# TRADEWEB L.L.C X-17A-5 (2024-02-26) — Broker-dealer annual report - Company: TRADEWEB L.L.C - Form: X-17A-5 - Filed: 2024-02-26 - Period: 2023-12-31 - Accession: 0001034262-24-000002 - CIK: 1034262 - File #: 8-49994 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Jonathan Pittinsky - Phone: 9738796704 - Email: jonathan.pittinsky@tradeweb.com - Website: tradeweb.com - Signed by: Jonathan Pittinsky (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1034262/000103426224000002/TWLPUB23.pdf --- {0}------------------------------------------------ # Tradeweb LLC (SEC I.D. No. 8-49994) Statement of Financial Condition as of December 31, 2023, and Report of Independent Registered Public Accounting Firm Filed pursuant to Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a Public Document {1}------------------------------------------------ # PUBLIC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB number: Estimated average hours per response: SEC FILE NUMBER 8-49994 3235-0123 Expires: Nov. 30, 2026 12 burden | 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 | A
REGISTRANT IDENTIFICATION
NAME OF
Tradeweb LLC
FIRM:
TYPE OF REGISTRANT (check all applicable boxes):
o Broker-dealer
= Security-based swap dealer = = Major security-based swap participant
(No. and Street)
New York
NY
10036
(Zip Code)
(State)
(City)
PERSON TO CONTACT WITH REGARD TO THIS FILING
646-430-6092
jonathan.pittinsky@tradeweb.com
(Area Code - Telephone
(Email Address)
Number)
B. Accountant Identification
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Deloitte & Touche LLP
(Name - if individual, state last, first, and middle name)
New York
NY
10012
(City)
(State)
(Zip Code)
10/20/2003
34
(Date of Registration with PCAOB)(if
(PCAOB Registration Number, if applicable)
applicable)
FOR OFFICIAL USE ONLY | FILING FOR THE PERIOD
BEGINNING | 01/01/2023
MM/DD/YY | AND ENDING | | 12/31/2023
MM/DD/YY | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|------------------------|------------|--|------------------------|--|--| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)
1177 Avenue of the Americas
Jonathan Pittinsky
(Name)
30 Rockefeller Plaza
(Address) | □ Check here if respondent is
also an OTC derivatives dealer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Claims for exemption from the requirement that the annual 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)(1)(ii), if applicable. 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. {2}------------------------------------------------ #### This filing\*\* contains (check all applicable boxes): - X - X - □ (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), - □ (d) Statement of cash flows. - □ (e) Statement of changes in stockholder's or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (i) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (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. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (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. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, 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. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - X 240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240,17a-5 or 17 CFR 240,18a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable (filed separately). - X condition. - □ (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. - □ (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. - □ (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 (filed separately). - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - □ (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). - (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. {3}------------------------------------------------ #### Affirmation I, Jonathan Pittinsky, affirm that, to the best of my knowledge and belief the accompanying financial statements and supporting schedules pertaining to the firm of Tradeweb LLC, as of December 31, 2023, are true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. Johan Pittinsky hief Financial Officer Pursuant to the statement from the staff of the Division of Trading and Markets regarding the notarization requirements applicable to the Impacted Paper Submissions or in the electronic filings of a broker-dealer's annual reports required under paragraph (d) of SEC Rule 17a-5 and the difficulties arising from COVID-19, Tradeweb LLC is making this filing without a notarization. {4}------------------------------------------------ Deloitte & Touche LLP 30 Rockefeller Plaza New York, NY 10112-0015 USA Tel: +1 212 492 4000 Fax: +1 212 489 1687 www.deloitte.com #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Managers and Member of Tradeweb LLC #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Tradeweb LLC (the "Company") as of December 31, 2023, and the related notes (collectively referred to as 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, 2023, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion The 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 of the financial statement provides a reasonable basis for our opinion. February 26, 2024 We have served as the Companys auditor since 2019. {5}------------------------------------------------ # Tradeweb LLC Statement of Financial Condition December 31, 2023 (in thousands) | Assets | | | |----------------------------------------------------------|-----|---------| | Cash and cash equivalents | ക്ക | 95,021 | | Accounts receivable | | 65,536 | | Receivable from affiliates | | 2,368 | | Other assets | | 578 | | Total assets | ക | 163,503 | | Liabilities and Member's Capital | | | | Liabilities | | | | Accrued compensation | ക | 20,104 | | Deferred revenue | | 2,063 | | Accounts payable, accrued expenses and other liabilities | | ਰੈਰੇਤ | | Payable to affiliates | | 19,673 | | Total liabilities | | 42,833 | | Member's capital | | | | Member's capital | | 120,670 | | Total liabilities and member's capital | ക | 163,503 | | | | | {6}------------------------------------------------ #### 1. Organization Tradeweb LLC (the "Company") is a registered broker-dealer under the Securities Exchange Act of 1934, a member of the Financial Industry Regulatory Authority ("FINRA"), a member of the Municipal Securities Rulemaking Board ("MSRB"), a registered independent introducing broker with the Commodities Future Trading Commission ("CFTC") and a member of the National Futures Association ("NFA"). The Company relies on the international dealer exemption in the Canadian provinces of Ontario, Alberta, British Columbia, New Brunswick, Nova Scotia, Quebec, Saskatchewan and Manitoba and is recognized as a foreign trading venue in Switzerland. The Company is a consolidating subsidiary of Tradeweb Markets LLC ("Markets"). On April 3, 2019, Markets became a consolidating subsidiary of Tradeweb Markets Inc. ("TWMI") through a series of reorganization transactions ("Reorganization Transactions") that were completed in connection with TWMI's initial public offering ("IPO") which was completed on April 8, 2019. The Company provides services that enable institutional investors to view fixed income, derivative and equity market data and trade fixed income securities, derivatives and equity securities with their dealers on electronic marketplaces (the "Tradeweb Network") developed and maintained by Markets. #### 2. Significant Accounting Policies #### Basis of Accounting The financial statement has been presented in conformity with accounting principles generally accepted in the United States of America. #### Use of Estimates The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statement. Actual results could differ from those estimates and the difference may be material to the financial statement. #### Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments (such as short-term money market instruments) with remaining maturities at the time of purchase of less than three months. #### Allowance for Credit Losses The Company continually monitors collections and payments from its clients an allowance for credit losses. The allowance for credit losses is based on an estimate of the amount of potential credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection experience and other specific account data. Careful analysis of the financial condition of the Company's counterparties is also performed. {7}------------------------------------------------ #### Translation of Foreign Currency Assets and liabilities denominated in currencies other than U.S. dollars are recorded in U.S. dollars at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities that are denominated in foreign currencies are then remeasured at the end of each reporting period at the exchange rate prevailing at the end of the reporting period. #### Income Tax The Company, together with Markets and other affiliates, is a multiple member limited liability company which is taxed as a partnership, Markets is subject to unincorporated business taxes on income earned, or losses incurred, in certain state and local jurisdictions. The taxable income or loss of the Company is also includable in the Federal and state income tax returns of Markets' individual members. No income tax provision is required to be recorded by the Company as it is a disregarded entity for income tax purposes and therefore not subject to income tax. The tax effects of its income and losses accrue directly to Markets. The Company elected not to be allocated a share of the consolidated amount of current and deferred tax expense incurred by Markets. This election was made in order to simplify the Company's accounting for income taxes. #### Stock-Based Compensation The stock-based payments received by the employees of the Company are accounted for as equity awards. The Company measures and recognizes the cost of employee services received in exchange for awards of equity instruments based on their estimated fair values measured as of the grant date. These costs are recognized as an expense over the requisite service period with an offsetting increase to member's capital. The grant-date fair value of stock-based awards that do not require fi.e., vested awards) are expensed immediately. Forfeitures of stock-based awards are recognized as they occur. For performance-based restricted stock units that vest based on market conditions, the Company recognizes stock-based compensation based on the estimated grant date fair value of the awards computed with the assistance of a valuation specialist using a Monte Carlo simulation on a binomial model. The significant assumptions used to estimate the fair value of the performance-based restricted stock units that vest based on market conditions are years of maturity, annualized volatility and the riskfree interest rate. The maturity period represents the period of time that the award granted was modeled into the future, the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the maturity period of the expected volatility is based upon historical volatility of the TWMI's Class A common stock. #### Fair Value Measurement The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the exit price). Instruments that the Company owns (long positions) are marked to bid prices, and instruments that the Company has sold, but not yet purchased (short positions) are marked to offer prices. Fair value measurements do not include transaction costs. {8}------------------------------------------------ The fair value hierarchy under ASC 820, Fair Value Measurement ("ASC 820"), prioritizes the inputs to valuation techniques used to measure fair value. The highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below. #### Basis of Fair Value Measurement A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date
for identical, unrestricted assets or liabilities: | |---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Level 2 | Quoted prices in markets that are not considered to be active or financial instruments for
which all significant inputs are observable, either directly or indirectly; | | Level 3 | Prices or valuations that require inputs that are both significant to the fair value
measurement and unobservable. | Included in cash and cash equivalents are \$92,768,000 of money market funds which are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. The Company has no instruments that are classified within levels 2 or 3 of the fair value hierarchy. The Company's financial instruments not measured at fair value include accounts receivable, which are classified within level 2 of the fair value hierarchy and approximate fair value due to the short-term nature of the assets. #### Business Segments The Company's operations constitute a single business segment derived substantially in the United States of America. #### 3. Stock-Based Compensation Plans TWMI and Markets have stock incentive plans which provide for the grant of performance-based restricted share units that vest based on the financial performance of TWMI ("PRSUs"), restricted share units ("RSUs"), performance-based restricted stock units that vest based on market conditions ("PSUs") and options, to encourage employees of Markets and its subsidiaries and affiliates to participate in the long-term success of TWMI and Markets. PRSUs are promises to issue actual shares of common stock and generally cliff vest on January 1 of the third calendar year from the calendar year of the date of grant. The fair value of PRSUs is calculated on the grant date using the stock price of TWMI's Class A common stock. The number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the financial performance of the TWMI in the grant year. The performance modifier can vary between 0% (minimum) and 200% (maximum) of the target (100%) award amount for awards granted during 2022 and prior years. PRSUs granted during 2023 had a 250% maximum performance modifier. Compensation {9}------------------------------------------------ expense for PRSUs that cliff vest is recognized on a straight-line basis over the vesting period for the entire award. The number of shares included in expense each period is based on management's estimate of the probable final performance modifier for those grants, with such estimate updated each period until the performance modifier is finalized. RSUs are promises to issue actual shares of common stock at the end of a vesting period. RSUs generally vest one-third each year over a three-year period. The grant date fair value of RSUs is determined using the stock price of TWMI's Class A common stock. The grant-date fair value of RSUs are amortized into expense on a straight-line basis over the requisite service period for the entire award. PSUs are promises to issue actual shares of common stock and cliff vest on January 1 of the third calendar year from the calendar year of the date of grant. The number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of TWMI's total shareholder return over a three-year performance period. The performance modifier can vary between 0% (minimum) and 250% (maximum) of the target (100%) award amount. The grant date fair value of PSUs, determined using a Monte Carlo simulation model, is recognized as compensation expense on a straight-line basis over the vesting period for the entire award, regardless of the number of shares received by the participant at vesting. The significant assumptions used to estimate the fair value of PSUs estimated using the Monte Carlo simulation model were as follows: | | March 15, 2023
PSU Grant | |-------------------------|-----------------------------| | Maturity (years) | 2.8 | | Annualized Volatility | 28.81 % | | Risk-free Interest Rate | 3.77 % | As of December 31, 2023, there were no unvested option awards outstanding for employees of the Company. TWM and Markets allocates to the Company compensation expense relating to PRSUs, RSUs and PSUs granted to employees of the Company. #### 4. Net Capital Requirements The Company is subject to the Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934. Under the Rule, the Company is required to maintain net capital, as defined, equivalent to the greater of \$45,000 or 6 2/3% of aggregate indebtedness, as defined. At December 31, 2023, the Company had net capital of \$50,243,000 which exceeded its requirement of \$2,856,000 by \$47,387,000. The Company's ratio of aggregate indebtedness to net capital was 0.85 to 1. The Company (1) does not directly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of SEC Rule 15c2-4; (2) does not carry accounts of or for customers; and (3) does not carry PAB accounts (as defined in SEC Rule 15c3-3). Therefore, in light of Footnote 74 of the 2013 Release adopting amendments to SEC to Rule 17a-5 and SEC guidance provided on July 1, 2020, the Company is considered a Non-Covered Firm. {10}------------------------------------------------ #### 5. Related Party Transactions Markets is reimbursed by the Company for expenses paid on behalf of the Company for various services including payroll, marketing, professional fees, communications, data costs and certain other administrative services under an expense sharing agreement. #### 6. Credit Risk Cash and cash equivalents includes cash and highly liquid investments held by a limited number of global financial institutions, including cash amounts in excess of federally insured limits. To mitigate this concentration of credit risk, the Company invests through high-credit-quality financial institutions, monitors the concentration of credit exposure of investments with any single obligor and diversifies as determined appropriate. The Company may be exposed to credit risk regarding its receivables, which are primarily receivable from financial institutions, including investment managers and broker-dealers. At December 31, 2023, the Company maintained an allowance for credit losses of \$48,000 with regard to these receivables. ### 7. Commitments and Contingencies In the normal course of business, the Company enters into agreements with its customers which provide the customers with indemnification rights, including in the Tradeweb Network infringes upon the intellectual property or other proprietary rights of a third party. The Company's exposure under these agreements is unknown as this would involve estimating future claims against the Company which have not yet occurred. However, based on its experience, the Company expects the risk of a material loss to be remote. #### 8. Subsequent Events There were no subsequent events requiring adjustment to the financial statements or disclosure through February 26, 2024, the date that the Company's financial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.