# STONEX FINANCIAL INC. X-17A-5 (2023-11-29) — Broker-dealer annual report

- Company: STONEX FINANCIAL INC.
- Form: X-17A-5
- Filed: 2023-11-29
- Period: 2023-09-30
- Accession: 0001070092-23-000028
- CIK: 1070092
- File #: 8-51269
- Type: Broker-dealer
- Material weakness: No
- Auditor: KPMG LLP
- Auditor location: KANSAS CITY, MO
- Contact: STEVE PTASINSKI
- Phone: 312-841-1000
- Signed by: William J. Dunaway (CHIEF FINANCIAL OFFICER)

Original filing: https://www.sec.gov/Archives/edgar/data/1070092/000107009223000028/docx17a5public.pdf

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# STONEX FINANCIAL INC.

(A Wholly Owned Subsidiary of StoneX Group Inc.)

Statement of Financial Condition

September 30, 2023

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

ANNUAL AUDITED REPORT FORM X-17A-5 PART III

| OMB APPROVAL                                                                                                                                                                                                    |  |  |  |  |  |
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| OMB Number: 3235-0123                                                                                                                                                                                           |  |  |  |  |  |
| Expires: October 31, 2023                                                                                                                                                                                       |  |  |  |  |  |
| Estimated average burden                                                                                                                                                                                        |  |  |  |  |  |
| . 12.00<br>hours per response<br>COTT CONTRICT CONSULTION CONSULTION CONSULTION CONSULTION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLU |  |  |  |  |  |
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| MAALETT A REPLACE FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR<br>SEC FILE NUMBER |  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| 8-51269                                                                                                                                                                                          |  |

FACING PAGE

Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder

|                                                                     | REPORT FOR THE PERIOD BEGINNING  | 10/01/2022                                                               | AND ENDING                                                                            | 09/30/2023                     |  |  |  |
|---------------------------------------------------------------------|----------------------------------|--------------------------------------------------------------------------|---------------------------------------------------------------------------------------|--------------------------------|--|--|--|
|                                                                     |                                  | MM/DD/YY                                                                 |                                                                                       | MM/DD/YY                       |  |  |  |
| A. REGISTRANT IDENTIFICATION                                        |                                  |                                                                          |                                                                                       |                                |  |  |  |
| NAME OF BROKER-DEALER: STONEX FINANCIAL INC. (CRD # 45993)          |                                  |                                                                          |                                                                                       | OFFICIAL USE ONLY              |  |  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)   |                                  |                                                                          | FIRM I.D. No.                                                                         |                                |  |  |  |
|                                                                     | 329 PARK AVENUL NORTH, SUITE 350 |                                                                          |                                                                                       |                                |  |  |  |
|                                                                     |                                  | (No. and Street)                                                         |                                                                                       |                                |  |  |  |
|                                                                     | WINTER PARK                      | FLORIDA                                                                  | 32789                                                                                 |                                |  |  |  |
|                                                                     | (City)                           | (State)<br>WILLIAM J, DUNAWAY, CHIEF FINANCIAL OFFICER                   | (Zip Code)<br>NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | 816-410-7129                   |  |  |  |
|                                                                     |                                  |                                                                          |                                                                                       | (Arca Code - Telephone Number) |  |  |  |
|                                                                     | KPMG LLP                         | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* |                                                                                       |                                |  |  |  |
|                                                                     |                                  | (Name - if individual, state last, first, middle name)                   |                                                                                       |                                |  |  |  |
|                                                                     | 1000 WALNUT STREET               | KANSAS CITY                                                              | MISSOURT                                                                              | 64106                          |  |  |  |
| (Address)                                                           |                                  | (City)                                                                   | (State)                                                                               | (Zip Code)                     |  |  |  |
| CHECK ONE:                                                          |                                  |                                                                          |                                                                                       |                                |  |  |  |
| ×                                                                   | Certified Public Accountant      |                                                                          |                                                                                       |                                |  |  |  |
|                                                                     | Public Accountant                |                                                                          |                                                                                       |                                |  |  |  |
| Accountant not resident in United States or any of its possessions. |                                  |                                                                          |                                                                                       |                                |  |  |  |
|                                                                     |                                  | FOR OFFICIAL USE ONLY                                                    |                                                                                       |                                |  |  |  |
|                                                                     |                                  |                                                                          |                                                                                       |                                |  |  |  |
|                                                                     |                                  |                                                                          |                                                                                       |                                |  |  |  |
|                                                                     |                                  |                                                                          |                                                                                       |                                |  |  |  |

\*Clains for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(c)(2)

> Potential 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.

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## OATH OR AFFIRMATION

|                                                                                                                | WILLIAM J. DUNAWAY                                          |  | _, swear (or affirm) that, to the best of                                                                       |  |  |
|----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|--|-----------------------------------------------------------------------------------------------------------------|--|--|
|                                                                                                                |                                                             |  | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of |  |  |
|                                                                                                                | STONEX FINANCIAL INC.                                       |  | - as                                                                                                            |  |  |
| ot                                                                                                             | SEPTEMBER 30                                                |  | , 2023 _ , are true and correct. I further swear (or affirm) that                                               |  |  |
| neither the company nor any partner, principal officer or director has any proprietary interest in any account |                                                             |  |                                                                                                                 |  |  |
|                                                                                                                | classified solely as that of a customer, except as follows: |  |                                                                                                                 |  |  |
|                                                                                                                |                                                             |  |                                                                                                                 |  |  |
|                                                                                                                |                                                             |  |                                                                                                                 |  |  |

Signature HIEF FINANCIAL OFFICER ASHLEY HERNANDE Title Notary Public - Notary Seal Clay County - State of Missourf My Commission Expires Nov 14, 2025

Notary Public

- This report \*\* contains (check all applicable boxes):
- [x] (a) Facing Page.
- [X] (b) Statement of Financial Condition.
	- (c) Statement of Income (Loss).
	- (d) Statement of Changes in Financial Condition.
	- (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
	- (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
- [x] (g) Computation of Net Capital.
- 区 (h) Notes to Financial Statements.
- 12 (i) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
- [2] (j) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
	- (k) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
	- (1) A Reconciliation between the audited Statements of Financial Condition with respect to methods of consolidation.
- 18 (m) An Oath or Affirmation.
	- (n) A copy of the SIPC Supplemental Report.
	- (o) A report describing any material inadequacies found to have existed since the date of the previous audit. (p) Independent Auditors' Report on Internal Accounting Control
- 12 (q) Schedule of Segregation Requirements and Funds in Segregation Customers' Regulated Commodity Futures Accounts Pursuant to CFTC Rule 1.10(d)2(iv).

\*\* For conditions of confidential treatment of certain portions of this filing, see section 240.170-5(e){3}.

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KPMG LLP Suite 1100 1000 Walnut Street Kansas City, MO 64106-2162

## Report of Independent Registered Public Accounting Firm

To the Stockholder and the Board of Directors StoneX Financial Inc .:

#### Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of StoneX Financial Inc. (the Company) as of September 30, 2023, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of September 30, 2023, in conformity with U.S. generally accepted accounting principles.

#### Basis for Opinion

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company's auditor since 2010.

Kansas City, Missouri November 29, 2023

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# StoneX Financial Inc. Statement of Financial Condition September 30, 2023 (Amounts in thousands, except par value and share amounts)

| Assets                                                                                                                                                  |   |            |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|---|------------|
| Cash and cash equivalents                                                                                                                               | S | 74,022     |
| Cash, securities, and other assets segregated under federal regulations (including \$5,739 at fair<br>value)                                            |   | 971,022    |
| Collateralized securities financing assets                                                                                                              |   | 4,079,274  |
| Deposits with and receivables from broker-dealers, clearing organizations and counterparties, net<br>(including \$4,463,803 at fair value)              |   | 6,125,858  |
| Receivables from clients, net                                                                                                                           |   | 350,560    |
| Securities owned, at fair value (including \$1,458,605 of securities pledged as collateral that the<br>counterparty has the right to sell or repledge ) |   | 4,678,329  |
| Exchange and clearing organization memberships and stock, at cost                                                                                       |   | 7,057      |
| Deferred income taxes, net                                                                                                                              |   | 6,472      |
| Property and equipment, net                                                                                                                             |   | 7,744      |
| Operating lease right of use assets                                                                                                                     |   | 2,175      |
| Goodwill and intangible assets, net                                                                                                                     |   | 15,302     |
| Due from affiliates                                                                                                                                     |   | 1,405      |
| Other assets                                                                                                                                            |   | 56,901     |
| Total assets                                                                                                                                            |   | 16,376,121 |

Liabilities and Stockholder's Equity

| Liabilities:                                                                                 |   |            |
|----------------------------------------------------------------------------------------------|---|------------|
| Payables to:                                                                                 |   |            |
| Clients (including \$452,283 at fair value)                                                  | S | 6,853,543  |
| Broker-dealers, clearing organizations and counterparties (including \$16,144 at fair value) |   | 166,626    |
| Affiliates                                                                                   |   | 38,969     |
| Accounts payable and accrued expenses                                                        |   | 145,851    |
| Operating lease liabilities                                                                  |   | 2,187      |
| Collateralized securities financing liabilities                                              |   | 5,636,143  |
| Securities sold, not yet purchased, at fair value                                            |   | 2,787,771  |
| Income taxes payable to StoneX Group Inc.                                                    |   | 76.971     |
| Total liabilities                                                                            |   | 15,708,061 |
|                                                                                              |   |            |

Commitments and contingencies (note 12)

Stockholder's equity:

| Common stock, \$0.01 par value. Authorized 10,000 shares; issued and outstanding 1,000 shares |               |
|-----------------------------------------------------------------------------------------------|---------------|
| Additional paid-in capital                                                                    | 562.684       |
| Retained earnings                                                                             | 105,376       |
| Total stockholder's equity                                                                    | 668,060       |
| Total liabilities and stockholder's equity                                                    | \$ 16,376,121 |

See accompanying notes to the statement of financial condition.

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{6}------------------------------------------------

#### c. Foreign Currency Remeasurement

Assets and liabilities denominated in foreign currencies are converted into U.S. dollars at exchange rates in effect at the close of business on September 30, 2023.

#### d. Cash and Cash Equivalents

Cash and cash equivalents include unrestricted cash held at banks and not deposited with or pledged to broker-dealers, clearing organizations, and counterparties, or segregated under federal regulations.

## e. Cash, Securities and Other Assets Segregated Under Federal Regulations

Pursuant to requirements of the Commodity Exchange Act and Commission Regulation 30.7 ("Section 30.7"), funds deposited by clients relating to futures, options on futures, and cleared swaps contracts in regulated commodities must be carried in separate accounts, which are designated as segregated client accounts. The deposits in segregated client accounts are maintained for the exclusive benefit of clients and are not commingled with the Company's funds.

In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934 ("Rule 15c3-3"), the Company maintains separate accounts for the benefit of securities clients and proprietary accounts of broker dealers ("PABs" or "PAB"). Rule 15c3-3 requires the Company to maintain special reserve bank accounts ("SRBAs") for the exclusive benefit of securities clients and PABs.

At September 30, 2023, cash, securities and other assets segregated under federal regulations consisted of the following (see additional fair value disclosures in Note 5) (in thousands):

Cash held in SRBAs for the benefit of securities clients and PABs under Rule 15c3-3 \$ Assets segregated and secured under Section 4d(2) and 4d(f) of the Commodity Exchange Act and Commission Regulation 30.7:

| Cash                                                                    | 947.311    |
|-------------------------------------------------------------------------|------------|
| Commodities warehouse receipts                                          | 5.739      |
| Cash, securities, and other assets segregated under federal regulations | \$ 971 022 |

#### f. Collateralized Transactions

The Company enters into securities purchased under agreements to resell ("reverse repurchase agreements"), securities sold under agreements to repurchase agreements"), securities borrowed transactions, and securities loaned transactions principal debt trading, acquire securities to cover short positions, acquire securities for settlement, or meet counterparty needs under matched-booked trading strategies.

These transactions are accounted for as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. These transactions are reported gross, except when a right of offset exists. See Note 7 for more details.

## g. Deposits with and Receivables from and Payables to Brokers, Clearing Organizations and Counterparties, net

Deposits with clearing organizations primarily include securities pledged to clearing organizations along with deposits made to satisfy clearing organization margin requirements on client and proprietary open futures and options on futures positions, as well as to satisfy the requirements set by clearing exchanges for clearing membership.

{7}------------------------------------------------

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{8}------------------------------------------------

Deposits with and receivables from broker-dealers, clearing organizations and counterparties are reported gross, except where a right of set-off exists, as are payables to broker-dealers, clearing organizations and counterparties.

As of September 30, 2023, the Company did not have an allowance for doubtful accounts included in deposits with and receivables from broker-dealers, clearing organizations and counterparties, net.

As of September 30, 2023, deposits with and receivables from and payables to broker-dealers, clearing organizations and counterparties consisted of the following (see additional fair value disclosures in Note 5) (in thousands):

| Deposits and receivables:                                                                             |      |           |
|-------------------------------------------------------------------------------------------------------|------|-----------|
| Cash margin, including accrued interest, on deposit with clearing<br>organizations                    | ಕಿ   | 1,127,684 |
| Securities pledged to clearing organizations                                                          |      | 3,969,698 |
| Exchange settlements due from clearing organizations                                                  |      | 61,948    |
| Clearing organization guaranty deposits                                                               |      | 131,349   |
| Net option values due from clearing organizations and other counterparties                            |      | 452,282   |
| Cash margin on deposit with registered FCMs and amounts held by members<br>of foreign boards of trade |      | 142,413   |
| Cash margin on deposit with securities clearing firms and organizations                               |      | 156,805   |
| Receivables from securities introducing broker-dealers, net                                           |      | 15,621    |
| Securities failed-to-deliver                                                                          |      | 26,213    |
| To be announced ("TBA") and forward settling securities                                               |      | 41,822    |
| Other                                                                                                 |      | 23        |
|                                                                                                       | S    | 6,125,858 |
| Payables:                                                                                             |      |           |
| Broker-dealers, and clearing organizations and counterparties on unsettled<br>trades                  | S    | 80,440    |
| Securities failed-to-receive                                                                          |      | 69,354    |
|                                                                                                       |      |           |
| TBA and forward settling securities                                                                   |      | 16,143    |
| Other                                                                                                 |      | 689       |
|                                                                                                       | ಕ್ಕಿ | 166,626   |

#### h. Receivables from and Payables to clients

Receivables from clients, net includes the total of net deficits in individual exchange-traded futures and option on futures, as well as exchange-cleared swaps trading accounts carried by the Company and amounts due from other services provided to the Company's client deficits arise from realized and unrealized trading losses on futures, options on futures, cleared swaps, and amounts due on cash and margin transactions. Client deficit accounts are reported gross of client accounts that contain net credit or positive balances, except where a right of set-off exists. Net deficits in individual trading accounts include both secured and unsecured deficit balances due from clients as of the statement of financial condition date. Exchange-traded futures and options on futures secured deficit amounts of \$9,505,049 are secured by U.S. Treasury securities as of September 30, 2023.

Receivables from clients, net include amounts receivable from non-broker-dealer clients for failsto-deliver.

{9}------------------------------------------------

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{10}------------------------------------------------

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{11}------------------------------------------------

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{12}------------------------------------------------

#### p.

The Company did not adopt any new accounting standards during the year ended September 30, 2023.

#### Subsequent Events q.

Management evaluated events and transactions through November 29, 2023, which is the date the financial statement was issued, for potential recognition or disclosure herein and has determined that no additional disclosures or adjustments are required.

{13}------------------------------------------------

#### Note 2 - Net Capital Requirements

The Company is a broker-dealer subject to the SEC Uniform Net Capital Rule 15c3-1, which requires maintaining minimum net capital. The Company is a registered FCM and also subject to the net capital requirements of the CFTC Regulation 1.17. Under the more restrictive of these rules, the Company is required to maintain "adjusted net capital", equivalent to the greater of \$1,500,000 or 8 percent of customer and noncustomer maintenance margin requirements on all positions, as these terms are defined.

The Company, as a securities clearing broker, may only include assets in proprietary accounts as allowable assets in its net capital computation when the introducing broker and the Company have PAB agreements.

Adjusted net capital and the related net capital requirement may fluctuate on a daily basis. Net capital requirements prohibit paying dividends to the Parent, when such payment would reduce the Company's net capital below required levels. In certain circumstances, dividend payments to the Parent may require regulatory notification or authorization prior to payment.

The Company's adjusted net capital and minimum net capital requirement as of September 30, 2023 were as follows (in thousands):

| Net capital                     | 352.968 |
|---------------------------------|---------|
| Minimum net capital requirement | 220.530 |
| Excess net capital              | 132,438 |

#### Note 3 - Segregated and Secured Requirements

Pursuant to requirements of the Commodity Exchange Act and Commission Regulation 30.7, funds deposited by clients of the Company relating to futures, options on futures, and cleared swaps in regulated commodities must be carried in separate accounts maintained for the exclusive benefit of clients. Certain amounts in the accompanying tables reflect reclassifications and eliminations required for regulatory filing and, as a result, may differ from those presented in the statement of financial condition.

Funds deposited by clients and other assets, which have been segregated, pursuant to Commodity Exchange Act 4d(2), as belonging to the exchange traded futures and options on futures commodity clients as of September 30, 2023 are as follows (in thousands):

| Cash, at banks - segregated                                                                                 | S | 807,986   |
|-------------------------------------------------------------------------------------------------------------|---|-----------|
| Deposits with and receivables from exchange-clearing organizations, including derivatives<br>and securities |   | 5,352,511 |
| Commodities warehouse receipts                                                                              |   | 5,739     |
| Total amount in segregation                                                                                 |   | 6,166,236 |
| Amount required to be segregated                                                                            |   | 6,091,910 |
| Excess funds in segregation                                                                                 |   | 74.326    |
| Management target amount for excess funds in segregation                                                    |   |           |
| Excess funds in segregation over management target                                                          |   |           |

{14}------------------------------------------------

Funds deposited by clients and other assets, which are held in separate accounts, pursuant to Commission Regulation 30.7, for clients trading foreign futures and foreign options on futures on foreign commodity exchanges or boards of trade, as of September 30, 2023 are as follows (in thousands):

| Cash, at banks - secured                                                                   | S | 139,325 |
|--------------------------------------------------------------------------------------------|---|---------|
| Cash deposited with registered futures commission merchants and unrealized gain on futures |   |         |
| positions                                                                                  |   | 11,855  |
| Amounts held by clearing organizations of foreign boards of trade, including derivatives   |   | 3,136   |
| Amounts held by members of foreign boards of trade, including derivatives                  |   | 106,720 |
| Total amount in secured funds                                                              |   | 261,036 |
| Amount required to be set aside in separate Section 30.7 accounts                          |   | 248,974 |
| Excess set aside for secured amount                                                        |   | 12,062  |
| Management target amount for excess funds in separate Section 30.7 accounts                |   | 6.00    |
| Excess funds in separate Section 30.7 accounts over management target                      |   |         |

Funds deposited by clients and other assets, which have been segregated, pursuant to Commodity Exchange Act 4d(f), as belonging to the cleared swap commodity clients as of September 30, 2023 are as follows (in thousands):

| Cash, at banks - segregated                                        |  |
|--------------------------------------------------------------------|--|
| Deposits with and receivables from exchange-clearing organizations |  |
| Total amount in cleared swaps segregation                          |  |
| Amount required to be segregated                                   |  |
| Excess funds in segregation                                        |  |
| Management target amount for excess funds in segregation           |  |
| Excess funds in segregation over management target                 |  |

# Note 4 - Customer and Proprietary Accounts of Broker Dealers Reserve Requirements

The Company, in its capacity as a securities clearing broker-dealer, clears transactions for clients and certain PABs. The Company prepared reserve computations for the client accounts and PAB accounts, in accordance with the customer reserve computation guidelines set forth in Rule 15c3-3.

Based upon these computations, excess of total credits over total debits was \$4,261,000 as of September 30, 2023. The Company held \$13,815,000 in customer SRBAs as of September 30, 2023, and met the customer segregation and segregated deposit timing requirements of Rule 15c3-3.

The total PAB credits over total PAB debits was \$6,899,000 as of September 30, 2023, and the total PAB reserve requirement was \$6,899,000 as of September 30, 2023. The Company held \$4,157,000 in the PAB SRBA as of September 30, 2023, and made additional deposits of \$3,742,000 on October 3, 2023, to meet the PAB segregation and segregated deposit timing requirements of Rule 15c3-3.

# Note 5 - Fair Value of Financial and Nonfinancial Assets and Liabilities

Fair value is defined by U.S. GAAP as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants on the measurement date.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company is required to develop a set of assumptions that reflect those that market participants would use in pricing an

{15}------------------------------------------------

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FPN`]T\_TP^ ZbYPO LYO ^ZWO L]P []TXL]TWd aLW`PO `^TYR \_ST]O'[L]\_d []TNTYR aPYOZ]^( GST]O'[L]\_d []TNTYR aPYOZ]^ NZX[TWP []TNP^ Q]ZX aL]TZ`^ ^Z`]NP^ LYO ZQ\_PY L[[Wd XL\_]Tc []TNTYR QZ] ^TXTWL] ^PN`]T\_TP^ bSPY XL]VP\_' ZM^P]aLMWP \_]LY^LN\_TZY^ QZ] \_SP TY^\_]`XPY\_^ L]P YZ\_ ZM^P]aLMWP QZ] ^`M^\_LY\_TLWWd \_SP Q`WW \_P]X( GSP 7ZX[LYd ]PaTPb^ \_SP []TNTYR XP\_SZOZWZRTP^ `^PO Md \_SP \_ST]O'[L]\_d []TNTYR aPYOZ]^ TY Z]OP] \_Z PaLW`L\_P \_SP QLT] aLW`P STP]L]NSd NWL^^TQTNL\_TZY ZQ aPYOZ]'[]TNPO QTYLYNTLW TY^\_]`XPY\_^ LYO \_SP LNN`]LNd ZQ aPYOZ] []TNTYR& bSTNS \_d[TNLWWd TYaZWaP^ \_SP NZX[L]T^ZY ZQ []TXL]d aPYOZ] []TNP^ \_Z TY\_P]YLW \_]LOP] []TNP^ LYO ^PNZYOL]d aPYOZ] []TNP^( JSPY PaLW`L\_TYR \_SP []Z[]TP\_d ZQ aPYOZ]'[]TNPO QTYLYNTLW TY^\_]`XPY\_^ `^TYR ^PNZYOL]d []TNP^& NZY^TOP]L\_TZY^ TYNW`OP \_SP ]LYRP LYO \`LWT\_d ZQ aPYOZ] []TNP^& WPaPW ZQ ZM^P]aLMWP \_]LY^LN\_TZY^ QZ] TOPY\_TNLW LYO ^TXTWL] TY^\_]`XPY\_^& LYO U`ORXPY\_^ ML^PO `[ZY VYZbWPORP ZQ L [L]\_TN`WL] XL]VP\_ LYO L^^P\_ NWL^^( >Q \_SP []TXL]d aPYOZ] []TNP OZP^ YZ\_ ]P[]P^PY\_ QLT] aLW`P& U`^\_TQTNL\_TZY QZ] `^TYR L ^PNZYOL]d []TNP& TYNW`OTYR ^Z`]NP OL\_L `^PO \_Z XLVP \_SP OP\_P]XTYL\_TZY& T^ ^`MUPN\_ \_Z ]PaTPb LYO L[[]ZaLW Md L`\_SZ]TePO [P]^ZYYPW []TZ] \_Z `^TYR L ^PNZYOL]d []TNP( FPN`]T\_TP^ ZbYPO LYO ^ZWO \_SL\_ L]P aLW`PO `^TYR \_ST]O'[L]\_d []TNTYR ^Z`]NP^ L]P TYNW`OPO bT\_STY PT\_SP] @PaPW \* Z] @PaPW + ZQ \_SP QLT] aLW`P STP]L]NSd ML^PO `[ZY \_SP ZM^P]aLMTWT\_d ZQ \_SP TY[`\_^ `^PO LYO \_SP WPaPW ZQ LN\_TaT\_d TY \_SP XL]VP\_(

GSP QLT] aLW`P P^\_TXL\_P^ []P^PY\_PO SP]PTY L]P ML^PO ZY [P]\_TYPY\_ TYQZ]XL\_TZY LaLTWLMWP \_Z XLYLRPXPY\_ L^ ZQ FP[\_PXMP] ,)& +)+,( 5W\_SZ`RS XLYLRPXPY\_ T^ YZ\_ LbL]P ZQ LYd QLN\_Z]^ \_SL\_ bZ`WO ^TRYTQTNLY\_Wd LQQPN\_ \_SP P^\_TXL\_PO QLT] aLW`P LXZ`Y\_^& ^`NS LXZ`Y\_^ SLaP YZ\_ MPPY NZX[]PSPY^TaPWd ]PaLW`PO QZ] [`][Z^P^ ZQ \_ST^ QTYLYNTLW ^\_L\_PXPY\_ ^TYNP \_SL\_ OL\_P( 7`]]PY\_ P^\_TXL\_P^ ZQ QLT] aLW`P XLd OTQQP] ^TRYTQTNLY\_Wd Q]ZX \_SP LXZ`Y\_^ []P^PY\_PO SP]PTY(

{17}------------------------------------------------

The following table summarizes the Company's assets and liabilities recorded at fair value on a recurring basis as of September 30, 2023, by level within the fair value hierarchy (in thousands):

|                                                                                                         | September 30, 2023 |                           |         |                            |                  |  |  |
|---------------------------------------------------------------------------------------------------------|--------------------|---------------------------|---------|----------------------------|------------------|--|--|
|                                                                                                         | Level 1            | Level 2                   | Level 3 | Netting                    | Total            |  |  |
| Assets:                                                                                                 |                    |                           |         |                            |                  |  |  |
| Commodities warehouse receipts                                                                          | S<br>5,739         | ಕಿ                        | ಕಾ      | S                          | ക<br>5,739       |  |  |
| Securities and other assets segregated<br>under federal regulations                                     | 5,739              |                           |         |                            | 5,739            |  |  |
| ETFs                                                                                                    | 156                |                           |         |                            | 156              |  |  |
| U.S. Treasury obligations                                                                               | 3,969,542          |                           |         |                            | 3,969,542        |  |  |
| TBA and forward settling securities                                                                     |                    | 73,490                    |         | (31,668)                   | 41,822           |  |  |
| Derivatives                                                                                             | 5,400,948          |                           |         | (4,948,665)                | 452,283          |  |  |
| Deposits with and receivables from<br>broker-dealers, clearing organizations<br>and counterparties, net | 9,370,646          | 73,490                    |         | (4,980,333)                | 4,463,803        |  |  |
| Equity securities                                                                                       | 323,987            | 10,314                    |         |                            | 334,301          |  |  |
| Corporate and municipal bonds                                                                           |                    | 284,187                   |         |                            | 284,187          |  |  |
| Agency mortgage-backed obligations                                                                      |                    | 2,865,828                 |         |                            | 2,865,828        |  |  |
| Asset-backed obligations                                                                                |                    | 138,752                   |         |                            | 138,752          |  |  |
| U.S. Treasury obligations                                                                               | 493,480            |                           |         |                            | 493,480          |  |  |
| U.S. government agency obligations                                                                      |                    | 451,733                   |         |                            | 451,733          |  |  |
| Foreign government obligations                                                                          | 43,340             |                           |         |                            | 43,340           |  |  |
| Commodities warehouse receipts                                                                          | 54,688             |                           |         |                            | 54,688           |  |  |
| Exchange firm common stock                                                                              | 12,020             |                           |         |                            | 12,020           |  |  |
| Securities owned, at fair value                                                                         | 927,515            | 3,750,814                 |         |                            | 4,678,329        |  |  |
| Total assets at fair value                                                                              | \$10,303,900       | \$3,824,304               | S       | \$ (4,980,333)             | \$9,147,871      |  |  |
| Liabilities:                                                                                            |                    |                           |         |                            |                  |  |  |
| Payables to clients - derivatives                                                                       | \$5,400,948        | ക                         | ಕಿತ     | \$ (4,948,665)             | સ્ત્ર<br>452,283 |  |  |
| TBA and forward settling securities                                                                     |                    | 47,505                    |         | (31,361)                   | 16,144           |  |  |
| Payables to broker-dealers, clearing<br>organizations and counterparties                                |                    | 47,505                    |         | (31,361)                   | 16,144           |  |  |
| Equity securities                                                                                       | 230,603            | 5,547                     |         |                            | 236,150          |  |  |
| Corporate and municipal bonds                                                                           |                    | 81,638                    |         |                            | 81,638           |  |  |
| Agency mortgage-backed obligations                                                                      |                    | 31.740                    |         |                            | 31,740           |  |  |
| U.S. Treasury obligations                                                                               | 2.409.299          |                           |         |                            | 2,409,299        |  |  |
| U.S. government agency obligations                                                                      |                    | ર,055                     |         |                            | ર,055            |  |  |
| Foreign government obligations                                                                          | 21,528             |                           |         |                            | 21,528           |  |  |
| Derivatives                                                                                             | 2,361              |                           |         |                            | 2,361            |  |  |
| Securities sold, not vet purchased, at<br>fair value                                                    | 2,663,791          | 123,980                   |         |                            | 2,787,771        |  |  |
| Total liabilities at fair value                                                                         |                    | \$8.064.739 \$ 171.485 \$ |         | \$ (4.980.026) \$3.256.198 |                  |  |  |

#### Note 6 - Financial Instruments with Off Statement of Financial Condition Risk

The Company is a party to financial instruments in the normal course of execution, settlement, and financing of client trading accounts in various securities and exchange-traded derivative instruments. These instruments are primarily the execution of orders for securities and commodity futures and options on

{18}------------------------------------------------

Q`\_`]P^ NZY\_]LN\_^& bSTNS L]P \_]LY^LN\_PO ZY L NL^S Z] XL]RTY ML^T^( GSP^P LN\_TaT\_TP^ XLd Pc[Z^P \_SP 7ZX[LYd \_Z ZQQ'^\_L\_PXPY\_ ZQ QTYLYNTLW NZYOT\_TZY ]T^V TY \_SP PaPY\_ \_SP NWTPY\_ Z] Z\_SP] M]ZVP] T^ `YLMWP \_Z Q`WQTWW T\_^ NZY\_]LN\_`LW ZMWTRL\_TZY^ LYO \_SP 7ZX[LYd SL^ \_Z [`]NSL^P Z] ^PWW \_SP QTYLYNTLW TY^\_]`XPY\_ `YOP]WdTYR \_SP NZY\_]LN\_ L\_ L WZ^^( AL]RTY \_]LY^LN\_TZY^ XLd Pc[Z^P \_SP 7ZX[LYd \_Z ^TRYTQTNLY\_ N]POT\_ ]T^V TY \_SP PaPY\_ XL]RTY ]P\`T]PXPY\_^ L]P YZ\_ ^`QQTNTPY\_ \_Z ZQQ^P\_ WZ^^P^ bSTNS NWTPY\_^ XLd TYN`]( GSP 7ZX[LYd XLYLRP^ \_SP ]T^V^ L^^ZNTL\_PO bT\_S \_SP^P \_]LY^LN\_TZY^ Md ]P\`T]TYR NWTPY\_^ \_Z XLTY\_LTY XL]RTY OP[Z^T\_^ TY NZX[WTLYNP bT\_S aL]TZ`^ ]PR`WL\_Z]d ]P\`T]PXPY\_^& TYOTaTO`LW PcNSLYRP ]PR`WL\_TZY^& LYO TY\_P]YLW R`TOPWTYP^( GSP 7ZX[LYd XZYT\_Z]^ ]P\`T]PO XL]RTY WPaPW^ OLTWd LYO& \_SP]PQZ]P& XLd ]P\`T]P NWTPY\_^ \_Z OP[Z^T\_ LOOT\_TZYLW NZWWL\_P]LW Z] ]PO`NP [Z^T\_TZY^ bSPY YPNP^^L]d( GSP 7ZX[LYd LW^Z P^\_LMWT^SP^ XL]VP\_ WTXT\_^ QZ] NWTPY\_^& bSTNS L]P XZYT\_Z]PO OLTWd( GSP 7ZX[LYd PaLW`L\_P^ PLNS NWTPY\_i^ N]POT\_bZ]\_STYP^^ ZY L NL^P'Md'NL^P ML^T^( 7WPL]TYR& QTYLYNTYR& LYO ^P\_\_WPXPY\_ LN\_TaT\_TP^ XLd ]P\`T]P \_SP 7ZX[LYd \_Z XLTY\_LTY Q`YO^ bT\_S Z] [WPORP ^PN`]T\_TP^ L^ NZWWL\_P]LW bT\_S Z\_SP] QTYLYNTLW TY^\_T\_`\_TZY^( <PYP]LWWd& \_SP^P Pc[Z^`]P^ \_Z MZ\_S NWTPY\_^ LYO NZ`Y\_P][L]\_TP^ L]P ^`MUPN\_ \_Z YP\_\_TYR& Z] NWTPY\_ LYO NZ`Y\_P][L]\_d LR]PPXPY\_^& bSTNS ]PO`NP \_SP Pc[Z^`]P \_Z \_SP 7ZX[LYd Md [P]XT\_\_TYR ]PNPTaLMWP^ LYO [LdLMWP^ bT\_S ^`NS NWTPY\_^ LYO NZ`Y\_P][L]\_TP^ \_Z MP ZQQ^P\_ TY \_SP PaPY\_ ZQ L NWTPY\_ OPQL`W\_( ALYLRPXPY\_ MPWTPaP^ \_SL\_ \_SP XL]RTY OP[Z^T\_^ SPWO L]P LOP\`L\_P \_Z XTYTXTeP \_SP ]T^V ZQ XL\_P]TLW WZ^^ \_SL\_ NZ`WO MP N]PL\_PO Md [Z^T\_TZY^ SPWO L^ ZQ FP[\_PXMP] ,)& +)+,( 5OOT\_TZYLWWd& \_SP 7ZX[LYd XZYT\_Z]^ NZWWL\_P]LW QLT] aLW`P ZY L OLTWd ML^T^ LYO LOU`^\_^ NZWWL\_P]LW WPaPW^ TY \_SP PaPY\_ ZQ PcNP^^ XL]VP\_ Pc[Z^`]P( <PYP]LWWd& \_SP^P Pc[Z^`]P^ \_Z MZ\_S NWTPY\_^ LYO NZ`Y\_P][L]\_TP^ L]P ^`MUPN\_ \_Z XL^\_P] YP\_\_TYR& Z] NWTPY\_ LYO NZ`Y\_P][L]\_d LR]PPXPY\_^ bSTNS ]PO`NP \_SP Pc[Z^`]P \_Z \_SP 7ZX[LYd( ;`]\_SP]XZ]P& TY NP]\_LTY TY^\_LYNP^& \_SP 7ZX[LYd T^ TYOPXYTQTPO Md TY\_]ZO`NTYR'M]ZVP] OPLWP]^ QZ] WZ^^P^ TYN`]]PO ZY MPSLWQ ZQ \_SPT] NWTPY\_^(

8P]TaL\_TaP QTYLYNTLW TY^\_]`XPY\_^ TYaZWaP aL]dTYR OPR]PP^ ZQ ZQQ'^\_L\_PXPY\_ ZQ QTYLYNTLW NZYOT\_TZY XL]VP\_ ]T^V bSP]PMd NSLYRP^ TY \_SP QLT] aLW`P^ ZQ `YOP]WdTYR QTYLYNTLW TY^\_]`XPY\_^ XLd ]P^`W\_ TY NSLYRP^ TY \_SP QLT] aLW`P ZQ \_SP QTYLYNTLW TY^\_]`XPY\_^ TY PcNP^^ ZQ \_SP LXZ`Y\_^ ]PQWPN\_PO TY \_SP ^\_L\_PXPY\_ ZQ QTYLYNTLW NZYOT\_TZY( 9c[Z^`]P \_Z XL]VP\_ ]T^V T^ TYQW`PYNPO Md L Y`XMP] ZQ QLN\_Z]^& TYNW`OTYR \_SP ]PWL\_TZY^ST[^ MP\_bPPY \_SP QTYLYNTLW TY^\_]`XPY\_^ LYO \_SP 7ZX[LYdi^ [Z^T\_TZY^& L^ bPWW L^ \_SP aZWL\_TWT\_d LYO WT\`TOT\_d TY \_SP XL]VP\_^ TY bSTNS \_SP QTYLYNTLW TY^\_]`XPY\_^ L]P \_]LOPO( GSP []TYNT[LW ]T^V NZX[ZYPY\_^ ZQ QTYLYNTLW TY^\_]`XPY\_^ TYNW`OP& LXZYR Z\_SP] \_STYR^& TY\_P]P^\_ ]L\_P aZWL\_TWT\_d& \_SP O`]L\_TZY ZQ \_SP `YOP]WdTYR TY^\_]`XPY\_^ LYO NSLYRP^ TY NZXXZOT\_d []TNTYR LYO QZ]PTRY PcNSLYRP ]L\_P^( GSP 7ZX[LYd L\_\_PX[\_^ \_Z XLYLRP T\_^ Pc[Z^`]P \_Z XL]VP\_ ]T^V \_S]Z`RS aL]TZ`^ \_PNSYT\`P^ TYNW`OTYR \_SP ]PR`WL] XZYT\_Z]TYR LYO PYQZ]NPXPY\_ ZQ NWTPY\_ LYO LRR]PRL\_P XL]VP\_ WTXT\_^& L^ bPWW L^ XL]RTY ]P\`T]PXPY\_^( 5RR]PRL\_P XL]VP\_ WTXT\_^ SLaP MPPY P^\_LMWT^SPO LYO XL]VP\_ ]T^V XPL^`]P^ L]P ]Z`\_TYPWd XZYT\_Z]PO LRLTY^\_ \_SP^P WTXT\_^(

5^ L M]ZVP]'OPLWP] TY P\`T\_d LYO QTcPO TYNZXP ^PN`]T\_TP^& \_SP 7ZX[LYd T^ PYRLRPO TY aL]TZ`^ ^PN`]T\_TP^ \_]LOTYR& MZ]]ZbTYR LYO WPYOTYR LN\_TaT\_TP^ bT\_S TY^\_T\_`\_TZYLW NZ`Y\_P][L]\_TP^( GSP 7ZX[LYdi^ Pc[Z^`]P \_Z N]POT\_ ]T^V L^^ZNTL\_PO bT\_S \_SP YZY[P]QZ]XLYNP ZQ NZ`Y\_P][L]\_TP^ TY Q`WQTWWTYR \_SPT] NZY\_]LN\_`LW ZMWTRL\_TZY^ [`]^`LY\_ \_Z \_SP^P ^PN`]T\_TP^ \_]LY^LN\_TZY^ LYO XL]VP\_ ]T^V L^^ZNTL\_PO bT\_S \_SP ^LWP ZQ ^PN`]T\_TP^ YZ\_ dP\_ [`]NSL^PO NLY MP OT]PN\_Wd TX[LN\_PO Md aZWL\_TWP \_]LOTYR XL]VP\_^ bSTNS XLd TX[LT] \_SPT] LMTWT\_d \_Z ^L\_T^Qd Z`\_^\_LYOTYR ZMWTRL\_TZY^ \_Z \_SP 7ZX[LYd( >Y \_SP PaPY\_ ZQ YZY'[P]QZ]XLYNP LYO `YQLaZ]LMWP XL]VP\_ []TNP XZaPXPY\_^& \_SP 7ZX[LYd XLd MP ]P\`T]PO \_Z [`]NSL^P Z] ^PWW QTYLYNTLW TY^\_]`XPY\_^(

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{19}------------------------------------------------

## Derivatives

The Company provides clearing and excution of exchange-traded futures and options on futures, as well as exchange-cleared swaps for middle-market intermediaries, end-users of commodities and the institutional and professional trader market segments. Changes of these derivative instruments, are reflected in deposits with and receivables from broker-dealers, clearing organizations, and counterparties, net with a corresponding entry to payables to clients on the statement of financial condition.

The Company also has derivative instruments that are executed on a principal basis, which consist of agency mortgage-backed TBA securities and forward settling transactions that are used to manage risk exposures in the fixed income trading inventory. The fair value of these transactions is recorded in deposits with and receivables from broker-dealers, clearing organizations and counterparties, net and payables to broker-dealers, clearing organizations and counterparties. TBA and forward settling securities represent non-regular way securities and are accounted for as derivatives.

See Note 5 for additional information about the fair value of financial instruments held.

The following table presents the fair value of the Company's derivative instruments and their respective location on the statement of financial condition (dollars in thousands).

|                                                                                                                                     |       | September 30, 2023 |    |                 |
|-------------------------------------------------------------------------------------------------------------------------------------|-------|--------------------|----|-----------------|
|                                                                                                                                     |       | Assets (1)         |    | Liabilities (1) |
| Exchange-traded and cleared commodity derivatives                                                                                   | સ્ત્ર | 1,748,344          | ed | 1,748,344       |
| Exchange-traded foreign exchange derivatives                                                                                        |       | 4.254              |    | 4.254           |
| Exchange-traded interest rate derivatives                                                                                           |       | 1,507,435          |    | 1,509,796       |
| Exchange-traded equity index derivatives                                                                                            |       | 2,140,915          |    | 2,140,915       |
| TBA and forward settling securities                                                                                                 |       | 73,490             |    | 47,505          |
| Gross fair value of derivative contracts                                                                                            |       | 5,474,438          |    | 5,450,814       |
| Impact of netting and collateral                                                                                                    |       | (4,980,333)        |    | (4,980,026)     |
| Total fair value included in Deposits with and receivables from broker-<br>dealers, clearing organizations, and counterparties, net | S     | 494,105            |    |                 |
| Total fair value included in Payables to clients                                                                                    |       |                    |    | 452,283         |
| Total fair value included in Payables to broker-dealers, clearing<br>organizations and counterparties                               |       |                    |    | 16.144          |
| Total fair value included in Securities sold, not yet purchased, at fair<br>value                                                   |       |                    | S  | 2.361           |

(1) As of September 30, 2023, the Company's derivative contract volume for open positions for exchangetraded derivatives was approximately 11.4 million contracts.

# Note 7 - Securities Financing Transactions

The Company's repurchase agreements and securities borrowing and lending arrangements are generally recorded at cost in the Statement of Financial Condition, which is a reasonable approximation of their fair values due to their short-term nature. Secured borrowing and lending arrangements are entered into to obtain collateral necessary to effect settlement, finance inventory positions, meet customer needs or re-lend as part of our dealer operations. The fair value of securities loaned and borrowed is monitored daily compared with the related payable or receivable, and additional collateral or returning excess collateral is requested, as appropriate. These arrangements may serve to limit credit risk resulting from our transactions with our

{20}------------------------------------------------

counterparties. Financial instruments are pledged as collateral under repurchase agreements, securities lending agreements and other secured arrangements, including clearing arrangements. Agreements with counterparties generally contain contractual provisions allowing counterparties the right to sell or repledge collateral. Either the Company or its counterparties may require additional collateral is held by the Company or a custodian.

The following tables set forth the carrying value of repurchase agreements and securities lending agreements by remaining contractual maturity as of September 30, 2023 (in thousands):

|                                                                            | Overnight<br>and Open | Less than 30<br>Days Days | 30-90 Days                         | Over 90<br>Days | Total               |
|----------------------------------------------------------------------------|-----------------------|---------------------------|------------------------------------|-----------------|---------------------|
| Securities sold under agreements<br>to repurchase                          |                       |                           | \$ 8,292,299 \$ 786,805 \$ 106,983 |                 | 2.572 \$ 9.188.659  |
| Securities loaned                                                          | 1,117,318             |                           |                                    |                 | 1,117,318           |
| Gross amount of secured financing \$ 9,409,617 \$ \$ 786,805 \$ \$ 106,983 |                       |                           |                                    |                 | 2,572 \$ 10,305,977 |

# Offsetting of Collateralized Transactions

The following table sets forth the carrying value of repurchase agreements and securities lending agreements by class of collateral pledged as of September 30, 2023 (in thousands):

| Securities sold under agreements to repurchase:      |    |           |  |  |
|------------------------------------------------------|----|-----------|--|--|
| U.S. Treasury obligations                            | ಕಾ | 3,688,403 |  |  |
| U.S. government agency obligations                   |    | 542,152   |  |  |
| Asset-backed obligations                             |    | 102,864   |  |  |
| Agency mortgage-backed obligations                   |    | 4,371,594 |  |  |
| Corporate bonds                                      |    | 335,527   |  |  |
| Foreign government obligations                       |    | 148,119   |  |  |
| Total securities sold under agreements to repurchase |    | 9,188,659 |  |  |
|                                                      |    |           |  |  |
| Securities loaned:                                   |    |           |  |  |
|                                                      |    |           |  |  |

| Equity securities                 | 1,117,318  |
|-----------------------------------|------------|
| Total securities loaned           | 1,117,318  |
| Gross amount of secured financing | 10,305,977 |

{21}------------------------------------------------

The following tables provide the netting of securities purchased under agreements to resell, securities sold under agreements to repurchase, securities borrowed and securities loaned as of September 30, 2023 (in thousands):

|                                                    | September 30, 2023 |                                |  |                                                                 |                                                                        |           |  |  |
|----------------------------------------------------|--------------------|--------------------------------|--|-----------------------------------------------------------------|------------------------------------------------------------------------|-----------|--|--|
| Offsetting of collateralized transactions:         |                    | Gross<br>Amounts<br>Recognized |  | Amounts Offset in<br>the Statement of<br>Financial<br>Condition | Net Amounts<br>Presented in the<br>Statement of<br>Financial Condition |           |  |  |
| Securities purchased under agreements to resell \$ |                    | 7.620.004 \$                   |  | (4,669,834) \$                                                  |                                                                        | 2,950,170 |  |  |
| Securities borrowed                                |                    | 1,129,104                      |  |                                                                 |                                                                        | 1,129,104 |  |  |
| Collateralized securities financing assets         |                    |                                |  |                                                                 | ea                                                                     | 4,079,274 |  |  |
| Securities sold under agreements to repurchase \$  |                    | 9,188,659 \$                   |  | (4,669,834) \$                                                  |                                                                        | 4,518,825 |  |  |
| Securities loaned                                  |                    | 1,117,318                      |  |                                                                 |                                                                        | 1,117,318 |  |  |
| Collateralized securities financing liabilities    |                    |                                |  |                                                                 | S                                                                      | 5,636,143 |  |  |

The Company pledges securities owned as collateral in both tri-party and bilateral arrangements. Pledged securities under tri-party arrangements may not be repledged or sold by the Company's counterparties, whereas bilaterally pledged securities may be. The approximate fair value of pledged securities that can be sold or repledged by the Company's counterparties has been parenthetically disclosed on the Statement of Financial Condition.

The Company receives securities as collateral under reverse repurchase agreements, securities borrowed agreements, and margin securities held on behalf of counterparties. This collateral is used by the Company to cover financial instruments sold, not yet purchased; to obtain financing in the form of repurchase agreements; and to meet counterparties' needs under lending arrangement and matched-booked trading strategies. Additional securities collateral is obtained as necessary to ensure such transactions are adequately collateralized. In many instances, the Company is permitted by contract to repledge the securities received as collateral, which may include pledges to cover collateral requirements for tri-party repurchase agreements.

The following table sets forth the carrying value, which approximates fair value because of its short term nature, of collateral pledged, received and repledged as of September 30, 2023 (in thousands):

| Securities pledged or repledged to cover collateral requirements for tri-party arrangements       \$                                            |  |              |  |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--|--------------|--|--|--|
| Securities received as collateral that may be repledged                                                                                         |  |              |  |  |  |
| Securities received as collateral that may be repledged covering securities sold short \$ 2,461,110                                             |  |              |  |  |  |
| Repledged securities borrowed and client securities held under custodial clearing<br>arrangements to collateralize securities loaned agreements |  | \$ 1,096,413 |  |  |  |

{22}------------------------------------------------

# Note 8 - Property and Equipment, net

The following is a summary of property and equipment, net as of September 30, 2023 (in thousands):

| Furniture and equipment                        | ea | 1,683  |
|------------------------------------------------|----|--------|
| Computer software and hardware                 |    | 2,201  |
| Leasehold improvements                         |    | 4,249  |
| Capitalized software development               |    | 12,449 |
| Property and equipment, gross                  |    | 20,582 |
| Less accumulated depreciation and amortization |    | 12,838 |
| Property and equipment, net                    |    | 1.744  |

The Company capitalized \$4,503,000 of software development costs during the fiscal year ended September 30, 2023.

# Note 9 - Goodwill and Intangible Assets, net

The Company has total goodwill of \$12,566,000 as of September 30, 2023.

The gross and net carrying values of intangible assets as of September 30, 2023 by major intangible asset class are as follows (in thousands):

|                                            | Gross Amount |        | Accumulated<br>Amortization |         |  | Net Amount |  |  |
|--------------------------------------------|--------------|--------|-----------------------------|---------|--|------------|--|--|
| Intangible assets subject to amortization: |              |        |                             |         |  |            |  |  |
| Client base                                |              | 11,108 |                             | (8,372) |  | 2.736      |  |  |
|                                            |              | 11,108 |                             | (8.372) |  | 2.736      |  |  |

# Note 10 - Credit Facilities

The Company has a committed, unsecured line of credit agreement with Bank of Montreal, under which the Company may borrow up to \$190,000. This credit facility provides short-term funding of margin to commodity exchanges as necessary. The credit facility expires on October 29, 2024, and is subject to annual review and renewal. These borrowings are payable on demand.

The continued availability of this credit facility is subject to the Company's financial condition and operating results continuing to be satisfactory as set forth in the agreement. Borrowings under the credit facility bear interest at the Base Rate, as defined, plus 2.00%, which was 8.00% as of September 30, 2023. The agreement contains financial covenants related to the Company's tangible net worth, excess net capital, and maximum allowable net loss over a trailing twelve month period, as defined. The Company was in compliance with these covenants throughout the fiscal year, including as of September 30, 2023. There were no borrowings outstanding under this credit facility at September 30, 2023.

While there is no guarantee that the Company will be successful in renewing this agreement as it expires, the Company believes it will be able to do so.

In addition to its committed credit agreement, the Company has access to certain uncommitted financing agreements that support its ordinary course securities and margin needs, as necessary. There were no borrowings outstanding under these agreements at September 30, 2023.

{23}------------------------------------------------

#### Note 11 - Leases

The Company holds office space leases under non-cancelable agreements with third parties as of September 30, 2023. Leases with an initial term of 12 months or less are not recorded on the statement of financial condition.

The Company also occupies office space leased by StoneX Group. The Company does not execute intercompany lease agreements with StoneX Group and, there are no lease liabilities or right-of-use assets on the statement of financial condition related to leases executed by StoneX Group. Any unsettled balances are reflected in payables to affiliates on the statement of financial condition.

The Company has not considered any renewal options in the lease terms of its office space leases as the Company does not believe it is reasonably certain that any such rights will be exercised.

As the office space leases do not provide an implicit rate, the Company applied StoneX Group's collateralized incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The Company believes it is reasonable to apply the incremental borrowing rate of StoneX Group as the Company does not have its own central treasury function and the credit facilities available to the Company do not permit the financing of right-of-use assets. The Company believes that the pricing of its leases is more significantly influenced by the credit standing of StoneX Group than anything particular to the Company.

The Company has elected to not separate lease components from non-lease components for all office space leases. The Company does not have any financing leases as of September 30, 2023.

As of September 30, 2023, the Company recorded operating lease right-of-use assets and operating lease liabilities of \$2,174,597 and \$2,186,901, respectively.

As of September 30, 2023, the weighted average remaining lease term and weighted average discount rate was 1.5 years and 5.14%, respectively.

The maturities of the lease liabilities are as follows as of September 30, 2023 (in thousands):

| 2024                               | 1,512 |
|------------------------------------|-------|
| 2025                               | 756   |
| Total lease payments               | 2,268 |
| Less: interest                     | 81    |
| Present value of lease liabilities | 2,187 |

#### Note 12 - Commitments and Contingencies

#### Purchase and Other Commitments

Purchase and other commitments primarily include certain service agreements related to the use of frontoffice and back-office trading software systems and clearing agreements. The following table summarizes our purchase and other commitments as of September 30, 2023:

|                                                                                        |        | Payments Due by Period |                  |  |  |  |  |  |  |
|----------------------------------------------------------------------------------------|--------|------------------------|------------------|--|--|--|--|--|--|
|                                                                                        | l otal |                        | Less than 1 vear |  |  |  |  |  |  |
| Purchase and other commitments \$ \$ 11,609,201 \$ \$ = 6,948,978 \$ \$ = 4,660,223 \$ |        |                        |                  |  |  |  |  |  |  |

Securities sold, not yet purchased represent obligations of the Company to purchase specified financial instruments in the market at prevailing prices. Consequently, the Company's ultimate obligation to purchase

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{27}------------------------------------------------

Significant components of the Company's deferred tax assets and liabilities as of September 30, 2023 are as follows (in thousands):

| Deferred tax assets:                                               |    |         |
|--------------------------------------------------------------------|----|---------|
| Federal net operating losses                                       | S  | 3,479   |
| State and local net operating losses                               |    | 2,763   |
| Amortization of intangibles                                        |    | 126     |
| Accrued compensation                                               |    | 4,758   |
| Share-based compensation                                           |    | 177     |
| Bad debt                                                           |    | 2,979   |
| Right of use assets                                                |    | 527     |
| Other                                                              |    | 536     |
| Total gross deferred tax assets                                    |    | 15,345  |
| Less valuation allowance                                           |    | (4,724) |
| Total deferred tax assets                                          |    | 10,621  |
| Deferred tax liabilities:                                          |    |         |
| Prepaid expenses                                                   |    | (802)   |
| Unrealized gains on marketable securities and exchange memberships |    | (2,823) |
| Right of use liabilities                                           |    | (524)   |
| Total deferred tax liabilities                                     |    | (4,149) |
| Deferred income taxes, net                                         | ಕಾ | 6,472   |

As of September 30, 2023, the Company has net operating loss carryforwards for state and local income tax purposes of \$956,630, net of valuation allowances, which are available to offset future state and local taxable income. The state and local net operating loss carryforwards expire in tax years ending in 2026 through 2041. The Company also has approximately \$561,000, net of valuation allowances, of federal net operating losses. These federal net operating loss carryforwards consist of a portion that will expire in tax years ending in 2032 through 2037. The remaining portion of the federal net operating loss carryforwards do not expire, but cannot be utilized until 2038 and are limited by Internal Revenue Code ("IRC") Section 382.

The valuation allowance for deferred tax assets as of September 30, 2023 is \$4,724,431. Of this amount, \$1,806,199 is related to state and local net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. The remaining valuation allowance of \$2,918,232 is related to federal net operating losses and net unrealized built-in losses, which are limited by the provisions of IRC Section 382. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. When evaluating the need for a valuation allowance, the Company considers the operating and tax results of StoneX Grown, as income taxes are allocated to the Company using an income tax allocation.

StoneX Group has open tax years that include the activities of the Company, ranging from the year ended September 30, 2016 through the year ended September 30, 2022 with various taxing authorities.

{28}------------------------------------------------

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| EPTXM`]^PXPY_^& LWWZNL_TZY^& LYO Z_SP] TY_P]NZX[LYd NSL]RP^3                      |   |         |
|-----------------------------------------------------------------------------------|---|---------|
| 8`P Q]ZX LQQTWTL_P^                                                               | " | *&-).   |
| DLdLMWP^ _Z LQQTWTL_P^                                                            | " | ,1&2/2  |
|                                                                                   |   |         |
| G]LOTYR3                                                                          |   |         |
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| NZ`Y_P][L]_TP^& YP_ ' LQQTWTL_P^                                                  | " | *++&.+- |
| DLdLMWP^ _Z NWTPY_^ ' LQQTWTL_P^                                                  | " | -/,&).) |
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Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.