# P.A.N. SECURITIES, LP X-17A-5 (2020-02-25) — Broker-dealer annual report - Company: P.A.N. SECURITIES, LP - Form: X-17A-5 - Filed: 2020-02-25 - Period: 2019-12-31 - Accession: 0001126914-20-000001 - CIK: 1126914 - File #: 8-52964 - Material weakness: No - Auditor: EisnerAmper LLP - Auditor location: New York, NY - Contact: Howard Spindel - Phone: 212-897-1688 - Signed by: Howard Spindel (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1126914/000112691420000001/pan19s5.pdf --- {0}------------------------------------------------ UNTTED ST A TES SECURITIES AND EXCHANGE COMMlSSION Washington, D.C. 20549 0MB APPROVAL 0MB N umber: 3235-0123 Expi~s; August 31, 2020 Estimated average burden hours per resoonse ... 12.00 8-52964 I SEC FILE NUMBER I # **ANNUAL AUDITED REPORT FORM X-17A-5 PARTlli** # **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 | MM/DDNY | ____ O~lt~O_l/_19 ____ ~ANDENDING | 12/31/19
MM/DDNY | |---------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------|---------------------------------| | | A. REGISTRANT LDE:\'TIFICATIO:\' | | | | NAME OF BROKER -
DEALER: | | | | | P.A.N. Securities, LP | | | OFFICIAL USE ONLY | | | | | FIRM ID.NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | 99 Park A venue I &h Floor
(No. and Streel) | | | | | | | | | New York
(City) | NY
(State) | | 10016
(Zip Code) | | | | | | | NAME AND TELEPHONE NUMBER Of PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | Howard Spindel | | | (212~897-1688 | | | | | (Area Co e -
I elephone No.) | | | | | | | | B. ACCOUNTANT IDE:\'TIFICATION | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | | | | | | | Eisner Am per LLP
(Name - | if indjvidual, state Last, first, middle name) | | | | | | | | 750 Third Avenue
(Address) | New York
(City) | NY
(State) | 10017
(Zip Code) | | | | | | | CHECK ONE: | | | | | ~ Certified Public Accounlanl | | | | | D
PubLic Accountam | | | | | D
Accoumant 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 slatemem of facts and circumstances relied* 011 *as lite basis for tlte exemption. See sec Hon 240. l 7a-*5(e)(2).SEC 1410 (3-91) {1}------------------------------------------------ Statement of Financial Condition December 31, 2019 {2}------------------------------------------------ # **This report \*\* contains (check all applicable boxes):** - [x] Report of Independent Registered Public Accounting Finn. - lx] Facing Page. - [x] Statement of Financial Condition. - l J Statement of Operations. - [ ] Statement of Changes in Parmer's Equiry. - [ ] Statement of Cash Flows. - [ ] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - f ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule l 5c3-l under the Securities Exchange Act of 1934. - [ ] Computation for Detenninarion of Reserve Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934. - [ ] lnfonnation Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934 (not # applicable). - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net CapitaJ Pursuant to Rule I 5c3-l (included with item (g)) and the Computation for Determination of Reserve Requiremenrs Under Rule l 5c3-3 (included in item (g)). - l ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - lxJ An Affirmation. - [ ] A copy of the SIPC Supplemental Report. - [ ] Report of Independent Registered Public Accounting Firm Regarding Rule 15c3-3 Exemption Report. - [ ] Statement of Exemption from Rule J 5c3-3. - \*\* *For conditions of confide111;a/ treatment of certain portions of this filing, see section 240. I 7a-5(e)(3).* {3}------------------------------------------------ ## AFFIRMATION l, Howard Spindel. affirm that, to the best of my knowledge and belief, the accompanying statement of financial condition pertaining *to* P **.A.N.** ecurities, LP for the year ended December 31, 2019, is true and correct I further affirm that neither the Partnership nor any officer or director bas any proprietary interest in any account classified solely as that of a customer. Signature Chief Financial Officer Tide ,f ![](_page_3_Picture_6.jpeg) {4}------------------------------------------------ A # REPORT OF lt-lDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To PAN. Securities, LP #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of P.A.N. Securities, LP (the "Partnership") as of December 31 , 2019 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 Partnership as of December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership'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 Partnership 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 procedums included examining, on a test basis, evidanM regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounlin9 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 Partnership's auditor since 2014. EISNERAMPER LLP New York, New York February 24, 2020 {5}------------------------------------------------ # **Statement of** Financial **Condition December 31 , 2019** | Assets | | |----------------------------------------|-----------------| | Cash | 1,662,657
\$ | | Accounts receivable | 3,630,714 | | Due from related party | 38,530 | | Other assets | 9 832 | | Total assets | 5,341,733
\$ | | Liabilities and Partner's Equity | | | Accrued expenses | 19,981
\$ | | Partner's equity | 5,321,752 | | Total liabilities and partner's equity | 5,341,733
\$ | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ # **Notes to Financial Statement December 31 , 2019** # **1. N atnrl! of Opi!ratinn\_c:** P.A.N. Secwities, LP {rhe "Parmership")~ a wholly-owned subsidiary of Portware, LLC (the "Parent" or "Portware"), is a Limited partnershjp whose operations consist of providing access to trade routing software to broker-dealers and their customers. The Partnership's customers consist solely of registered broker-dealers. FactSet Research Systems, Inc., a leading provider of integrated fina11cial information and analytical applications to the global investment community owns all membership interests of the Parent. The Partnership is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). # **2. Summary of Significant Accounting Policies** # **Basis of Presentation** This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingenc assets and liabilities at the date of the financial statement. Actual results could differ from these estimates. # **Revenue Recognition** The revenue recognition guidance under ASC Topic 606, *Revenue from Contracts wilh Customers,* requires that an entity recognize 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 requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (c) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The Partnership's revenue is primarily derived from providing access, maintenance and transactional services ("AMPS") to the broker-dealer community for ongoing integration of their offerings from a licensing agreement with Portware. The Partnership uses contracts as evidence of an arrangement for AMPS. AMPS revenues are recognized when the broker's offering is successfully integrated into a version for a specific client of Portware. Fixed AMPS fees represent access ru1d maintenance fees that are charged on a monthly basis and recognized as earned each month. The performance obligation is providing these services per the contract over the contract period. The Partnership determined that the nature of the promise to the client is to provide daily access to one overall data and analytics platform. {7}------------------------------------------------ # Notes to Financial Statement December 31, **2019** # 2. **Summary of Significant Accounting Policies (continued}** # Revenue Recognition (continued) Transactional based AMPS revenues are calculated based on the number of shares transacted during a given month. The performance obligation is providing these transactional services over the contract period. The Partnership determined that the nature of the promise to the client is to execute these transactions trades on the Partnership's platform. Revenues are recognized as the transactions are completed however, in circumstances where the monthly and annual fees are in excess of agreed upon thresholds, revenues arc annualized and recognized pro rata on a monthly basis throughout the term of the contract. The Company's sources of revenue are disaggregated in its statement of operations. # **Contract Receivables** The Company had contract receivables of \$2,365,631 at January l , 2019 and \$3,630,714 at December 31, 2019. # **Account~ Receiv:ihle :ind Allmnnce for Doubtful Account~** The Partnership considers all accounts receivable at December 31 , 2019 to be collectible and no allowiUlcc for do\1brrnl accounts is d~~mi;d 1wc~ssary. ### **Fair Value of Financial Instruments** At December 31 , 2019, the carrying value of the Partnership's financial instruments, such as accounts receivable, due from related party, and accrued expenses approximate fair value due ro the nature of their short-term maturities. ### **Income Taxes** The Partnership is a disregarded entity for tax purposes and is not subject to federal, state and local iqcom~ ~es. Tl'te Partnership's income is iPcluded in ttie t~able income of ~1e taxable entity that beneficially owns the Pannersbip. The entity which beneficially owns the Parmership is responsible for taxes on its share of the Pa.rmership's taxable income. At December 31 , 2019 management has determined that the Partnership had no uncenain tax positions that would require financial statement recognition. This determination will always be subject co ongoing reevaluation as facts and circumstances may require. ### **Due from Related Party** Due from related party represents amounts advanced to the Parent that will be offset against future distributions. {8}------------------------------------------------ # **Notes to Financial Statement December 31 , 2019** # **3. Transactions with Related Parties** The Partnership's Parent provides administrative services under an expense sharing agreement, including payroll allocations and other operating expenses which expires in December 2020. This agreement renews yearly and is reviewed periodically. During 20 19, the Partnership distributed \$28,300,000 to its Parent, consisting mainly of profits earned in 2019 in the ordinary course of business. # **4. Regulatory Requirements** The Partnership, as a member ofFINRA, is subject to the SEC Uniform Net Capital Rule J5c3-I. This rule requires the maintenance of minimwn net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to J and that equity capital may not be withdrawn or casb dividends paid if the resulting net capital ratio would exceed 10 to I. At December 31 , 2019, the Partnership's net capital was approximately \$ 1,643,000, which was approximately \$1,638,000 m excess of its computed minimum capital requirement of approximately \$5,000. The Partnership docs not handle cash or securities on behalf of customers. Accordingly, it is not affected by SEC Rule I 5c3-3. ## **5. Concentrations** For the year ended December 31 , 2019, approximately 53% of the Partnership's revenues were from six customers. Accounts receivable from these customers were approximately \$2,113,000 as of December 31, 2019. The Partnership maintains its cash balances at one financial institution but does not consider itself at risk in this regard. The Partnership is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. Management monitors the financial condition of this financial institution and does not anticipate any losses on these balances. {9}------------------------------------------------ # **Notes to Financial Statement December 31 , 2019** # 6. **New Accounting Pronouncement** In June 2016, the Financial Accounting Standard~ Board ("F ASB") ii:l:ued Accounting Standards Update ("ASlf') 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the FASB's guidance on the impainncnt of financial instruments. The ASU adds to GAAP an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses ratber than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses, which the F ASB believes will result in more timely recognition of such losses. The ASU is also intended co reduce the complexity of GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the ASU makes targeted changes to the impairment model for available-for-sale debt sccuriries. The new CECL standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods therein. Management is currently evaluating the effect of adopting the new standard and expects that the impact to the Company's financial statements will be minimal. # 7. **Subsequent Events** The Parmersh.ip distributed \$3,250,000 co its Parent in 2020. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.