ ## Schedule I # Computation ofNet Capital for Brokers and Dealers Pursuant to Rule 15c3-l Under the Securities Exchange Act of 1934 December 31 , 2021 | Member's capital
Less non-allowable assets: | \$
199,266 | |----------------------------------------------------------|---------------------| | Prepaid expenses
FINRA deposits | (42,372)
{4,431} | | | (46,803) | | Net capital | \$
152,463 | | Aggregate indebtedness | \$
4,059 | | Net capital requirement (greater of \$5,000 or 6 2/3% of | | | aggregate indebtedness of \$4,059) | \$
5,000 | | Excess net capital | \$
147,463 | There are no material differences between the above computation of net capital pursuant to Rule 15c3-1 and the corresponding computation included in Fund Services' December 31, 2021, unaudited amended Part IIA FOCUS Report, as refiled on February 24, 2022. {15}------------------------------------------------ ### Schedule II Computation for Determination of P AB Account and Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 Under the Securities Exchange Act of 1934 and Information Relating to Possession or Control Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 Under the Securities Exchange Act of 1934 December 31, 2021 Fund Services is characterized as a Non- Covered Firm and covered by SEC's guidance set forth in footnote 74 to SEC Release No. 34-70073. Fund Services does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3. The ac6vities of Fund Services are limited to distribution of private placements of funds managed by its UBS affiliates, primarily its immediate parent and its sister company. {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) Ernst & Young LLP One Manhattan West, 401 Ninth Avenue New York, NY 10001 Tel: +1212 773 3000 ey.com #### **Report of Independent Registered Public Accounting Firm** The President and Management of UBS Fund Services (USA) LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which UBS Fund Services (USA) LLC (the Company) stated that: - (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3- 3. - (2) The Company is relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because, the Company limits its business activities exclusively to the distribution of private placements of funds managed by its UBS affiliates, primarily its immediate parent, UBS Realty Investors, an investment adviser specializing in direct real estate investments, registered with the SEC and its sister company, UBS Farmland Investors LLC, an SEC registered adviser that specializes in agricultural investments, and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3), throughout the most recent fiscal year ended December 31 , 2021 without exception. Management is responsible for compliance with 17 C.F.R. § 240.15c3-3 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 17 C.F.R. § 240.15c3-3. 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, pursuant to footnote 74 of SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. This report is intended solely for the information and use of the President, management, the SEC, Financial Industry Regulatory Authority, other regulatory agencies that rely on Rule 17a-5 under the Securities Exchange Act of 1934 in their regulation of registered brokers and dealers, and other recipients specified by Rule 17a-5(d)(6) and is not intended to be and should not be used by anyone other than these specified parties. February 25, 2022 {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) **UBS** One North Wacker Drive Chicago IL 60606 Tel. +1 -312-525 7100 www.ubs.com ### UBS Fund Services (USA) LLC ### Exemption Report December 31, 2021 UBS Fund Services (USA) LLC (the "Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240. l 7a-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)(l) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. l 5c3-3, and (2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240. l 7a-5 because the Company limits its business activities exclusively to the distribution of private placements of funds managed by its UBS affiliates, primarily its immediate parent, UBS Realty Investors, an investment adviser specializing in direct real estate investments, registered with the SEC and its sister company, UBS Farmland Investors LLC, an SEC registered adviser that specializes in agricultural investments, and the Company (I) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; (2) did not carry accounts of or for customers; and (3) did not caITy PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. UBS Fund Services (USA) LLC I, Earl Lafontant, swear that, to my best knowledge and belief, this Exemption Report i~ true and correct. £ ~~--:::..,. By: **"f:-