# KBC SECURITIES USA LLC X-17A-5 (2019-03-04) — Broker-dealer annual report - Company: KBC SECURITIES USA LLC - Form: X-17A-5 - Filed: 2019-03-04 - Period: 2018-12-31 - Accession: 0001077349-19-000001 - CIK: 1077349 - File #: 8-51529 - Material weakness: No - Auditor: EISNERAMPER LLP - Auditor location: NEW YORK, NY - Contact: Rosalba Ragusa - Phone: 212-541-0683 - Signed by: Rosalba Ragusa (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1077349/000107734919000001/SFCSHORT.pdf --- {0}------------------------------------------------ ## **STATEMENT OF FINANCIAL CONDITION** KBC Securities USA LLC December 31 , 2018 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ ## KBC Securities USA LLC ## Statement of Financial Condition Year Ended December 31 , 2018 #### **Contents** | Facing Page Oath or Affirmation | | |------------------------------------------------------------|--| | Repo11 of Independent Registered Public Accounting Firm I | | | Statement ofFinancial Condition



2 | | | Notes to Statement of Financial Condition
3 | | {2}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response .. ... . 12.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** SEC FILE NUMBER 8-51529 **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 | -----------
01/01/18
MM/DD/YY | AND ENDING | -----------
12/31/18
MM/DD/YY | | | | | |---------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|------------|-------------------------------------|--|--|--|--| | A. REGISTRANT IDENTIFICATION | | | | | | | | | NAME OF BROKER-DEALER: KBC SECURITIES USA LLC | | | OFFICIAL USE ONLY | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM 1.0. NO. | | | | | | 1177 AVENUE OF THE AMERICAS | | | | | | | | | | (No. and Street) | | | | | | | | NEW YORK | NY | | 10036 | | | | | | (City) | (State) | | (Zip Code) | | | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
ROSALBA RAGUSA | | | (212) 541 -0683 | | | | | | | | | (Area Code - Telephone Number) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report*
EISNERAMPER LLP | | | | | | | | | | (Name - if individual, state last, first, middle name) | | | | | | | | 750 THIRD AVENUE | NEW YORK | NY | 10017 | | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | | CHECK ONE: | | | | | | | | | ✓ I
Certified Public Accountant | | | | | | | | | Publi c Accountant | | | | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | *Claims 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 240.1 ?a-5 (e)(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 0MB control number.** SEC 1410 (11-05) {3}------------------------------------------------ #### **OATH OR AFFIRMATION** I, \_R\_O\_S\_A\_L\_B\_A\_ R\_A\_G\_U\_SA \_\_\_\_\_\_\_\_ \_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_ , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of KBC SECURITIES USA LLC - ------ ------------- ------------------------, as of DECEMBER 31 , 2018 are true and correct. I further swear ( or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as fol lows: | GABRIELLE AN NE PAUP ECK | | |-------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------| | NOTARY PU LI - | | | No . 0 2PA6342 973 | | | Qu al if ied In Kings County | | | M y Commiss ion Expi res 05-31 -2020 | | | | CHIEF FINANCIAL OFFICER | | | Title | | | | | | | | | | | | | | 1s report** contains (check all applicab le boxes):
0 (a) Facing Page. | | | 0 (b) Statement of Financial Condition. | | | D ( c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement | | | of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). | | | D (d) Statement of Changes in Financial Condition. | | | D (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | D (f) 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 15c3-3. | | | (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3 . | | | D U) A Reconciliation, including appropriate explanation of the Computation ofN et Capital Under Rule l 5c3- | l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l 5c3-3. | | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | | consolidation. | | | [2] (I) An Oath or Affirmation. | | | 0 (m) A copy of the SIPC Supplemental Report. | | | | D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | | **For conditions of confidential treatment of certain portions of this filing, see section 240. l 7a-5(e)(3). | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** The Board of Directors of KBC Securities USA LLC #### Opinion on the Financial **Statement** We have audited the accompanying statement of financial condition of KBC Securities USA LLC (the "Company") as of December 31, 20 18 and the related notes (col lectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as December 31, 201 8, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibil ity is to express an opinion on the Company'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 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 regard ing 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. *~ -\_fl/~1-~ 'f>* We have served as the Company's auditor since 2016. EISNERAMPER LLP New York, New York March 1, 2019 > ... -- {5}------------------------------------------------ {6}------------------------------------------------ ## KBC Securities USA LLC Statement of Financial Condition ## December 31, 2018 *(In Thousands)* | Assets | | |--------------------------------------------------------|-------------| | Cash | \$
6,726 | | Cash segregated in compliance with federal regulations | 1,500 | | Receivable from: | | | Brokers or Dealers, Fail to Deliver | 187 | | Customers | 24 | | Affiliate | 264 | | Unde1writing fee receivable | 13 | | Deferred Tax Asset | 146 | | Other assets | 6 | | | | | Total assets | \$
8,866 | | | | | Liabilities and Member's Equity | | | Payable to: | | | Broker or Dealers, Fail to Receive | \$
24 | | Customers | 187 | | Affiliate | 116 | | Parent | 30 | | Other liabilities and accrued expenses | 180 | | Total liabilities | 537 | | | | | Member's Equity | 8,329 | | Total liabilities and Member's Equity | \$
8,866 | | | | *See accompanying notes.* {7}------------------------------------------------ # KBC Securities USA LLC Notes to Statement of Financial Condition #### December 31 , 20 I 8 #### **1. Organization** KBC Securities USA LLC (formerly known as KBC Securities USA, Inc.), (the "Company"), a Delaware limited liability company was formed on December 8, 1998. KBC Bank NV, ("KBCBNV" ) is the sole member of the Company, (the "Parent"). KBC Group NV is the ultimate Parent Company of KBCBNV. In October 2017, the Company converted its legal status from a C-Corporation to a Delaware limited liability company (LLC). The Company is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is an Introducing Broker Dealer which acts as a chaperoning broker-dealer on an agency basis Pursuant to Rule 15a-6 with its foreign affiliate. The Company engages in "allor-none" bond economics offerings, performs private placement of equity securities as a co-manager and acts as a selling agent for equity securities offerings. #### **2. Summary of Significant Accounting Policies** ## *a) Basis of Financial Statement Presentation* The Company's Statement of Financial Condition is prepared in accordance with accounting principles generally accepted in the United States of America. #### *b) Revenue and Expense Recognition* In May 2014, the Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("AS U") No. 2014-09, *Revenue from Contracts with Customers (Topic 606)* (" ASU 2014-09"), as subsequently amended, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most recent current revenue recognition guidance, including industryspecific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for certain incremental costs of obtaining a contract, and costs to fulfill a contract with a customer. Entities have the option of applying either a full retrospective approach to all periods presented, or a modified approach that reflects differences prior to the date of adoption as an adjustment to equity. The Company applied the modified retrospective method of adoption which resulted in no adjustment to member's equity as of January I, 2018. {8}------------------------------------------------ # KBC Securities USA LLC # Notes to Statement of Financial Condition ( continued) ### **2. Summary of Significant Accounting Policies (continued)** #### *b) Revenue and Expense Recognition (continued)* The Company's contracts are wholly in scope of ASC606. Each contract is considered to be a single performance obligation. When engaging in 1 Sa-6 transactions and Bonds Economics/Equity private placement there are no variable elements in each contract; when engaging in equity securities underwriting there is a variable element in the contract based on success fee which is based on number of issued shares. Commissions for l Sa-6 transactions and underwriting fees are recognized on a trade date basis. When engaging in 1 Sa-6 transactions the Company acts as an agent for a foreign affiliate that is not registered with the SEC. When engaging in all or none bond economics offerings and equity private placement as co-manager the Company is acting as a principal. The Company is acting as an agent when engaging in equity securities underwriting. When acting as an agent the Company records commission on a net basis and on a gross basis when acting as a principal. The Company participates in all-or-none underwritings, which are offerings of a security in which the entire issue must be sold or the offering is void. With this arrangement the lead underwriter has the ability to cancel the offering if the entire issue is not sold. Fee revenue relating to underwriting commitments is recorded when all significant items relating to the underwriting cycle have been completed and the amount of the underwriting revenue has been determined. These fees are non-recurring in nature. Commissions earned for acting as a chaperoning broker dealer for its affiliate are recorded on a trade date basis as securities transactions occur. ## *c) Use of Estimates* The preparation of financial statements in conformity with U.S. generally accepted accounting principles which requires management to use its judgment in making certain estimates. Such estimates may differ from the amounts ultimately realized due to uncertainties inherent in any such estimation process. {9}------------------------------------------------ ## KBC Securities USA LLC ## Notes to Statement of Financial Condition ( continued) #### *d) Income Taxes* The Company is a single member limited liability company that is treated as a disregarded entity for U.S. Federal income tax purposes and included in the Federal, New York State and New York City income tax returns of the Parent Company. Current and deferred taxes are allocated to the Company under the "benefits for loss" method. Under this method, the company is assumed to file separate returns with the taxing authority, thereby reporting the ir share of taxable income or loss which is then settled as an intercompany transaction with the Parent Company. ASC No. 740 clarifies the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken **in** a tax return. ASC No. 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company accounts for interest and penalties as a component of income tax expense. At December 31 , 2018, management has dete1mined that the Company had no uncertain tax positions that would require financial statement recognition. State and Local Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized. #### *e) Other* The Company follows F ASB ASC No. 450. *Contingencies* which recognizes the contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company translates its foreign currency denominated assets and liabilities at the current exchange rate at the Statement of Financial Condition date. Transactions that are denominated in foreign currencies are translated into United States dollar amounts at the prevailing rates of exchange at the transaction date. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.