# FEF DISTRIBUTORS, LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: FEF DISTRIBUTORS, LLC - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0001075919-21-000006 - CIK: 1075919 - File #: 8-51483 - Material weakness: No - Auditor: Ernst & Young LLP - Auditor location: New York, NY - Contact: Chun Fong - Phone: 212-698-3451 - Signed by: Chun Fong (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1075919/000107591921000006/FEFDFS2020FullSet.pdf --- {0}------------------------------------------------ Financial Statements and Information December 3L,2020 Supplemental This report is deemed CONFIDENTIAL in accordance with Rule l7a-5(ex3) under the Securities Exchange Act of 1934. {1}------------------------------------------------ TJNITEDSTATES SECURITIES AI,{ D EXCHANG E COMM ISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours perresponse., . . . . 12.00 ### ANNUAL AUDITED HEPOHT FORM X-l7A-5 PART III | | SEC FILE NUMBER | |---------|-----------------| | & 51483 | | FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the securities Exchange Act of 1934 and Rule l7a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING | 01/0ilza | AND ElrDrNG | 12t31t20 | |-------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|------------------------------------|-----------------------------------| | | MM/DD/YY | | MIWDDTTY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER: FEF Distributors, LLC
ADDRESS OF PRINCIPAL PLACE OF BUSTNESS: (Do nor use p.O. Box No.) | | OFFICIAL USE ONLY
FIRM I.D. NO. | | | | | | | | | (No. and Street) | | | | New York | NY | | 10105 | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Chun Fong | | | (2121698-3451 | | | | | (Area Code -
Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOIJNTANT whose opinion is contained in this Reportf
Emst & Young LLP | (Name - if individual, state last, first, middte name) | | | | 5 Times Square | New York | Ny | 1 0036 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | Public Accountant
Accountant | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | | | | | | | | | | | | | | | | | | \*ClaitJts for exemptionfrom the requiremenl that the annual report be covered by ttu opinion of an independent public accounranl must be supported by a statemeil offacts and circumstances relied on as the basis for ihe exeiption. See Section 240. I 7a-5(e)(2) Potential persons who are to respond to the eollection of Information contained in this form aie not required to respond unless the form displays a currently valid OMB};trol hufiGi sEc 1410 (1 1-05) {2}------------------------------------------------ #### OATH OR AFF'IRMATION | I, Chun Fong | , swear (or affirm) that, to the best of | |---------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------| | FEF Distributors, LLC | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
,&s | | of December 31 | 2020-
--*. are true and correct. I further swear (or affirm) that | | classified solely as that of a customer, except as follows: | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | | | l
State of New York | | | County of New Yqk
I | | | Sruorn to before rne thh 8tt day of Febrffiry, ZAZI, | Chief Financial | | ffirrtu | | | | TIFFANY N NILSON | | | NOTARY PUBLIC, STATE OF NEW | | Notary Public | Registration No. 01 N16095373 | | Ihir report ** contains (check all applicable boxes): | Qualified in Kings CountY
Commission Expires October 14' 2A23 | | V (a) Facing Page. | | | m (b) Statement of Financial Condition. | | | n (c) Statement of lncome (Loss) or, if there is orher | comprehensive income in the period(s) presented, a Statement | | of Comprehensive Income (as defined in g2l0.l
(d) Statement of Changes in Financial Condition. | -02 of Regulation S-X). | | (e) Statement of Changes in Stockholders' Equity orPartners' or Sole Proprietors'Capital. | | | (0 Statement of changes in Liabilities subordinated to claims of creditors. | | | (g) Computation of Net Capital. | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule l5c3-3. | | | (i) Information Relating to the Possession or Control Requirements Under Rule l5c3-3. | | | | 0) A Reconciliation, including appropriate explanation ofthe Computation of Net Capital Under Rule l5c3- l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l5c3-3. | | | consolidation. | E (k) A Reconoiliation betweon the auditcd and unaudited Statements of Financial Condition with respccr to methods of | | (l) An Oath or Affirmation. | | | E
(m) A copy of the SIPC Supplemental Report. | | | tr | (n) A report describing any material inadequacies found to exist or found to have existed since the date ofthe previous audit. | | **For conditions olconfidential treatmenl ofcerlain portions ofthisfiling, see section 240.t7a-5(e)(j). | | {3}------------------------------------------------ #### Contents | Report of lndependent Registered Public Accounting Firm | 1 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | Financial Statements | | | Statement of financial condition | 2 | | Statement of operations | 3 | | Statement of changes in member's equity | 4 | | Statement of cash flows | 5 | | Notes to financial statements | 6-11 | | Supplemental Infonnation | | | Computation of Net Capital Pursuant to Rule 15c3-l | l3 | | Computation for Determination of Reserve Requirements under Rule l5c3-3 and Information
Relating to Possession or Control Requirements Under Rule 15c3-3 | t4 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 5 Times Ssuare New York, NY 10035-6530 Te!: + L ZLZ 773 3000 Fax: + t 2L? 773 6350 gv.cen' #### Report of Independent Registered Public Accounting Firm To the Member and the Directors of FEF Distributors, LLC #### Oplnton on thc Finencial Stetcments We have agdited the acmmpanying stat€ment of financial ondition of FEF Distributors, LLC (the'Eompany) as of Decemb er 3l,2020,aira ine retatea statements of operations, changes in mernrber's equity and castr flows for the year then errauO, \*A the related notes (collec'tively referred to as\_the financial staternentsJ. In our opinion, the financial statements present fairly, in alt material resf\_cts, the fmancial Pogition ofthe Compony at OecenrUer 3l,z1z},and the r.sott" of its operdions and its cash flows for the year then ended in oonformity with U.S. generally acce?ted aocounting principles. #### Basis for Oplnton These financial sht€m€nts arc the responsibility ofthe Company's managernenl Our responsibility is to express an opinion on the Company's financial statemelrts based on our audit. We arc a publi9 accoyting firm-registered wittr the public Comiani Accounting Oversight Board (United States) (FCAOB) and arc required to be independent with rcspect io ttre Company in accordance with the U.S. federal securities laws and the applicable nrles and rcgulations of the Securities and Exchange Commission andthe PCAOB. We conducted our agdit in accordance with the standards of the FCAOB. Those standards r€guire that we plan and perform the audit to obtain reasonable assurance about whether the financial stateflr€,lrts are free of mderial misstatement, whether due to emor or fraud. Our audit included performing procedures to ass6s the dsks of material misstatement of the financial statements, whether due to error or fiau4 and performing procedres that respond to those risks. Such procedures included examining on a test basis, widence regarding the amounts and disclosures in the financiat itatements. Our audit also included waluating the accounting pinciples used and significant estimates made by managem€nt" as well as evaluating the overall presentation of the financial statemens. We believe that our audit provides a reasonable basis for our opinion. #### Supplcmcntal Informedon The accompanying information contained in Schedules I, II, and III has been subjected to rydit procedures performed in ionJunctioa with the audit of the Company's finanoial stat€ments. Such information is thc responsibility of -ttre Company's management. Our ardit procedures included determining whether the information -reconciles to thi financial stAemmts or the undertying accounting and other recordg as applicable' and performing procedures to test the completeiress and accuracy of the information. In forming our opinion on the infornradon, we evaluapd whctrer such information, inoluding itr form ond oontetrtr ie preeented in conformity withRule 17a-5 under the Securities Exchange Act of 1934. Inour opinion, the information is fairly stated, in all material r€spects, in relation to the financial statements as a whole. furfty\*r We have serued as the Company's auditor since 2013. New York, NY February 26,2021 CONT'IDENTIAL A memfdr lirrn of Enrtt & Yourrg Glouai r-imitec {5}------------------------------------------------ Statement of Financial Condition December 31,2020 CONFIDENTIAL | Assets | | |---------------------------------------|------------------| | Cash and cash equivalents | \$
16,140,292 | | Commissions receivable | 332,933 | | Receivable from parent | 426,602 | | Other assets | 330,535 | | Total assets | \$
17,230,352 | | Liabilities and Member's Equity | | | Liabilities | | | Izb-l fees payable | \$
14,126,966 | | Payable to parent | 3,531 | | Accounts payable and accrued expenses | 111 ,412 | | Total liabilities | 14,241 ,g0g | | Member's equity | | | Total liabilities and member's equity | | {6}------------------------------------------------ Statement of Operations For the ".:f,#\*ffi.#.r 31, 2020 | Revenue | | |-----------------------------------|------------------| | lzb-I income | \$
92,133,900 | | Commissions | 1,981,888 | | Other income | l3
724 | | Total revenue | 94,129,512 | | Expenses | | | Izb-I expense | 92,133,900 | | Regulatory fees | 547 ,1 35 | | Administrative fees to the parent | 562,877 | | Professional fees | 142,793 | | Other | 72,431 | | Total expenses | 93,459,136 | | Net income before income taxes | 670,376 | | Income taxes | 1,319 | | Net income | \$
669,057 | {7}------------------------------------------------ Statement of Changes in Member's Equity For the Year Ended December 3 L,2020 CONFIDENTIAL | Retained
Paid-in Canital | | | Total | | | |-----------------------------|--|--|------------|----------------|----------------------| | \$ | | | ,,zll:,3:; | \$ | 2,319,386
669,457 | | \$ | | | | | 2,999,443 | | | | | r,000 | \$
1,000 \$ | 2,997 ,443 \$ | {8}------------------------------------------------ ## Statement of Cash Flows Forthe ""rJ,HH3fi',H'r 31'2020 | Cash flows from operating activities | | |-------------------------------------------------------------------------------|-------------------| | Net income | \$
669,057 | | Adjustments to reconcile net income to net cash used in operating activities: | | | Changes in operating assets and liabilities: | | | Commissions receivable | 26,642 | | Receivable from parent | (308,710) | | Other assets | (37,253) | | 12b-1 fees payable | (4,541 ,896) | | Payable to parent | 3,531 | | Accounts payable and accrued expenses | 21,7 45 | | Net cash used in operating activities | (4,166,884) | | Net decrease in cash and cash equivalents | (4,166,884) | | Cash and cash equivalents | | | Beginning of year | 20,307,166 | | End of year | \$
16,1 40,282 | | Supplemental disclosurre of cash flow information | | | Income taxes paid | \$
673 | | | | {9}------------------------------------------------ Notes to Financial Statements December 31,2020 CONFIDENTIAL ### 1) Organization Nature of operations: FEF Distributors, LLC (the "Company") is a non-clearing registered brokerdealer with the Securities and Exchange Commission ("SEC') and is a member of the Financial Industry Regulatorv Authority ("FINRA"). The Company is a wholly-owned subsidiary of First Eagle Investment Managrment, LLC (the "Parent"). On December 2, 2020, the Parent launched and registered with the SEC, First Eagle Credit Opportunities Funcl, a non-diversified, closed-end management investment company, and operating as an interval fund. The Company is engaged in the distribution of shares of the First Eagle group of mutual funds and the interval fund (collectively "FE Funds"). As of December 31, 2020,tbe FE Funds consist of eight 1940 Act registered funds: First Eagle Global Fund, First Eagle Overseas Fund, First Eagle U.S. Value Fund, First Eagle Gold Fund, First Eagle High Yield Fund, First Eagle Global Income Builder Fund, First Eagle Fund of America, and First Eagle Overseas Variable Fund ("Mutual Funds"), and one interval fund: First Eagle Credit Opportunities Fund ("Interval Fund") The Company also engages in private placements of securities solely as wholesale placement agent. The private placement activities are limited to advising on or facilitating the placement of direct participation prograrn securities, effecting private securities offerings, and retail or institutional sales and trading activities. The Company is exempt from Rule 15c3-3 of the Securities and Exchange Commission under paragraph (k)(2xi), as the Company is a broker-dealer limited to the distribution of shares of mutual funds and private placements of securities solely as wholesale placement agent. The Company also does not hold customer accounts or receive customer cash or securities. ### 2) Significant Accounting Policies - a) Basis of presentation: The financial statements of the Company are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (\*U.S. 644p") as detailed in the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC"). All of the Company's assets and liabilities that are considered financial instruments are reflected at fair value. The carrying value of all other assets and liabilities approximates fair value. - b) Use of estimates: The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. - c) Cash and cash equivalents: Cash and cash equivalents include highly liquid instruments with original maturities of three months or less at the date of acquisition. Cash equivalents may consist of investments with stable net asset value ('T.IAV") money market funds which are valued based {10}------------------------------------------------ Notes to Financial Statements December 31,2020 CONFIDENTIAL on NAV per share as an acceptable proxy of fair value. The Company maintains deposits with financial institutions in an amount that is in excess of federally insured limits. The Company does not have any reshicted cash. - d) Securities: The Company does not carry customer accounts and generally does not carry any securities on its own account. Securities, if any, are traded in active markets and are valued using quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency that are classified within appropriate level of the fair value hierarchy in accordance with ASC 820. - e) Revenue recognition: The Company adopted the guidance under ASU 2014-09, Revenue from Contracts with Custorners and all related amendments on January 1,2018 under the modified retrospective method of adoption. The Company classifies its revenues into 12b-1 income and commissions. 12b-1 income: The Company earns fees for providing certain ongoing distribution and marketing support services for the FE Funds based on their respective prospectuses. The Interval Fund offers Class A and Class I shares. l2b-1 income is earned based on basis points of average net assets in the FE Funds, 25 basis points on Class A and Y, 75 basis points on Class A shares of the Interval Fund, 100 basis points on Class C, 35 basis points on R3 shares and 10 basis points on R4 shares. As a result, l2b-l income is recognized overtime as FE Funds simultaneously receive and consume the benefit from the l2b-l services performed by the Company. The Company uses estimates in recording the accruals related to 12b-1 income, which are based on historical trends and are adjusted to reflect market conditions for the period covered. Commissions: Included in Commissions revenues are underwriting retention, contingent deferred sales charges and 12b-1 fee commission. Semi-monthly the Company earns underwriting retention as underwriter of FE Funds and contingent deferred sales charge on redemptions of Class C shares prior to specified holding period. These revenues are derived from fees based on purchase and sale of FE Funds' shares. Underwriting retention revenue is based on the number of mutual fund positions purchased. Contingent deferred sales charges are based on number of mutual fund positions sold. The Company, as underwriter of the FE Funds, eams up to 50 basis points on sales charges of Class A shares. The Interval Fund may earn up to 350 basis points on sales charge for Class A shares. Contingent deferred sales charge is 1% fee charged onredemptions of Class C shares prior to specified holding period. For the Interval Fund, purchases of \$250,000 or more of Class A shares will be subject to contingent deferred sales charge of 1% for early withdrawal during the first 12 months aftertheirpurchase. The Company also receives quarterly 12b-l fee commission payments where there are no default dealers. These commissions revenues are generally recognized at a point in time when the transaction is placed, or trade date. On trade date the shareholder ofthe FE Fund shares obtains control through a right to either own a security for a purchase or receive payment for a sale. {11}------------------------------------------------ Notes to Financial Statements December 31,2020 CONFIDENTIAL For the purposes of the disclosure of disaggregated revenue from contracts with customers required by ASU 2014-09, the Company presents the following types of revenue by sources: The Company recognized \$92,133,900 in 12b-1 income which was paid out to non-affiliated financial institutions. Additionally, commissions revenues include \$510,974 in underwriting retention, \$358,953 in contingent deferred sales charges, as well as \$1,111,961 in 12b-1 fee commission. Other income: Other income consists of interest income earned on cash and cash equivalents. Other income is recorded on an accnral basis as earned. As of December 31,2020, \$332,933 of commissions receivable and \$426,602 of 12b-1 receivable related to revenue contracts are recorded on the statement of financial condition. The 12b-1 receivable balance is reflected in the balance receivable from the Parent on the statement of financial condition, pursuant to a Purchase and Sales agreement discussed in Note 5. The Company adopted the Current Expected Credit Loss (CECL) guidance issued by the FASB as of January 1, 2020,wlnch requires the Company to record receivable balances at lower of amortized costs basis or fair value, with consideration of whether allowance for expected credit losses should be recognized. There is no material impact on receivables due to the adoption of CECL. - 0 12b-1 fees: The Company pays 12b-1 fees to non-affiliated financial institutions for marketing, promotional and shareholder services on behalfofthe FE Funds. The fees are based on contracted amounts and are paid monthly or quarterly, in accordance with the respective agreements. For the year ended December 31,2020, 12b-l fees amounted to \$92,133,900 and is reflected as l2b-1 expense on the Statement of Operations. As of December 31, 2020, 12b-l fees payable of \$14,126,966 is reflected on the Statement of Financial Condition. - g) Taxes: The Company is a single member limited liability company and is treated as a disregarded entity for tax purposes. The Company does not file any tax returns, but its taxable income is reported as part ofthe Parent's tax returns. The Parent is an LLC treated as a partnership and does not have tax liabilities in most jurisdictions but rather passes through its taxable income to its members. The Parent files a tax return with New York City ("NYC'), where it is liable for unincorporated business tax ("UBT"). The Company has a tax sharing arrangement with the Parent, whereby the Parent is reimbursed for taxes incurred from the results of the Company's operations, based on an apportionment factor attributed to NYC, multiplied by the applicable UBT rate. Consequently, the Company records income tax expense which represents its share of the Parent's current UBT liability, based on the Company's net income, as included in the Parent's UBT return. The Parent also files a combined Texas franchise tax report, in which the Company is included as an affiliate. Unlike most states, Texas does not follow the federal tax treatment ofpartnerships and limited liability companies as flow-through and/or disregarded entities. In addition, beginning with 2020, Texas imposes economic nexus. Therefore, the Company is considered to be a taxable member of the Texas combined group. Consequently, the Company included \$23,367 of the Texas franchise tax within Other expenses, representing its share of the Parent's combined current Texas tax liability, based on 70%o of the Company's total revenues, multiplied by the combined Texas apportionment factor of the Parent's affiliated group, and multipli.a Uy ttr" applicable Texas tax rate. {12}------------------------------------------------ Notes to Financial Statements December 31, 2020 #### CONFIDENTIAL lnterest and penalties, if any, are recognized as incurred and are included in income taxes on the Statement of Operations. ### 3) Investments in Securities For the year ended December 31,2020, the Company did not hold inveshents in securities. ### 4) Contingencies In the normal course of business operations, the Company is subject to regulatory examinations or other inquiries. These matters could result in censures, fines or other sanctions, but the Company is unable to predict the outcome of these matters. However, management believes the outcome of any resulting actions will not be material to the Company's Financial Statements. ### 5) Related-Party Transactions The Company receives 12b-1 and commissions revsnues from the FE Funds for the distribution of shares of the FE Funds. For the year ended December 31, 2020, total revenue from 12b-1 and commissions revenues were \$92,133,900 and \$1,981,888, respectively, and are reflected in the Statement of Operations. Receivables from the FE Funds as of December 31, 2020were \$332,933 and are included in commissions receivable on the Statement of Financial Condition. Pursuant to a Purchase and Sales Agreement between the Company and the Parent, the Company sells certain receivables due from the FE Funds each business day to the Parent as a form of facilitating cash settlement of its revenue recognized from the FE Funds. The funds received from this Purchase and Sale Agreement are subsequently disbursedto non-affiliated financial institutions forthe marketing and promotion of the FE Funds. For the year ended December 31,2020, receivables totaling \$92,133,900 were sold to the Parent of which 9426,602 remains receivable from the parent as of Decemb er 3l,2O2O and is reflected as a component of receivable from parent in the Statement of Financial Condition. The Company pays monthly administrative fees to the Parent for ongoing administrative services provided to the Company in accordance with the Service Agreement between the Company and the Parent. The fees are allocated to the Company based on headcount and percentages of wages and time spent by certain employees of the Parent, and include services such as personnel, rent, telecommunication, and corporate services. The total administrative fee incurred by the Company for the year ended December 3I,2020 was \$562,877 and is included in administrative fees to the parent on the Statement of Operations. As of December 31,2020, the amount payable to the Parent for administrative services is \$1,313 and is included as a component of payable to parent on the Statement of Financial Condition. The Company is allocated a portion of occupancy related payments from the Parent, pursuant to the Service Agreement discussed above, based on headcount and percentages of wager urrd ti-" spent by {13}------------------------------------------------ Notes to Financial Statements December 31,2020 CONFIDENTIAL certain employees of the Parent. This amount is reflected as a component of administrative fees to the parent on the Statement of Operations. The Company does not have the right to obtain substantially all ofthe economic benefits from the use of the asset, nor have the right to direct how and for what purposes the asset can be used. ### 6) Income Taxes U.S. GAAP provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented on the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense and liability in the current year. Since the Company is treated as a disregarded entity for tax purposes through December 31, 2020, management has determined that there are no material uncertain income tax positions for the Company. As of December 3l , 2020, income tax expense and taxes payable were \$ I ,3 1 9 ard \$221 respectively, and are included in income taxes on the Statement of Operations and as a component of payable to the parent on the Statement of Financial Condition, respectively. ### 7) Regulatory Requirements The Company is a registered broker-dealer and, accordingly, is subjected to Uniform Net Capital Rule 15c3-1 (the "Rule") of the SEC and capital rules of FINRA. The Company has elected to use the Alternative Net Capital method permitted by the Rule, which requires the Company to maintain minimum "net capital" equal to the greater of \$250,000 or 2%o of aggregate debit items arising from the reserve formula, as defined by the Rule. Net capital changes from day to day. At December 31,2020, the Company had net capital of S1,898,373, resulting in excess net capital of \$1,648,373. The minimum net capital requirements may restrict the payment of distributions. ### 8) Indemnifications In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects the risk of future obligation under these indemnifications to be remote. ### 9) New Accounting Pronouncements #### Current Expeaed Credit Loss (CECL) In June 2016, the FASB issued new guidance amending the current incurred loss impairment methodology. The new standard amends the methodology that reflects expected credit losses and {14}------------------------------------------------ Notes to Financial Statements December 31,2020 CONFIDENTIAL requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This ASU changes how companies measure credit losses on most financial instruments, including accounts receivable. Companies will be required to estimate lifetime expected credit losses, which is generally expected to result in earlier recognition of credit losses. The guidance is effective for periods beginning after Decemb er 15, 2019 . The Company has adopted the standard as of January 1,2020 and there is no impact on the financial statement amounts. #### 10) Subsequent Events The Company evaluated all subsequent events, including the Company's ability to continue as a going concern, for potential recognition and/or disclosure and concluded there were no subsequent events through February 26,2021,the date these financial statements were available to be issued and approved by the Company's management. {15}------------------------------------------------ Supplemental Information {16}------------------------------------------------ #### Computation of Net Caprtal Pursuant to Rule 15c3-1 December 31,2020 CONFIDENTIAL | Total member's equity | | \$
2,988,443 | |---------------------------------------------------------------|---------------|-----------------| | Deductions and/or charges: | | | | Nonallowable assets from Statement of Financial Condition: | | | | Commissions receivable | \$
332,933 | | | Receivable from parent | 426,602 | | | Other assets | 330,535 | | | Total deductions and/or charges | | 1,090,070 | | | | | | Net capital before haircuts on proprietary positions | | 1,898,373 | | | | | | Haircuts on cash and cash equivalents (money market fund \$0) | | | | Net capital | | 1,898,373 | | | | | | Required net capital, greater of: | | | | Minimum dollar requirement | \$
250,000 | | | 2% of combined aggregate debit items as shown in Formula for | | | | Reserve Requirements pursuant to Rule 15c3-3 | | 250,000 | | | | | | Excess net capital | | \$
1,648,373 | There are no material differences between the above computation and the Company's December 31,2020 FOCUS Report Part IIA submitted on January 27 ,2021. {17}------------------------------------------------ FEF Distributors, LLC Supp lemental Information #### Computation for Determination of Reserve Requirements under Rule 15c3-3 Schedule II #### December 3112020 The Company claimed an exemption from the computation of reserve requirernents under paragraph (kX2Xi) of Rule 15c3-3 of the Securities Exchange Act of 1934, as the Company is a limited purpose broker-dealer for the distribution of shares of mutual funds and interval fund, and may also engage in limited private placements of securities as wholesale placement agent. The Company did not hold customer accounts or receive customer cash or securities during the year-ended December 31,2020. #### Infomation Relating to Possession or Control Requirements Under Rule 15c3-3 Schedule III #### December 3112020 The Company is exempt from the possession or control requirements under paragraph (kX2Xi) of Rule 15c3-3 of the Securities Exchange Act of 1934, as the Company is a limited purpose broker-dealer for the distribution of shares of mutual funds, and may also engage in limited private placements of securities as wholesale placement agent. The Company did not hold customer accounts or receive customer cash or securities during the year-ended December 31,,2020. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.