# MMC SECURITIES LLC X-17A-5 (2021-02-19) — Broker-dealer annual report - Company: MMC SECURITIES LLC - Form: X-17A-5 - Filed: 2021-02-19 - Period: 2020-12-31 - Accession: 0001105818-21-000001 - CIK: 1105818 - File #: 8-52349 - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Kim Blackmore - Phone: 201-284-4908 - Website: deloitte.com - Signed by: Kim Blackmore (Director, Financial and Operations Principal) Original filing: https://www.sec.gov/Archives/edgar/data/1105818/000110581821000001/MMCS20PublicSECFinal.pdf --- {0}------------------------------------------------ ## MMC SECURITIES LLC (An Indirect Wholly-Owned Subsidiary of Marsh & McLennan Companies, Inc.) SEC ID No. 8-52349 # STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2020 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM This report is filed pursuant to Rule 1 7a-5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT {1}------------------------------------------------ ![](_page_1_Picture_0.jpeg) Deloitte & Touche LIP Tel: +12124924000 Fax: +1 212 489 1687 www.deloitte.com # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Directors and Equity Owner of MMC Securities LLC: ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of MMC Securities LLC (the "Company") as of December 31, 2020, 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 the Company as of December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion The 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 of the financial statement provides a reasonable basis for our opinion. D4 T014J UP February 19, 2021 We have served as the Company's auditor since 1989. {2}------------------------------------------------ # MMC SECURITIES LLC (an Indirect Wholly-Owned Subsidiary of Marsh & McLennan Companies, Inc.) #### STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2020 #### ASSETS | C
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7 | See notes to financial statement. {3}------------------------------------------------ # MMC SECURITIES LLC (an Indirect Wholly-Owned Subsidiary of Marsh & McLennan Companies, Inc.) ### NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2020 ### 1. NATURE OF BUSINESS MMC Securities LLC (the "Company") is an indirect wholly-owned subsidiary of Marsh & McLennan Companies, Inc. ("MMC"). The Company's sole member is Marsh Insurance and Investments LLC (the "Member"). The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("F1NRA") and the Securities Investor Protection Corporation ("SIPC"). The Company is also registered as an introducing broker with the National Futures Association ("NFA"). The Company withdrew from registration as an investment advisor with the SEC on March 11, 2020. The Company provides the following services: - •Underwriting and private placement of catastrophe bonds; - • Investment banking advisory services on sales, acquisitions, capital raising and financial risk solutions through structured transactions; - •Sale of variable products to individual and institutional clients. The Company does not hold customer securities or customer funds and clears transactions through Pershing LLC on a fully disclosed basis. #### 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation -The statement of financial condition is prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"). The Company has performed its evaluation of the subsequent events through the issuance date of the statement of financial condition. Based upon such evaluation, no events were discovered that required disclosure or adjustment to the statement of financial condition. Use of Estimates -The preparation of the statement of financial condition in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the statement of financial condition. Actual results could differ from those estimates. Cash and Cash Equivalents -Cash equivalents consist of demand deposits with original maturities of three months or less. The estimated fair value of the Company's cash equivalents approximates their carrying value due to their short-tenn nature. All of the cash and cash equivalents are held in one major financial institution. Allowance for Credit Losses on Accounts Receivable - On January 1, 2020, the Company adopted the new guidance on the impairment of financial instruments. The Company's policy for providing an allowance for credit losses ("CECL") on its accounts receivable is based on management's best estimate of amounts that will be uncollectible primarily based on the Company's historical experience of collections in its various businesses or other events that may affect the net realizable value of the receivables. {4}------------------------------------------------ An analysis of the allowance for credit losses for the year ended December 31, 2020 is provided below. Prior period analysis is based on the Company's allowance for doubtful accounts model prior to adoption of the new accounting guidance discussed above: | (I
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36 | Income Tax -The Company is treated as a disregarded entity for federal and state income tax purposes; therefore, the taxable income or loss from the Company's operations is allocated to the Member. Accordingly, no provision for federal and state income taxes has been made in the accompanying financial statement. The Company is not subject to federal or state tax audits as an entity separate from the Member. Fair Value of Financial Assets and Liabilities - Substantially all of the Company's financial assets are carried at fair value or contracted amounts which approximate fair value. The Company's financial liabilities, such as payables, are recorded at amounts approximating fair value. ### 3. CONTRACT BALANCES FROM CONTRACTS WITH CUSTOMERS The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records receivables when revenue is recognized prior to payment and it has an unconditional right to payment. The changes in the receivables during the year are related to services invoiced, payment of invoices and adjustments for impairment of the receivable. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. The following presents the Company's contract receivables related to revenue from customers that have been billed not yet collected and deferred revenue that has been billed but the performance obligation has not yet been satisfied as of December 31, 2020: #### Contract receivables (in 000's) | | nd
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7 | ### 4. RELATED PARTY TRANSACTIONS As of December 31, 2020, the Company's receivable from affiliates balance of \$551,158,659 is mainly comprised of interest bearing accounts. The Company transfers certain excess operating cash balances on its accounts with a third party bank to an interest bearing account with MMC for cash management purposes. The estimated fair value of the Company's receivable approximates its carrying value. As of December 31, 2020, the Company's payables to affiliates balance of \$610,383 primarily represent liabilities for the cost of certain administrative services provided to the Company by various companies within MMC. Payables to affiliates are settled on a monthly basis. ### 5. CREDIT FACILITIES MMC and certain of its subsidiaries maintain \$1.8 billion multi-currency five year unsecured revolving credit facility (the "Facility") to support their liquidity needs. The Company is designated as a permitted borrower under the Facility. Subsidiary borrowings under the Facility are unconditionally guaranteed by MMC. The interest rate on this Facility is based on LIBOR plus a fixed margin which varies with MMC's credit ratings. The facility includes a provision for determining a LIBOR successor rate in the event LIBOR reference rates are no longer available. Citibank, N.A. is Administrative Agent and Bank of America, N.A., Deutsche Bank Securities Inc. and HSBC Bank USA, N.A. are Syndication Agents for the Facility. The Facility requires MMC to maintain certain coverage and leverage ratios which are tested quarterly. MMC was in compliance with these financial covenants at December 31, 2020. The Facility will expire in October 2023. There were no drawings on the Facility during the year. The Company had no borrowings outstanding under the Facility at December 31, 2020. #### 6. COMMITMENTS AND CONTINGENCIES The Company has no commitments or contingencies as of December 31, 2020. {6}------------------------------------------------ #### 7. NET CAPITAL REQUIREMENTS The Company is subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934. The Company computes its net capital requirement under the alternate method provided for in Rule 15c3-1, which requires the Company to maintain minimum net capital, as defined, of \$250,000 or 2% of aggregate debit items arising from customer transactions, as defined. At December 31, 2020, the Company had net capital of \$5,417,322, which was \$5,167,322 in excess of its required net capital of \$250,000. As an introducing broker registered with the NFA, the Company is required to and has complied with the Uniform Net Capital Rule (Rule l5c3-1), as discussed above, to meet the requirements of Regulation 1 .17 of the Commodity Futures Trading Commission. > \*\*\*\*\*\* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.