# CAPITAL ONE SECURITIES, INC. X-17A-5 (2025-02-14) — Broker-dealer annual report
- Company: CAPITAL ONE SECURITIES, INC.
- Form: X-17A-5
- Filed: 2025-02-14
- Period: 2024-12-31
- Accession: 0001048281-25-000001
- CIK: 1048281
- File #: 8-50561
- Type: Broker-dealer
- Material weakness: No
- Auditor: Keiter
- Auditor location: Glen Allen, VA
- Contact: Gabrielle Halprin
- Phone: 5045337377
- Email: gabrielle.halprin@capitalone.com
- Website: capitalone.com
- Signed by: Gabrielle Halprin (Chief Financial Operations Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1048281/000104828125000001/COSPUBLICFS2024.pdf
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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549**
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# **ANNUAL REPORTS FORM X-17A-5 PART** Ill
| SEC FILE NUMBER |
|-----------------|
| 8-50561 |
#### **FACING PAGE**
**Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934**
| FILING FOR THE PERIOD BEGINNING | __
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0_1_/0_1_/2_4 | AND ENDING | __
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1_2/_3_1_/2_4 | | | |
|---------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------|----------------------------------|--|--|--|
| | MM/DD/VY | | MM/DD/VY | | | |
| | A. REGISTRANT IDENTIFICATION | | | | | |
| NAME OF FIRM: --=C-=a=p-'--=it=a.,_I O=-'--'n=e---'S=-e=-c=u=r--'-'it"-'ie=--=sc,,-'-'ln'--'-c=·------------- | | | | | | |
| TYPE OF REGISTRANT (check all applicable boxes):
[!] Broker-dealer
□ Check here 1f respondent Is also an OTC derivatives dealer | □ Security-based swap dealer | □ MaJor security-based swap part1c1pant | | | | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O box no) | | | | | | |
| 201 St. Charles Ave., Suite 1830 | | | | | | |
| | (No and Street) | | | | | |
| New Orleans | LA | | 70170 | | | |
| (City) | (State) | | (Zip Code) | | | |
| PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | |
| Gabrielle Halprin | (504) 533-7377 | | gabrielle.halprin@capitalone.com | | | |
| (Name) | (Area Code -Telephone Number) | | (Email Address) | | | |
| | B. ACCOUNTANT IDENTIFICATION | | | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this f1lmg* | | | | | | |
| Keiter | | | | | | |
| | (Name - 1f md1v1dual, state last, first, and middle name) | | | | | |
| 4401 Dominion Blvd. | Glen Allen | VA | 23060 | | | |
| (Address) | (City) | (State) | (Zip Code) | | | |
| 10/22/2003 | | 80 | I | | | |
| l''
of Rego,t,at,oo w,th PCAOB)l,f apphcable) | | (PCAOB Rego,tcat,oo N,mbec, ,t apphcable) | | | | |
| | 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)(1)(11), 1f 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 0MB control number.**
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#### **OATH OR AFFIRMATION**
I, Gabrielle Halprin , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Capital One Securities, Inc. , as of
December 31 , 2~ is 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.
Title: Chief Fi
Notary Public
#### **This filing\*\* contains (check all applicable boxes):**
- **i!!!i** (a) Statement of financial condition.
- **i!!!i** (b) Notes to consolidated statement of financial condition.
- D (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.
- D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- D (f) Statement of changes in liabilities subordinated to claims of creditors.
- D (g) Notes to consolidated financial statements.
- D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-l, as applicable.
- D (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- D (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.
- D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3.
- D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
- D (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.
- D (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.
- D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- **i!!!i** (q) Oath or affirmation in accordance with 17 CFR 240.l 7a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
- D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- D (s) Exemption report in accordance with 17 CFR 240.l 7a-5 or 17 CFR 240.18a-7, as applicable.
- **i!!!i** (t) Independent public accountant's report based on an examination of the statement of financial condition.
- D (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.
- D (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.
- D (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.
- D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable.
- D (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). D (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.
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(A Wholly Owned Subsidiary of Capital One Financial Corporation)
FINANCIAL REPORT
Years Ended December 31, 2024 and 2023 With Report of Independent Registered Public Accounting Firm
SEC ID 8 - 50561
Filed pursuant to Rule 17a-5(e)(3) as a PUBLIC DOCUMENT.
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(A Wholly Owned Subsidiary of Capital One Financial Corporation)
## **Table of Contents**
| Report oflndependent Registered Public Accountmg Firm . | | | | | | |
|--------------------------------------------------------------------------|--------|--|--|--|--|--|
| Fmancial Statements: | | | | | | |
| Statements of Fmanctal Condition
Notes to Financial Statements. | 2
3 | | | | | |
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#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Stockholder and Board of Directors of Capital One Securities, Inc. New Orleans, Louisiana
#### **Opinion on the Financial Statements**
We have audited the accompanying statements of financial condition of Capital One Securities, Inc. (the "Company"), as of December 31 , 2024 and 2023, 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 as of December 31 , 2024 and 2023 in conformity with accounting principles generally accepted in the United States of America.
#### **Basis for Opinion**
The 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits 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 audits 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 audits provide a reasonable basis for our opinion.
We have served as the Company's auditor since 2008.
Glen Allen, Virginia February 4, 2025
> ) **Certified Public Accountants** & **Consultants** 4401 Dominion Boulevard Glen Allen, VA 23060 T:804.747.0000 F:804.747.3632
www.keitercpa.com
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(A Wholly Owned Subsidiary of Capital One Financial Corporation)
#### Statements of Fmancial Condition
| | December 31, | | | |
|------------------------------------------------------------|--------------|----|-------------|--|
| | 2024 | | 2023 | |
| Assets: | | | | |
| Cash on deposit with affiliated company
\$ | 5,120,747 | \$ | 5,095,517 | |
| Investment m money market mutual fund
. | 333,455,599 | | 287,168,225 | |
| Commissions receivable from cleanng coJTespondent . | 47,517 | | 89,719 | |
| Accounts receivables .
.
. | 7,535,594 | | 8,341,610 | |
| Other receivables
. | 4,302 | | 18,637 | |
| Deposit with clearing correspondent
. . | 250,000 | | 250,000 | |
| . .
Goodwill | 3,493,211 | | 3,493,211 | |
| Due from affiliates . | 2,325,477 | | 2,336,185 | |
| Def erred tax asset
.
. . | 879,066 | | 566,686 | |
| Total assets , \$ | 353,111,513 | \$ | 307,359,790 | |
| Liabilities: | | | | |
| Commiss10ns payable to brokers and dealers \$ | 17,387,939 | \$ | 10,960,722 | |
| Accrued expenses and other liabilities.
. . | 1,450,325 | | 558,280 | |
| Due to affiliates
. | 423,403 | | 1,291,566 | |
| Total liabilities . | 19,261,667 | | 12,810,568 | |
| Stockholder's equity: | | | | |
| Common stock, no par value; 100,000 shares authorized, one | | | | |
| share issued and outstanding . | 10,000 | | 10,000 | |
| Additional paid-in capital
. . | 108,431,477 | | 108,431,477 | |
| Retained earnings . | 225,408,369 | | 186,107,745 | |
| Total stockholder's equity | 333,849,846 | | 294,549,222 | |
| Total liabilities and stockholder's equity . \$ | 353,111,513 | \$ | 307,359,790 | |
See accompanymg Notes to Financial Statements.
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(A Wholly Owned Subsidiary of Capital One Financial Corporation)
## Notes to Fmancial Statements
## **Note 1-0rganization**
Capital One Secuntles, Inc (the "Company") is a wholly owned subsidiary of Capital One Fmanctal Corporation ("Capital One"). The Company is a full-service mvestment bankmg finn providing equity research and mstltut10nal sales and trading services in both fixed income and equity securities to large, mstltutional accounts pnmanly in North Amenca. The Company also provides corporate finance services primarily to middle-market compames m the Umted States. Investment bankmg services are occas10nally provided to companies outside of the Umted States. The Company is registered with the Securities and Exchange Commiss10n as a broker-dealer and is a member of the Fmanctal Industry Regulatory Authority, Inc. ("FINRA").
#### **Note 2--Summary of Significant Accounting Policies**
#### **Basis of Accounting**
The financial statements of the Company are prepared m accordance with U.S. generally accepted accounting principles ("U S GAAP")
#### **Use of Estimates**
The preparation of financial statements m conf01m1ty with U.S. GAAP requires management to make estimates and assumpt10ns that affect the amounts reported m the financial statements and accompanying notes. While management makes its best Judgment, actual results could differ from those estimates
#### **Cash on Deposit with Affiliated Company**
The Company considers all highly hquid mvestments with a stated matuiity of three months or less when purchased to be cash equivalents The Company does not consider its mvestment m the money market mutual fund to be a cash equivalent m the accompanying statements of cash flows based on regulatmy gmdance. Cash includes amounts held at Capital One, National Association ("CONA''), a related party, totalmg \$5,120,747 and \$5,095,517 at December 31, 2024 and 2023, respectively. CONA is a maJor financial mstltut10n and 1s insured up to \$250,000 by the Federal Deposit Insurance Corporation.
#### **Investment in Money Market Mutual Fund**
Investment m the money market mutual fund is measured at fair value The market value is based on quoted prices received from vanous pncmg services
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(A Wholly Owned Subsidiary of Capital One Financial Corporation)
#### Notes to Financial Statements ( continued)
#### **Accounts Receivables**
Accounts receivables primarily represent receivables due from lead underwriters for investment banking transactions where the Company acted as an undeiwnter.
The Company follows Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("ASU") 2016-13 - Cun-ent Expected Credit Losses ("CECL"). This gmdance reqmres use of the cmTent expected credit loss model that 1s based on expected losses (net of expected recoveries), rather than incuned losses, to determine its allowance for credit losses on financial assets measured at amortized cost, which includes other receivables and ce1iain offbalance sheet arrangements
The Company has no histoncal credit losses. There are no current indications of non-receipt from counterpmiies. The Company projects no probabihty of future losses related to these balances Due to these factors, as well as the short-term nature of these receivables, management has determined that these receivables have minimal credit nsk and, therefore, no allowance was deemed necessary as of December 31, 2024 and 2023.
## **Goodwill**
In connection with the acquisit10n of the Company by Capital One, the Company recorded goodwill of \$3,493,211 representing the amount by which the purchase pnce exceeded the fair value of the net assets acquired
Goodw1ll 1s not amortized but 1s tested for impairment annually and between annual tests if events or circumstances indicate potential impairment Impamnent 1s the condition that exists when the carry111g amount of goodwill exceeds its implied fair value Based upon the results of the Company's 2024 and 2023 goodwill impairment testing, management has deteimined that the fair value of goodwill exceeded its carry111g value Accord111gly, the goodwill of the Company was not considered impaired. The Company will continue to regularly monitor overall economic cond1t10ns and other events or circumstances that may impair the goodwill 111 the future
#### **Income Taxes**
The Company 1s included in Capital One's consolidated federal 111come tax return but files a separate state income tax return Capital One allocates federal 111come tax expense to the Company using a separate return basis. The Company is reimbursed by Capital One for federal 111come tax losses, 1f applicable. Amounts owed to or due from Capital One for federal income taxes are reported as a component of due to or from affiliates 111 the accompanying statements of financial
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(A Wholly Owned Subsidiary of Capital One Fmancial Corporation)
#### Notes to Fmancial Statements (continued)
condition. Taxes receivable amounts mcluded in due from affiliates totaled \$1,742,872 and \$2,336,185 at December 31, 2024 and December 31, 2023, respectively
Defened tax assets and hab1lities are based on differences between the financial reportmg and tax basis of assets and hab1ht1es and are measured using the enacted tax rates and laws that will be m effect when the differences are expected to reverse.
The Company has evaluated the effect of accountmg guidance surrounding uncertain income tax posit10ns and concluded that the Company has no s1gmficant financial statement exposure to uncertain income tax posit10ns as of December 31, 2024 and 2023.
#### **Recently Adopted Accounting Guidance**
In November 2023, the FASB issued ASU 2023-07· Improvements to Reportable Segment Disclosures This ASU, which amends Topic 820. Segment Repmimg, improves disclosure reqmrements for reportable segments and enhances disclosures for compames with single repo1iable segments. The Company has a smgle repmiable segment based on the nature of its services and iegulatory environment under which it operates. The nature of the business and the accountmg pohc1es of the segment are the same as described throughout Notes 1 and 2 The Company's Chief Operating Decision Maker ("CODM") is its Executive Team. The CODM assesses the segment's perforinance and allocates resources based on net mcome and total assets. Total assets per the segment ts the same m all material respects as those reported on the statements of financial pos1hon. The Company adopted the standard on January 1, 2024. The adoption dtd not have a material impact on the Company's financial statements
## **New Accounting Pronouncements**
In December 2023, the FASB issued ASU 2023-09· Income Taxes (Topic 740)· Improvements to Income Tax Disclosures, which modifies the rnles on income tax disclosures to reqmre disaggregated mformat10n about a reporting entity's effective tax rate reconciliation as well as info1mation on mcome taxes paid The gmdance ts effective for the Company in 2025. The Company is currently evaluatmg the potential impact of adoptmg this new gmdance
## **Note 3-Fair Value of Financial Instruments**
Fall' value is defined as the price that would be received for an asset or paid to transfer a habihty man orderly transact10n between market participants on the measurement date (also referred to as an exit price). The fair value accounting guidance provides a three-level fair value hierarchy for classifymg financial mstrnments. This hierarchy is based on the markets m which the assets or habihtles trade and whether the inputs to the valuation techmques used to measure fair value are observable or unobservable The fair value measurement of a financial asset or habihty is assigned
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(A Wholly Owned Subsidiary of Capital One Fmancrnl Corporation)
Notes to Fmancrnl Statements ( contmued)
to a level based on the lowest level of any mput that 1s significant to the fall' value measurement m its entirety The three levels of the fa1r value hierarchy are descnbed below
- Level l-Valuat10n 1s based on quoted pnces (unadJusted) in active markets for 1dent1cal assets or liab1ht1es
- Level 2-Valuation 1s based on observable market-based mputs, other than quoted pnces m active markets for identical assets or liabilities, quoted prices m markets that are not active, or models usmg mputs that are observable or can be conoborated by observable market data of substantially the full tenn of the assets or liabilities
- Level 3-Valuatrnn 1s generated from techmques that use s1gmficant assumptions not observable in the market. Valuation techniques mclude pncmg models, discounted cash flow methodologies or s1milat techmques
The accountmg guidance for fair value measurements requires that we max1m1ze the use of observable inputs and minimize the use of unobservable mputs m determmmg fair value.
All of the mvestments held by the Company are categorized as Level 1, as the valuation of each is based on quoted pnces of each asset. The Company does not have any financrnl hab1ht1es w1thm the scope of the accounting guidance.
The following tables display the Company's assets on the accompanymg statements of financial cond1t10n measured at fall' value on a recurnng basis as of December 31, 2024 and 2023:
## *Assets Measured at Fair Value on a Recurring Basis*
| | | | December 31, 2024 | | | |
|----------------------------|-------------------------------|----|-------------------|----|---------|-------------------------|
| | Fair Value Measurements Using | | | | Total | |
| | Level 1 | | Level 2 | | Level 3 | Estimated
Fair Value |
| Secuntles owned: | | | | | | |
| Money market mutual fund . | \$
333,455,599 | \$ | | \$ | | \$ 333,455,599 |
| Total securities owned | \$
333,455,599 | \$ | | \$ | | \$ 333,455,599 |
| | | | December 31, 2023 | | | |
| | Fair Value Measurements Using | | | | Total | |
| | Level 1 | | Level 2 | | Level 3 | Estimated
Fair Value |
| Secunties owned· | | | | | | |
| Money market mutual fund | \$
287,168,225 | \$ | | \$ | | \$ 287,168,225 |
| Total secunties owned | \$
287,168,225 | \$ | | \$ | | \$ 287,168,225 |
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(A Wholly Owned Subsidiary of Capital One Fmanc1al Corporation)
#### Notes to Financial Statements (continued)
## **Note 4-Income Taxes**
Under its Compliance Assurance Program, the Internal Revenue Service 1s m the process of aud1tmg Capital One's 2024, 2023 and 2022 federal mcome tax returns The outcome of the audit 1s not expected to have a matenal impact on the financial results of the Company.
## **Note 5--Related Party Transactions**
Vanous admm1strative expenses are paid on behalf of the Company by CONA, under a Master Services Agreement between the Company, CONA and various affiliates These admm1stratlve expenses are reimbursed by the Company to CONA on a monthly basis. In addition, the Company pays a management fee to CONA based on an mtemally calculated allocat10n of overhead cost
The Company sponsors mcentlve plans for qualified employees. A portion of mdividual employee's mcent1ve compensat10n may be awarded in the fonn of restricted share umts (the "Units") of Capital One and 1s payable to employees accordmg to a vesting schedule The expense associated with the vestmg of the Umts 1s reimbursed by the Company to Capital One on a quarterly basis
The Company has an agreement with KippsDeSanto & Company. ("KDC") and TnpleTree, LLC ("TT"), affiliated broker-dealers, whereby associates of each broker-dealer may provide vanous administrative services to the other affiliates. The Company receives reimbursements for services provided to the affiliated broker-dealers on a monthly basis, net of any amounts due from the Company for services received from the affiliated broker dealers
The Company currently occupies office space leased by Capital One, the expense for which is allocated as part of the Master Services Agreement. Management has reviewed the Master Services Agreement and concluded that this contract does not contam any leases under the scope of ASU 2016-02-Leases (Topic 842)
The Company has a revolvmg subordmated lme of credit with Capital One for an amount not to exceed \$250,000,000 as of December 31, 2024. This lme of credit exp1res on November 16, 2026. Dunng 2024 and 2023, the Company had no borrowings under the line of credit. This lme of credit bears mterest at an agreed upon rate per the terms of the agreement.
The Company has a unilateral revolvmg line of credit with Capital One for an amount not to exceed \$500,000,000. Dunng 2024, the Company made seven borrowings on the revolvmg lme of credit totaling \$1,437,266,041 and fully repaid the borrowings during 2024 Dunng 2023, the Company made one borrowmg on the revolvmg lme of credit totalmg \$165,027,335 and fully repaid the b01Towmg during 2023.
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(A Wholly Owned Subsidiary of Capital One Fmancial Corporat10n)
#### Notes to Financial Statements ( contmued)
#### **Note 6--Commitments and Contingencies**
The Company has outstandmg undeiwntmg agreements which commit 1t to purchase secunt1es at specified future dates and pnces. The Company presells such issues to manage nsk exposure related to these off-balance sheet commitments. Transactions that were open at December 31, 2024, have subsequently settled and had no material effect on the accompanymg statements of financial cond1t10n.
From time to time, the Company 1s mvolved m ht1gat10n that 1t considers to be mc1dental to its busmess. The Company is not presently involved m any legal proceedmgs wluch management expects md1v1dually or m the aggregate to have a matenal adverse effect on its financial condit10n or results of operations
The Company has contracts with its vendors for vanous services The followmg table presents the m1rnmum commitments under these contracts as of December 31, 2024.
| | Amounts |
|--------------------------------------|-----------------------------------|
| Fiscal year expected to be expensed: | |
| 2025
. | \$
1,212,868 |
| 2026 . | 331 995 |
| Total | \$
1,544,863
============== |
Management has reviewed these vanous vendor contracts and has concluded that they do not contain any leases under the scope of ASU 2016-02- Leases (Topic 842)
#### **Note 7-Services Agreement**
The Company has an agreement with Pershmg, L.L.C. ("Pershmg"), a Bank of New York Secunhes G10up Company, to provide certain services as cleaung correspondent These services mclude carrymg customers' cash and margm accounts on a fully-disclosed basis; executmg transactions m the customers' accounts as instructed by the Company; preparing transact10n confirmat10ns and monthly statements for customers; settlmg contracts and transactions m secunties on behalf of the Company, performmg cashiering funct10ns for customer accounts mcludmg receipt and delivery of secunties purchased, sold, borrowed and loaned; providmg custody and safekeepmg of customers' secunties and cash; and handling margin accounts, dividends, exchanges and nghts and tender offers.
This agreement does not have an expirat10n date. This agreement reqmres the Company to maintam a clearmg deposit with Pershmg which totaled \$250,000 at December 31, 2024 and 2023.
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(A Wholly Owned Subsidiary of Capital One Fmancial Corporation)
#### Notes to Financial Statements ( continued)
The Company acts as an mtroducmg broker and substantially all customer transactions are cleared and carried on a fully disclosed basts. The Company is exposed to credit losses on unsettled transactions m the event of nonperfonnance by its customers. This nsk of loss is hmited to the change in the secunty pnce between the trade date and the settlement date. The Company did not incur any matenal credit losses on transactions not settled as of December 31, 2024 and 2023.
The Company's commiss10ns receivable from cleanng c01Tespondent represents amounts on deposit with Pershing. Additionally, as the Company clears all of its transactions through the clearmg conespondent, the Company 1s exposed should the cleanng correspondent be unable to fulfill its obhgat10ns.
#### **Note 8-Liabilities Subordinated to Claims of General Creditors**
The Company 1s subject to the Securities and Exchange Commission's Rule 17a-5 regarding reports to be made by certam exchange members, brokers and dealers. Under this rnle, the Company 1s reqmred to disclose liabilities subordinated to the claims of general creditors. The Company has subordinated loan agreements with Capital One which have been approved by the FINRA These loan agreements constitute part of the Company's net capital under the Uniform Net Capital Rule and may be repaid only 1f, after giving effect to such repayment, the Company contmues to meet its mimmum net capital requirements At December 31, 2024 and 2023, the Company had no balances outstandmg from these agreements as disclosed m Note 5.
#### **Note 9-Indemnifications**
The Company has ce1 tain obhgat10ns to indemnify its managers and officers for certam events or occurrences while the managers or officers are, or were servmg, at the Company's request in such capacities. The maximum liability under these obligations is unlimited; however, the Company's insurance policies serve to limit its exposure.
## **Note 10-Financial Instruments with Off-Balance Sheet Risk**
As a secunt1es broker, the Company is engaged m buymg and sellmg secunttes as an agent for a diverse g1oup of individuals and mstitutional investors The Company introduces these transact10ns for clearance to another firm on a fully-disclosed basis. The agreement between the Company and its clearing correspondent provides that the Company 1s obligated to assume any exposure related to nonperformance by its customers. If any transactions do not settle, the Company may mcur a loss 1f the market value of the secunty is different from the contract value of the transaction.
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(A Wholly Owned Subsidiary of Capital One Fmancial Corporation)
#### Notes to Fmancial Statements ( continued)
The Company momtors its customer activity by rev1ewmg mf01mat10n 1t receives from its cleanng correspondent on a daily basis, requmng customers to deposit addit10nal collateral, or reduce posit10ns when necessaiy
The Company does not anticipate nonperfmmance by customers or counterpartles m the above situat10ns. The Company's policy 1s to rnomtor its market exposure and counterparty risk and to review, as necessary, the credit standmg of each counterparty and customer with which 1t conducts busmess.
#### **Note 11-Regulatory Requirements**
The Company 1s subject to the Secunties and Exchange Comrniss10n Unifonn Net Capital Rule 15c3-1, which reqmres the mamtenance of mm1mum net capital and reqmres that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 At December 31, 2024, the Company had net capital of \$311,822,337 which was \$310,538,225 m excess of the required mmnnum net capital of \$1,284,112 The Company's net capital rat10 was O 06 to 1.
The Company has no obligation under Rule 15c3-3 to prepare the Computation for Determination of Reserve Reqmrements Pursuant to Rule 15c3-3.
## **Note 12-Subsequent Events**
In accordance with U.S. GAAP, the Company evaluates subsequent events that have occmTed after the statement of financial condition date but before the financial statements are issued. There are two types of subsequent events· (1) recognized, or those that provide additional evidence about cond1t10ns that existed at the date of the statement of financial cond1t10n, mcludmg estimates mherent in the process of prepanng financial statements, and (2) nonrecogmzed, or those that provide evidence about cond1t10ns that did not exist at the date of the statement of financial condit10n but arose after that date. The Company evaluated subsequent events through Februaiy 4, 2025, the date the financial statements were issued
Based on the evaluation, the Company did not 1dent1fy any recogmzed or nonrecogmzed subsequent events that would have required adjustment to the financial statements
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.