# MARCO POLO SECURITIES INC. X-17A-5 (2022-04-04) — Broker-dealer annual report - Company: MARCO POLO SECURITIES INC. - Form: X-17A-5 - Filed: 2022-04-04 - Period: 2021-12-31 - Accession: 0001075916-22-000001 - CIK: 1075916 - File #: 8-51480 - Type: Broker-dealer - Material weakness: No - Auditor: Raich Ende Malter & Co. LLP - Auditor location: New York, NY - Contact: Alexander Mack - Phone: 9179231478 - Email: amack@mpsecurities.com - Website: mpsecurities.com - Signed by: Steven Carlson (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1075916/000107591622000001/mpssofc2021.pdf --- {0}------------------------------------------------ ### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17 A-5 PART Ill** SEC FILE NUMBER 8-51480 **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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202 1 | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|------------------------------------------------------------|-----------------|--------------------------------|--| | | MWDDNY | | | MWDDNY | | | | A. REGISTRANT IDENTIFICATION | | | | | | ----------------------------------
Marco Polo Securities, Inc.
NAME OF FIRM: | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
D Security-based swap dealer
00 Broker-dealer
□ Check here if respondent is also an OTC derivatives dealer | | D Major security-based swap participant | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 1230 Avenue of the Americas, 16th floor | | | | | | | | (No. and Street) | | | | | | New York City | | NY | | 10020 | | | (City) | (State) | | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Alex Mack | 917-923-1478 | amack@mpsecurities.com | | | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Raich Ende Malter & Co. LLP | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 1375 Broadway, 15th floor | New York | | NY | 10018 | | | (Address) | (City) | | (State) | (Zip Code) | | | 06/23/2004 | | | 50 | | | | | | | | | | | * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public | FOR OFFICIAL USE ONLY | | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(ii), if applicable. **Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ ## **OATH OR AFFIRMATION** . f the I, St d e and behe , of even Carlson swear (or affirm) that, to the best of mv knowle g \_\_.J as f \_--:-~-----------------'. T 1 ~ y 110r anV inancial report pertaining to the firm of Marco Polo Secun ,es nc . h the compan lelY \_December 31 2021 is true and correct. I further swear (or affirm) that ne1t er t classified so =:-"""""Jl!t!ii~\_:..1. \_\_\_\_\_\_\_\_ \_\_,. =-' h . t . t t ·nanyaccoun partner, officer, director, or equivalent person, as the case may be, as any propne ary m eres ' that of a customer. ~ - ~ a s Notary Public. State of New **York** No. 01AN6286995 ,t e: . AHN TED TAESHIK igna e: --- ~ Qualified In Westchester County CEO .-- · Commission Expires 08/05/2025 Noft;rvPublic ### **This filing\*\* contains (check all applicable boxes):** - **1X1 (a)** Statement of financial condition. - IXI (b) Notes to consolidated statement offinancial condition. t f - D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statemen ° comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - D (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. - 0 (g) Notes to consolidated financial statements. - 0 (h) Computation of net capital under 17 CFR 240.15c3-l or 17 CFR 240.lSa-1, as applicable. - 0 (i) Computation of tangible net worth under 17 CFR 240.lSa-2. - 0 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - 0 (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.lSa-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - O (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(p)(2) or 17 CFR 240.lSa-4, as applicable. - O (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.1Sc3-1, 17 CFR 240.lSa-1, or 17 CFR 240.lSa-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - xJ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.lSa-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - !XI (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.lBa-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report \_based on an examination of certain statements in the compliance report under CFR 240.17a-S or 17 CFR 240.lBa-7, as applicable 17 . - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.lBa-7, as applicable. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240 as applicable. · 17 a-12, - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the prev· . a statement that no material inadequacies exist, under 17 CFR 240.l7a-li(k). •ous audit, or □ (z)Other:\_:-:-~~-------------------------- - - 0To r~quest confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e}{3) or 17 CFR 240 lB --- appftcable. · a-7(d)(2), as {2}------------------------------------------------ ## Marco Polo Securitie~ Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) Report on Statement of Financial Condition and Supplementary Information As of and for the Year Ended December 31, 2021 {3}------------------------------------------------ ### Marco Polo Securities, Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) STATEMENT OF **FINANCIAL** CONDITION FOR THE **YEAR** ENDED DECEMBER 31, **2021** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3-5 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Offices in Ne,.,v York City, Long Island. New Jersey & Cayman Islands ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder of Marco Polo Securities, Inc. New York, New York ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Marco Polo Securities, Inc. as of December 31 , 2021 , and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects , the financial position of Marco Polo Securities, Inc. as of December 31 , 2021 in conformity with accounting principles generally accepted in the United States of America. ### **Basis for Opinion** This financial statement is the responsibility of Marco Polo Securities, lnc.'s management. Our responsibility is to express an opinion on Marco Polo Securities, lnc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Marco Polo Securities, Inc. 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. **RAICH ENDE MALTER** & **CO. LLP** We have served as Marco Polo Securities, lnc.'s auditor since 2021. Florham, New Jersey April 4, 2022 ![](_page_4_Picture_13.jpeg) *An Association of Independent Accounting Firms* {5}------------------------------------------------ ### **Marco Polo Securities, Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2021** #### **Assets** | Cash | \$
424,748 | |----------------------------------------------------------------|---------------| | Commissions receivable (net) | 116,425 | | Employee Advances | 4,250 | | Prepaid expenses and other assets | 39,960 | | Total assets | \$
585,383 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | Liabilities | | | Accounts payable and accrued liabilities | \$
98,570 | | Deferred administrative fee revenue | 60,086 | | Total liabilities | \$
158,656 | | Stockholder's equity | | | Preferred stock - \$1 ,000 par value; 1,000 shares authorized; | | | shares issued and outstanding - none | | | Common stock - no par value; 200 shares authorized; | | | 100 shares issued and outstanding | \$
80,704 | | Additional paid-in capital | 446,589 | | Accumulated deficit | (100,566) | | Total stockholder's equity | \$
426,727 | | Total liabilities and stockholder's equity | \$
585,383 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ ### **Marco Polo Securities, Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021** #### **NOTE 1** - **ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### **Organization** Marco Polo Securities Inc. (the "Company") is a wholly-owned subsidiary of Magellan Global Inc. (the "Parent"). The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC"), a member of FINRA, a member of the Securities Investor Protection Corporation ("SIPC"), and a member of the National Futures Association ("NFA") as an introducing broker. The Company does not carry accounts for customers, or perform custodial functions, related to securities. The Company's primary business is offering investment banking and advisory services, and providing private placement services. Accordingly, the Company claims exemption from SEC Rule 15c3-3 under exemptive provision (k)(2)(i). The Company is also engaged in providing "Chaperoning" services under SEC Rule 15a-6 to foreign brokers, soliciting and effecting transactions with US investors. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. #### **Cash** At times, cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limits. #### **Credit Losses** The Company assesses the financial strength of its customers. Periodically, the Company evaluates its accounts receivable and provides an allowance for doubtful accounts equal to the estimated uncollectible accounts. The Company's estimate is based on a review of the current status of the individual accounts receivable. As a general rule, a 50% allowance is taken on items older than 90 days and a full allowance is taken on items that have aged more than 180 days, however discretion is used based on the circumstances of each account. As of December 31 , 2021 , there was no increase in the allowance for doubtful accounts of \$38,721. Commissions receivable at December 31 , 2021 and 2020 amounted to \$116,475 and 93,656, respectively. #### **Revenue Recognition** In accordance with ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASC Topic 606") revenues from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised services to the customers. A service is transferred when, or as, the customer obtains control of that service. A performance obligation may be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time is recognized by measuring the Company's progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. The amount of revenue recognized reflects the consideration the Company expects to receive in exchange for those promised services (i.e., the transaction price"). In determining the transaction price, the Company considers multiple factors , including the effects of variable consideration, if any. {7}------------------------------------------------ ### **Marco Polo Securities, Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021** #### **NOTE 1** - **ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### **Revenue Recognition, continued** Securities transactions and related commission revenue are recorded on a trade-date basis. Chaperoning fees are recognized as the service is provided. Investment banking income includes fees earned for financial advisory services, which are recorded as earned in accordance with the underlying agreement. Placement fees are earned at the time the placement is completed. Administrative fees are earned at the time the client commits to the employees work for the month, or occupies any rented space in a month. Setup fees are recorded when work is done to register clients, record them in Marco Polo's systems, and conduct other initial work needed for a new client. #### **Income Taxes** The Company has elected to be treated as an "S" Corporation under the provisions of the Internal Revenue Code and New York State tax regulations. Under the provisions, the Company does not pay federal or state corporate income taxes on its taxable income. Instead, the stockholder is liable for Individual income taxes on his respective share of the Company's taxable income. The Company continues to pay New York City general corporation taxes. #### **NOTE 2** - **DEFERRED ADMINISTRATIVE FEE REVENUE** At December 31, 2021 The Company recorded \$60,086 in advances from one customer. #### **NOTE 3** - **RELATED PARTY TRANSACTIONS** The Company reported advisory fee revenue in connection with raising capital for El Cano Spac Fund LP, a fund whose general partner is under common control with the Company. There is no additional balance due as of December 31, 2021. The Company incurred costs consisting of reimbursable expenses with its parent company and affiliates. As of December 31 , 2021 the Company owed \$0 to its parent and affiliates. {8}------------------------------------------------ ### **Marco Polo Securities, Inc. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021** #### **NOTE 4 - OFF-BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK** In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees, and administrators, against specified potential losses in connection with them acting as an agent of, or providing services to, the Company. The Company also indemnifies some customers against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statement for these indemnifications. #### **NOTE 5 - SIGNIFICANT CUSTOMERS** At December 31 , 2021 the top three customers accounted for 40% of the company's accounts receivable. #### **NOTE 6 - NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule ("SEC Rule 15c3-1 "), which requires the maintenance of minimum net capital, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The rule also provides that equity capital may not be withdrawn, or cash dividends paid , if the resulting net capital ratio would exceed 10 to 1. The Company is also subject to the net capital requirements of CFTC Regulation 1.17 and requirements of the National Futures Association. At December 31 , 2021 , the Company has regulatory net capital of \$288,588, which exceeds the Company's minimum regulatory net capital requirement of \$250,000 (which is net capital requirement of the SEC Rule 15c3-1) by \$38,588. The regulatory net capital as of December 31 , 2021 is less than 120% of its minimum net capital requirement of \$300,000. Accordingly, on March 30, 2022 the Company informed its regulator and on April 4, 2022 the Company filed a SEC Rule 1 ?a-11 (c)(3) "early warning" notice with its regulators. The Company's percentage of aggregate indebtedness to net capital is 55% as of December 31 , 2021. #### **NOTE 7 - COVID** Certain impacts from the COVID-19 outbreak may have a significant negative impact on the Company's operations and performance. These circumstances may continue for an extended period of time and may have an adverse impact on economic and market conditions. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries, and individual companies , are not known. The extent of the impact to the financial performance and the operations of the Company will depend on future developments, which are highly uncertain and cannot be predicted. #### **NOTE 8 - SUBSEQUENT EVENTS** The Company has evaluated subsequent events through April 4, 2022, the date the financial statement were available to be issued. The Company is in compliance with its net capital requirements and is also over its 120% of net capital "early warning" level, due in part to recognizing year 2021 deferred revenue of approximately \$50,000 through April 4, 2022. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.