# BNY MELLON CAPITAL MARKETS, LLC X-17A-5 (2026-03-02) — Broker-dealer annual report
- Company: BNY MELLON CAPITAL MARKETS, LLC
- Form: X-17A-5
- Filed: 2026-03-02
- Accession: 0001193125-26-086056
- CIK: 785069
- File #: 8-35255
Original filing: https://www.sec.gov/Archives/edgar/data/785069/000119312526086056/d72132dfull.pdf
---
{0}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Statement of Financial Condition
December 31, 2025
(With Report of Independent Registered Public Accounting Firm Thereon)
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KPMG LLP Two Manhattan West 375 9th Avenue, 17th Floor New York, NY 10001
## **Report of Independent Registered Public Accounting Firm**
To the Member and Board of Managers BNY Mellon Capital Markets, LLC:
#### *Opinion on the Financial Statement*
We have audited the accompanying statement of financial condition of BNY Mellon Capital Markets, LLC (the Company) as of December 31, 2025, and the related notes (collectively, 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, 2025, in conformity with U.S. generally accepted accounting principles.
#### *Basis for Opinion*
This 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 provides a reasonable basis for our opinion.
We have served as the Company's auditor since 1986.
New York, New York February 25, 2026
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(An Indirect Wholly Owned Subsidiary of BNY)
December 31, 2025
#### **Table of Contents**
| | Page |
|---------------------------------------------------------|------|
| Report of Independent Registered Public Accounting Firm | |
| Statement of Financial Condition | 1 |
| Notes to Statement of Financial Condition | 2-19 |
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(An Indirect Wholly Owned Subsidiary of BNY)
## Statement of Financial Condition
#### December 31, 2025
#### **Assets**
| Assets: | |
|----------------------------------------------------------------------------------|---------------------|
| Cash | \$
1,717,049 |
| Cash segregated for regulatory purposes | 12,285,890 |
| Receivable from broker-dealers and clearing organizations | 322,098,513 |
| Receivable from customers | 35,715,276 |
| Securities purchased under agreements to resell, net | 2,588,934,250 |
| Securities owned, at fair value (includes \$5,017,055,907 pledged as collateral) | 6,186,204,047 |
| Derivative assets, net | 2,368,74
4 |
| Fees receivable | 3,951,796 |
| Interest receivable | 20,785,082 |
| Receivable from affiliates | 89,445 |
| Furniture and equipment at cost (net of accumulated depreciation of \$2,525,237) | 16,979 |
| Software at cost (net of accumulated amortization of \$17,368,704) | 9,313,218 |
| Deferred tax asset, net | 4,352,128 |
| Other assets | 5,497,183 |
| Total assets | \$
9,193,329,600 |
| Liabilities and Member's Equity | |
| Liabilities: | |
| Securities sold under agreements to repurchase, net | \$
4,500,000,000 |
| Payable to broker-dealers and clearing organizations | 946,359,492 |
| Payable to customers | 1,791,165 |
| Securities sold, not yet purchased, at fair value | 3,329,843,079 |
| Derivative liabilities, net | 18,265,295 |
| Payable to affiliates | 10,395,773 |
| Interest payable | 5,153,855 |
| Accrued compensation and other expenses | 12,479,448 |
| Other liabilities | 5,031,381 |
| Total liabilities | 8,829,319,488 |
| Member's equity | 364,010,112 |
| Total liabilities and member's equity | \$
9,193,329,600 |
See accompanying notes to Statement of Financial Condition.
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## **(1) Organization**
BNY Mellon Capital Markets, LLC (the Company), is a wholly owned subsidiary of BNY Capital Markets Holdings, Inc. (the Parent), which, in turn, is a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY). The Company is a registered broker-dealer with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Company is also a member of the Municipal Securities Rulemaking Board (MSRB) and Securities Investor Protection Corporation (SIPC). The Company is also registered as an introducing futures broker with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA).
The Company provides a wide range of financial services. Its businesses include securities underwriting, distribution, and trading. The Company conducts trading activity with its customers on both a principal and agent basis. Most activities of the Company occur within the United States. Securities products offered and sold by the Company are not insured by the Federal Deposit Insurance Corporation. These securities products are not deposits or other obligations of BNY, are not guaranteed by BNY, and are subject to investment risks including the possibility of loss of principal invested.
The Company clears all its transactions through Pershing LLC (Pershing), an affiliate broker-dealer, on a fully disclosed basis, except for mortgage-backed, United States Treasury and federal agency securities, which are cleared by the Company, and futures, which are cleared by Citigroup Global Markets, Inc. (Citi).
## **(2) Summary of significant accounting policies**
## *(a) Financial statement presentation*
The Company maintains its records in United States dollars. Values are presented in whole dollars unless otherwise stated. These financial statements are prepared in accordance with U.S. generally accepted accounting principles.
#### *(b) Use of estimates*
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying footnotes. Management believes that the estimates utilized in the financial statements are reasonable. Actual results could differ from these estimates. Market conditions could increase the risk and complexity of the judgments in these estimates.
## *(c) Restricted cash*
Cash on deposit for the exclusive benefit of customers in accordance with SEC Rule 15c3-3, which is reported on the Statement of Financial Condition as Cash segregated for regulatory purposes, is considered restricted cash. Cash on deposit with clearing organizations, which is reported on the Statement of Financial Condition as Receivable from broker-dealers and clearing organizations, is also considered restricted cash. Both restricted cash amounts have been presented as part of the beginningof-period and end-of-period reconciliation of the statement of cash flows.
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## *(d) Receivables from and Payables to Broker-Dealers and Clearing Organizations*
Receivables from broker-dealers and clearing organizations include amounts receivable from clearing organizations relating to pending and/or unsettled transactions, clearing deposits, and securities failed to deliver. Payables to broker-dealers and clearing organizations include amounts payable to clearing organizations relating to pending and/or unsettled securities trading activity, margin borrowings and securities failed to receive. Securities failed to deliver and Securities failed to receive represent sales and purchases of securities by the Company, but for which it has not delivered or received the securities on settlement date. Such transactions are initially measured at the sale or purchase price plus any accrued interest.
## *(e) Receivable from and Payable to customers*
Receivable from and Payable to customers represent amounts due from/to customers, primarily related to unsettled securities transactions which are reported net by customer.
## *(f) Securities received from customers*
Securities received from customers in lieu of cash margin are not reflected in the Statement of Financial Condition as the Company does not own such securities and they may only be sold or rehypothecated to the extent the Company requires the equivalent funds to meet regulatory or counterparty requirements.
## *(g) Securities owned and Securities sold, not yet purchased and principal transactions, net*
Financial instruments such as securities owned and securities sold, not yet purchased, are stated at fair value with realized gains and losses, as well as related changes in unrealized gains or losses reflected in principal transactions, net, on a trade date basis on the Statement of Operations. The fair value of such financial instruments is generally based on listed market prices. For financial instruments where prices from recent exchange transactions are not available, the Company determines fair value based on discounted cash flow analysis, comparison to similar instruments and the use of financial models. Financial model-based pricing uses inputs of observable prices, where available, including interest rates, credit spreads, and other factors.
Securities sold, not yet purchased, represent obligations to deliver specified securities. The Company is obligated to acquire the securities sold, not yet purchased at prevailing market prices in the future to satisfy these obligations.
## *(h) Derivative contracts*
Derivatives are stated at fair value with realized gains and losses, as well as related changes in unrealized gains or losses reflected in principal transactions, net, on a trade date basis on the Statement of Operations. Derivatives in unrealized gain positions are recognized as assets while derivatives in unrealized loss positions are recognized as liabilities. Derivatives are reported net by counterparty and after consideration of cash collateral, to the extent they are subject to legally enforceable netting agreements. Derivatives include forward settling trades such as when-issued and to-be-announced
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
("TBA") securities, listed futures contracts and options on futures, and are recorded on a trade date basis. The fair value of such financial instruments is generally based on listed market prices. For financial instruments where prices from recent exchange transactions are not available, the Company determines fair value based on discounted cash flow analysis, comparison to similar instruments and the use of financial models.
## *(i) Fair value measurement*
Fair value is defined under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurement, as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level valuation hierarchy is used for disclosure of fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of the classification hierarchy for measuring fair value are described in footnote 9.
In valuing its positions, the Company uses listed market prices for exchange-traded securities, derivatives, and prices quoted by independent brokers and dealers for U.S. government and other overthe-counter securities and derivatives.
In valuing level 3 securities, if any exist, the Company first looks to current prices (any price not greater than 30 days old) with substantial size for similar securities. If no price is available, the Company utilizes model-based pricing, which takes into account the expected cash flows and credit quality of the financial instrument. See footnote 9 for more information.
## *(j) Securities purchased under agreements to resell and Securities sold under agreements to repurchase*
Securities purchased under agreements to resell and Securities sold under agreements to repurchase are treated as collateralized financing transactions and are carried at amounts at which the securities will be subsequently resold or repurchased plus accrued interest. The Company nets eligible repurchase agreements and resale agreements in the Statement of Financial Condition in accordance with ASC Subtopic 210-20*, Balance Sheet - Offsetting.* See footnote 11 for more information.
It is the Company's policy to take possession of securities purchased under agreements to resell. The Company is required to provide securities to counterparties in order to collateralize repurchase agreements. Once pledged, these securities are considered encumbered securities. The Company minimizes credit risk associated with these activities by monitoring credit exposure and collateral values on a daily basis and requiring additional collateral to be deposited or returned when deemed appropriate.
In the normal course of business, the Company obtains securities under resale agreements on terms that permit it to re-pledge or resell the securities to others.
Interest is accrued on securities purchased under agreements to resell and securities sold under agreements to repurchase contract amounts and are included in the respective lines on the Statement of Financial Condition.
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## *(k) Furniture and equipment*
Furniture and equipment are carried at cost, net of accumulated depreciation and amortization. Furniture and equipment are depreciated using the straight-line method over the respective useful lives of the asset, generally ranging from four to ten years.
## *(l) Income taxes*
The Company is included in the consolidated federal and combined state and local income tax returns filed by BNY Mellon. In addition, the Company files stand-alone tax returns in certain jurisdictions including Pennsylvania. Income taxes are calculated using the modified separate return method, and the amount of current tax expense or benefit is either remitted to or received from BNY Mellon, pursuant to a tax sharing agreement between BNY Mellon and the Company.
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes which generally requires the recognition of tax benefits or expenses on the temporary differences between the financial reporting and the tax basis of assets and liabilities. If appropriate, deferred tax assets are adjusted by a valuation allowance, which reflects expectations of the extent to which such assets are more likely than not to be realized.
In accordance with ASC 740, the Company uses a two-step approach in recognizing and measuring its uncertain tax benefits whereby it is first determined if the tax position is more likely than not to be sustained under examination. If the tax position meets the more likely than not threshold, the position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. A tax position that fails to meet the more likely than not recognition threshold will result in either a reduction of current or deferred tax assets, and/or recording of current or deferred tax liabilities. The Company recognizes accrued interest and penalties, if applicable, related to income taxes as a component of payable to affiliates on the statement of financial condition.
In December 2023, the FASB issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires a public entity to disclose additional disaggregated information related to the existing disclosures for the effective income tax rate reconciliation and income taxes paid. The Company adopted this guidance as of December 31, 2025. The required disclosures are included in Note 14.
## *(m) Leasing*
The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments. The ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date or at lease modification date for certain lease modifications. For all leases, the Company uses a rate that represents a collateralized incremental borrowing rate based on similar terms and information available at lease commencement date or at the modification date for certain lease modifications in determining the present value of lease payments. In addition to the lease payments, the determination of an ROU asset may also include certain adjustments related to lease incentives and initial direct costs incurred. Options
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
to extend or terminate a lease are included in the determination of the ROU asset and lease liability only when it is reasonably certain that we will exercise that option.
Lease expense for operating leases is recognized on a straight-line basis over the lease term, while the lease expense for finance leases is recognized using the effective interest method. ROU assets are reviewed for impairment when events or circumstances indicate that the carrying amount may not be recoverable. For operating leases, if deemed impaired, the ROU asset is written down and the remaining balance is subsequently amortized on a straight-line basis which results in lease expense recognition that is similar to finance leases. The Company is not a party to any leases at December 31, 2025.
## *(n) Expected Credit Losses*
In accordance with FASB ASC 326-20, *Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments*, the Company has recorded a credit reserve of \$81,103 included in Other liabilities on the Statement of Financial Condition. Credit reserves were established based on expected credit loss models and approaches that include consideration of multiple forecast scenarios, unfunded off-balance sheet commitments and other methodologies. Under ASC 326, the Company has elected to use the collateral maintenance provision practical expedient for its collateralized financing agreements.
## *(o) Segment Information*
The Company manages its business within a single operating segment in accordance with FASB ASC 280, *Segment Reporting*. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (CODM), which is the principal executive officer, in deciding how to allocate resources and in assessing performance. Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions, and assesses operating performance. The CODM uses this information, which may be adjusted for items that are non-recurring, as well as regularly provided budgeted or forecasted expense information for the single operating segment, in managing the business.
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## **(3) Securities owned and Securities sold, not yet purchased, at fair value**
Securities owned and securities sold, not yet purchased, at fair value, consist of the following at December 31, 2025:
| | Securities
owned | Securities
sold, not yet
purchased |
|-----------------------------------------|---------------------|------------------------------------------|
| Agency mortgage-backed securities | \$
2,964,572,697 | - |
| U.S. Treasury obligations | 2,391,986,32
2 | 3,282,024,236 |
| Commercial paper | 448,893,865 | - |
| Corporate and sovereign debt securities | 255,438,242 | 41,065,424 |
| U.S. government agency securities | 68,924,815 | - |
| Equity securities | 20,084,90
4 | 6,731,20
0 |
| Certificates of deposit | 19,041,953 | - |
| State and municipal obligations | 15,017,176 | 15,919 |
| Preferred stock | 2,244,073 | 6,30
0 |
| | \$
6,186,204,047 | 3,329,843,079 |
## **(4) Receivable from and Payable to broker-dealers and clearing organizations and customers**
Receivable from and payable to broker-dealers and clearing organizations and customers consist of the following at December 31, 2025:
| | Receivable | Payable |
|-----------------------------------------------------|------------------|-------------|
| Receivable from/payable to clearing brokers | \$
2,276,660 | 532,477,861 |
| Securities fail-to-deliver/receive - broker-dealers | 292,634,720 | 227,823,523 |
| Trades pending settlement | - | 186,058,108 |
| Deposits at clearing organizations | 27,187,133 | - |
| Receivable from and Payable to brokerဩdealers | | |
| and clearing organizations | 322,098,513 | 946,359,492 |
| | | |
| Collateral receivable from/payable to customers | - | 1,791,165 |
| Receivable from/payable to customers | 35,715,276 | - |
| Receivable from and Payable to customers | \$
35,715,276 | 1,791,165 |
The Company clears its customer facilitation transactions, with the exception of mortgage-backed securities, United States Treasury obligations, and federal agency debt securities through Pershing on a fully disclosed basis. Pershing, an affiliated broker dealer, clears all transactions except the aforementioned and futures transactions, which are cleared through Citi. The amount receivable from clearing broker is due from Citi and
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
amount payable to the clearing broker is due to Pershing and is primarily comprised of a margin loan payable for securities owned and financed.
Securities fail-to-receive and fail-to-deliver from brokers represent unsettled trades which are past settlement date that either the Company has not received payment (or delivered securities), or the Company has not received securities (or made payment).
Trades pending settlement represent the contract price of securities to be delivered or received by the Company. Should the counterparty not deliver the securities to the Company, the Company may be required to purchase identical securities on the open market. The fair market value of such securities at December 31, 2025 approximates the amounts owed.
The Deposits at clearing organizations represent balances on deposit that are required in order to do business and are reviewed periodically.
The Company receives and pays collateral against open contractual commitments. Cash collateral is reflected as receivable from or payable to the counterparty, while securities pledged as collateral are disclosed as such, and only recognized on the balance sheet if rehypothecated.
The Company minimizes credit risk by monitoring counterparty credit exposure and collateral values on a daily basis. The Company requires additional collateral to be deposited or returned, and likewise, counterparties request and return collateral as deemed necessary.
## **(5) Furniture and equipment and software**
Furniture, office equipment, computer equipment and software consist of the following as of December 31, 2025:
| Furniture and office equipment | \$
1,530,46
2 |
|--------------------------------|---------------------|
| Computer equipment | 1,011,75
4 |
| Total furniture and equipment | 2,542,216 |
| Less accumulated depreciation | 2,525,237 |
| Furniture and equipment, net | \$
16,979 |
| | |
| Software | \$
26,681,922 |
| Less accumulated amortization | 17,368,704 |
| Software, net | \$
9,313,218 |
## **(6) Securities purchased under agreements to resell and Securities sold under agreements to repurchase**
At December 31, 2025, the Company had received securities with a fair value of \$4,188,147,548 as collateral for the counterparty's obligation for securities purchased under agreements to resell of \$4,187,758,125. These
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
particular transactions are primarily overnight contracts for U.S. Treasury obligations, in which the principal values are reset regularly.
At December 31, 2025, the Company had pledged securities with a fair value of \$6,195,154,217 as collateral for its obligation for securities sold under agreements to repurchase of \$6,098,823,875.
## **(7) Line of credit**
The Company maintains an uncommitted line of credit of \$1 billion with BNY Mellon IHC, LLC. The line of credit is used to finance the Company's trading business. Principal is payable on demand. Interest is accrued at a rate per annum equal to the higher of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Rate in effect on such day plus 2% and is payable on the last day of each calendar month or upon demand of the line of credit principal. None of the line was in use at December 31, 2025 or during 2025.
## **(8) Related-party transactions**
The Company conducts recurring business with affiliated entities including significant financing and operating transactions. During the year ended December 31, 2025, such transactions included purchases of securities under agreements to resell, custody and other advisory services. The affiliates also provide legal, tax, banking, data processing, rent, and other administrative support services to the Company pursuant to cost sharing agreements between the Company and BNY and affiliates.
At December 31, 2025 the margin balance payable to Pershing was \$532,477,861 and is included in Payable to brokers-dealers and clearing organizations. Margin interest is accrued at Pershing's cost to finance plus 30 basis points. The contract price of trades pending settlement at Pershing will become part of the margin balance upon settlement. See footnote 4 for additional information.
As of December 31, 2025, amounts payable to affiliates of \$10,395,773 consist of payables related to accounts payable processing and intercompany service payments made by an affiliate on behalf of the Company including income tax. Amounts payable to and receivable from affiliates are generally settled at least quarterly.
The following table sets forth the Company's related party assets and liabilities as of December 31, 2025:
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(An Indirect Wholly Owned Subsidiary of BNY)
#### Notes to Statement of Financial Condition
December 31, 2025
| Assets: | | |
|-------------------------------------------------------------------------------|---|---------------------------|
| Cash | S | 1.717.049 |
| Receivable from affiliates | | 831,109 |
| Total assets | S | 2,548,158 |
| Liabilities: | | |
| Payable to broker-dealers and clearing organizations
Payable to affiliates | S | 532.477.861
10,395,773 |
| Total liabilities | S | 542,873.634 |
## **(9) Financial instruments**
#### *a) Fair value*
In accordance with ASC 820*,* the Company groups its financial assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the assumptions used to determine fair value.
Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 assets and liabilities include certain debt and equity securities, derivative financial instruments actively traded on exchanges and highly liquid government bonds.
Level 2: Observable inputs other than Level 1 prices, for example, quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs that are observable or can be corroborated, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 assets and liabilities include debt instruments that are traded less frequently than exchange-traded securities and derivative financial instruments whose model inputs are observable in the market or can be corroborated by marketobservable data. Examples in this category are MBS, corporate debt securities and over-the-counter (OTC) derivative contracts.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurements.
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
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(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
The balances of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 are as follows:
| | Assets at fair value as of December 31, 2025 | | | | | | |
|----------------------------------|----------------------------------------------|-----------------|---------|--------------|-----------------|--|--|
| | Level 1 | Level 2 | Level 3 | Netting (1) | Total | | |
| Securities owned, at fair value: | | | | | | | |
| Agency mortgage-backed | | | | | | | |
| securities | \$
- | 2,964,572,697 | - | - | 2,964,572,697 | | |
| U.S. Treasury obligations | 2,391,986,32
2 | - | - | - | 2,391,986,322 | | |
| Commercial paper | - | 448,893,865 | - | - | 448,893,865 | | |
| Corporate and sovereign | | | | | | | |
| debt securities | - | 255,438,24
2 | - | - | 255,438,24
2 | | |
| U.S. government agency | | | | | | | |
| securities | - | 68,924,815 | - | - | 68,924,815 | | |
| | | | | | | | |
| Common equity securities | 20,084,90
4 | - | - | - | 20,084,904 | | |
| Certificates of deposit | - | 19,041,953 | - | - | 19,041,953 | | |
| State and municipal | | | | | | | |
| obligations | - | 15,017,176 | - | - | 15,017,176 | | |
| Preferred equity securities | 2,113,508 | 130,565 | - | - | 2,244,073 | | |
| Total securities | | | | | | | |
| owned, at fair value | 2,414,184,734 | 3,772,019,313 | - | - | 6,186,204,047 | | |
| | | | | | | | |
| Derivative assets, at fair value | | | | | | | |
| Fixed income forwards | - | 22,524,336 | - | (20,155,592) | 2,368,74
4 | | |
| Total fair valued assets | \$
2,414,184,734 | 3,794,543,649 | - | (20,155,592) | 6,188,572,791 | | |
(1) Includes the effect of netting agreements and net cash collateral received.
| | Liabilities at fair value as of December 31, 2025 | | | | | | |
|--------------------------------------------------------------------|---------------------------------------------------|------------|---------|--------------|-----------------------------|--|--|
| | Level 1 | Level 2 | Level 3 | Netting (1) | Total | | |
| Securities sold, not yet
purchased, at fair value: | | | | | | | |
| U.S. Treasury obligations
Corporate and sovereign | \$
3,282,024,236 | | - | - | 3,282,024,236 | | |
| debt securities
Common equity securities
State and municipal | -
6,731,20
0 | 41,065,424 | - | - | 41,065,424
6,731,20
0 | | |
| obligations | - | 15,919 | - | - | 15,919 | | |
| Preferred equity securities | - | 6,30
0 | - | - | 6,30
0 | | |
| Total securities sold,
not yet purchased,
at fair value | 3,288,755,436 | 41,087,643 | - | - | 3,329,843,079 | | |
| Derivative liabilities, at fair value | | | | | | | |
| Fixed income forwards | - | 37,382,183 | | (19,231,022) | 18,151,161 | | |
| Interest rate derivatives | 114,13
4 | - | - | | 114,13
4 | | |
| Total derivative liabilities,
at fair value | 114,13
4 | 37,382,183 | - | (19,231,022) | 18,265,295 | | |
| Total fair valued
liabilities | \$
3,288,869,57
0 | 78,469,826 | - | (19,231,022) | 3,348,108,374 | | |
(1) Includes the effect of netting agreements and net cash collateral paid.
{14}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## *b) Derivative instruments*
The Company enters into various transactions involving financial derivative instruments. These financial instruments include futures, exchange-traded options, forward settling government/agency securities, and agency mortgage-backed securities including TBAs. These derivative instruments are used to manage exposure to market and interest rate risk.
Futures, forward-settling securities and TBAs provide for the delayed delivery of the underlying instrument. As a seller of options, the Company receives a premium in exchange for giving the counterparty the right to buy or sell the security at a future date at a contracted price. As a purchaser of options, the Company pays a premium in exchange for the right to buy or sell the security at a future date at a contracted price. The notional amounts for derivative financial instruments express the dollar volume of the transactions; however, credit risk is much smaller. Futures contracts are executed on an exchange, and cash settlement is transacted the next business day for the market movement. Accordingly, futures contracts generally have minimal credit risk. The counterparty credit risk on derivative financial instruments is limited to the unrealized fair value gains recorded in the Statement of Financial Condition. Market risk is substantially dependent upon the value of the underlying financial instrument and is affected by market forces such as volatility and changes in interest rates.
The following table summarizes the notional amount and credit exposure of derivative instruments at December 31, 2025:
| | Notional value
(in thousands) | Derivative
assets, at fair
value | Derivative
liabilities, at
fair value |
|----------------------------------------------------------------------------------------|----------------------------------|-----------------------------------------|---------------------------------------------|
| Forwards: | | | |
| Fixed income securities | 14,342,079
\$ | 22,524,336 | 37,382,183 |
| Interest Rate Derivatives:
Secured Overnight Financing Rate | | | |
| Futures | 125 | - | 2,667 |
| Federal Funds Futures | 1,750,000 | - | 111,467 |
| Total gross derivatives, at fair value
Impact of netting
Cash collateral applied | \$ | 22,524,336
(19,231,022)
(924,570) | 37,496,317
(19,231,022)
- |
| Total net derivatives, at fair value | \$ | 2,368,744 | 18,265,295 |
{15}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
#### *c) Financial Assets and Liabilities not measured at Fair Value*
The fair values of other financial assets and liabilities (consisting primarily of Receivable from and Payable to broker-dealers and clearing organizations; Receivable from and Payable to customers; Securities purchased under agreements to resell and Securities sold under agreements to repurchase) are considered to approximate their carrying amounts because they have limited counterparty credit risk and are short-term, replaceable on demand, and/or bear interest at market rates.
| | | Summary of financial instruments | | | | | |
|--------------------------------|------------------------------------|----------------------------------|---------|----------------------------------|---------------------|--|--|
| | Fair value as of December 31, 2025 | | | | | | |
| | Level 1 | Level 2 | Level 3 | Total
estimated fair
value | Carrying
amounts | | |
| Assets: | | | | | | | |
| Cash | \$
1,717,049 | - | - | 1,717,049 | 1,717,049 | | |
| Cash segregated for | | | | | | | |
| regulatory purposes | 12,285,89
0 | - | - | 12,285,89
0 | 12,285,89
0 | | |
| Receivable from broker-dealers | | | | | | | |
| and clearing organizations | 27,187,133 | 294,911,38
0 | - | 322,098,513 | 322,098,513 | | |
| Receivable from customers | - | 35,715,276 | - | 35,715,276 | 35,715,27
6 | | |
| Securities purchased under | | | | | | | |
| agreements to resell, net | - | 2,588,934,25
0 | - | 2,588,934,25
0 | 2,588,934,25
0 | | |
| Fees receivable | - | 3,951,79
6 | - | 3,951,796 | 3,951,796 | | |
| Interest receivable | - | 20,785,08
2 | - | 20,785,08
2 | 20,785,08
2 | | |
| Receivable from affiliates | - | 831,109 | - | 831,109 | 831,109 | | |
| Total | \$
41,190,072 | 2,945,128,893 | - | 2,986,318,965 | 2,986,318,965 | | |
| Liabilities: | | | | | | | |
| Securities sold under | | | | | | | |
| agreements to repurchase, net | \$
- | 4,500,000,00
0 | - | 4,500,000,00
0 | 4,500,000,00
0 | | |
| Payable to broker-dealers | | | | | | | |
| and clearing organizations | - | 946,359,49
2 | - | 946,359,49
2 | 946,359,49
2 | | |
| Payable to customers | - | 1,791,165 | - | 1,791,165 | 1,791,165 | | |
| Payable to affiliates | - | 10,395,773 | - | 10,395,773 | 10,395,773 | | |
| Interest payable | - | 5,153,855 | - | 5,153,855 | 5,153,855 | | |
| Total | \$
- | 5,463,700,285 | - | 5,463,700,285 | 5,463,700,285 | | |
{16}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## **(10) Offsetting of assets and liabilities**
The following tables present derivative assets and liabilities and financial instruments that are subject to an enforceable netting agreement.
## *Offsetting of Derivative Assets and Financial Instruments*
| | December 31, 2025 | | | | | | |
|-----------------------------------------------------------------------------------------|-------------------|-------------------------------|----------------------------------------|------------------------------------------------------------------------------|----------------------------------------------------------------------------|--------------------------------|------------|
| (in thousands) | | | Offset in
the | Net assets
recognized
in the
statement
of financial
condition | Gross amounts not offset
in the statement of
financial condition (1) | | |
| | | Gross
assets
recognized | statement
of financial
condition | | Financial
instrument
s | Cash
collateral
received | Net amount |
| Derivative assets subject to
netting arrangements:
Fixed income forwards | \$ | 22,524 | (20,156) | 2,368 | - | - | 2,368 |
| Total derivative assets
subject to netting
arrangements: | | 22,524 | (20,156) | 2,368 | - | - | 2,368 |
| Total derivative assets,
at fair value | \$ | 22,524 | (20,156) | 2,368 | - | - | 2,368 |
| Securities purchased under
agreements to resell, subject to
netting arrangements: | \$ | 4,187,758 | (1,598,824) | 2,588,934 | (2,588,934) | - | - |
(1) The amount reported in collateral received and pledged (including cash) is limited to the amount of related assets presented in the statement of financial condition and therefore any over-collateralization of these assets is not included.
{17}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## *Offsetting of Derivative Liabilities and Financial Instruments*
| | | December 31, 2025 | | | | | | |
|--------------------------------------------------------------------------------------------------------------------------|----|------------------------------------|----------------------------------------|--------------------------------------------|----------------------------------------------------------------------------|--------------------------------|------------|--|
| (in thousands) | | | Offset in
the | Net
liabilities
recognized
in the | Gross amounts not offset
in the statement of
financial condition (1) | | | |
| | | Gross
liabilities
recognized | statement
of financial
condition | statement
of financial
condition | Financial
instruments | Cash
collateral
received | Net amount | |
| Derivative liabilities subject to
netting arrangements:
Fixed income forwards | \$ | 37,382 | (19,231) | 18,151 | - | - | 18,151 | |
| Total derivative liabilities
subject to netting
arrangements: | | 37,382 | (19,231) | 18,151 | - | - | 18,151 | |
| Derivative liabilities not subject to
netting arrangements:
Interest rate derivatives | | 11
4 | - | 114 | - | - | 114 | |
| Total derivative liabilities
not subject to netting
arrangements: | | 11
4 | - | 114 | - | - | 114 | |
| Total derivative liabilities,
at fair value | \$ | 37,496 | (19,231) | 18,265 | - | - | 18,265 | |
| Securities sold under agreement
to repurchase, subject to
netting arrangements:
Securities sold under agreement | \$ | 2,048,824 | (1,598,824) | 450,000 | (450,000) | - | - | |
| to repurchase, not subject to
netting arrangements: | \$ | 4,050,000 | | 4,050,000 | (4,050,000) | - | - | |
| Total securities sold under
agreements to repurchase \$ | | 6,098,824 | (1,598,824) | 4,500,000 | (4,500,000) | - | - | |
(1) The amount reported in collateral received and pledged (including cash) is limited to the amount of related liability presented in the statement of financial condition and therefore any over-collateralization of these liabilities is not included.
{18}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
## **(11) Repurchase Agreements**
The following table presents the contract value of repurchase agreements by maturity and the type of collateral provided to counterparties.
## **Repurchase Contracts Categorized by Type of Collateral Pledged**
| | Overnight and | Less than 30 | |
|--------------------------------------------|---------------------|--------------|---------------|
| | Continuous | days | Total |
| Repurchase Agreements | | | |
| U.S. Treasury obligations | \$
3,004,552,039 | 122,643,681 | 3,127,195,720 |
| U.S. government agency securities | 18,525,829 | - | 18,525,829 |
| Agency mortgage-backed securities | 2,825,746,007 | 127,356,319 | 2,953,102,326 |
| Total Gross Liabilities Collateral Pledged | \$
5,848,823,875 | 250,000,000 | 6,098,823,875 |
The Company's repurchase agreement transactions subject the Company to market risk, as any declines in the fair value of the securities that collateralize the repurchase agreement require the Company to pledge additional collateral based on predefined terms within the agreements.
#### **(12) Collateral Arrangements**
Under the Company's collateralized financing arrangements and other business activities, the Company either receives or provides collateral. As of December 31, 2025, the fair value of securities received and pledged as collateral is detailed in the tables below:
## **Source of available collateral - received:**
| Securities purchased under agreement to resell
Other collateral received | \$
4,188,147,548
37,611,199
4,225,758,747 |
|----------------------------------------------------------------------------------------------------------|----------------------------------------------------|
| Collateral and assets pledged: | |
| Securities sold under agreement to repurchase
Securities collateral pledged to clearing organizations | \$
(1)
6,195,154,217
66,866,525 |
| | \$
6,262,020,742 |
*(1) Collateral and assets pledged includes \$5,017,055,907 of firm securities pledged.*
{19}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
The Securities sold under agreements to repurchase and Securities purchased under agreements to resell transactions are generally documented under industry standard agreements that allow the prompt close-out of all transactions (including the liquidation of securities held) and the offsetting of obligations to return cash or securities by the non-defaulting party, following a payment default or other type of default under the relevant master agreement. The Company minimizes credit risk associated with these activities by monitoring counterparty credit exposure and collateral values on a daily basis and requiring additional collateral to be deposited with or returned by the Company when deemed necessary. The counterparty that receives the securities in these transactions is generally unrestricted in its use of the securities, with the exception of transactions executed on a tri-party basis, where the collateral is maintained by a custodian and operational limitations may restrict its use of the securities. All collateral delivered to counterparties which collateralize Securities sold under agreement to repurchase transactions are considered encumbered assets.
## **(13) Regulatory Requirements**
## *a) Cash and Securities Segregated under Federal and Other Regulations*
The Company performs weekly computations to determine the reserve deposit requirements of the SEC under Rule 15c3-3. As of December 31, 2025, the Company had a \$2,872,152 reserve deposit requirement under SEC Rule 15c3-3, with cash of \$12,285,890 segregated in a special reserve bank account for the exclusive benefit of customers to meet the requirement.
## *b) Net Capital Requirement*
The Company is subject to the Uniform Net Capital requirements of the SEC under Rule 15c3-1, which requires the maintenance of minimum net capital. The SEC's requirements also provide that equity capital may not be withdrawn or cash dividends paid if certain minimum net capital requirements are not met. The Company computes its net capital in accordance with the alternative method of this Rule, which requires the maintenance of minimum net capital equal to the greater of \$250,000 or 2% of aggregate debit items arising from customer related transactions of \$714,042 as defined.
As an introducing broker registered with the CFTC, the Company is also subject to the net capital requirements of Regulation 1.17 of the Commodities Exchange Act. Under Regulation 1.17, the Company is required to maintain the greater of adjusted net capital of \$45,000 or the amount of net capital required by Rule 15c3-1.
At December 31, 2025, the Company had net capital of \$283,490,575, which was \$282,776,533 in excess of the minimum net capital required to be maintained at that date.
Advances to affiliates, dividend payments and other equity withdrawals are subject to certain notifications and other provisions of the SEC Uniform Net Capital Rule or other regulatory bodies.
#### **(14) Income Taxes**
The deferred income taxes reflect the tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities. The Company has a gross deferred tax asset of \$4,454,283 and a gross deferred tax liability of \$102,155 at December 31, 2025. The deferred tax asset is primarily attributable to
{20}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
intangibles and the deferred tax liability is primarily attributable to depreciation. The net deferred tax asset is \$4,352,128.
Federal and state and local taxes payable of \$2,123,427 and \$364,793 respectively, are included in payable to affiliates on the statement of financial condition. State taxes receivable of \$784,272 are included in other assets on the statement of financial condition.
BNY's federal consolidated income tax returns are open to examination from 2017 through 2019 and 2022 and forward. The New York State and New York City income tax returns are open to examination after 2015.
## **(15) Financial Instruments and Related Risks**
In the normal course of business, the Company's activities involve the execution of securities transactions. These activities may expose the Company to off-balance sheet credit risk in the event the counterparty is unable to fulfill its contracted obligations. The Company conducts business with brokers and dealers that are members of the major securities exchanges.
The Company's securities activities are transacted on a delivery versus payment basis. In delivery versus payment transactions, the Company is exposed to risk of loss in the event of the customer's or broker's inability to meet the terms of their contracts. Should the customer or broker fail to perform, the Company may be required to complete the transaction at prevailing market prices. Trades pending at December 31, 2025 were settled without an adverse effect on the Company's financial statements.
Subsequent market fluctuations of securities sold, but not yet purchased may require purchasing these securities at prices which differ from values reflected on the Statement of Financial Condition. Market fluctuations of securities owned may require sale at prices which differ from values reflected on the Statement of Financial Condition. Inventory positions are monitored on a daily basis to minimize the risk of loss.
The Company's exposure to credit risk can be directly impacted by volatile securities markets, which may impair the ability of counterparties to satisfy their contractual obligations.
The Company seeks to control its credit risk through a variety of reporting and control procedures and by applying uniform credit standards maintained for all activities with credit risk.
## **(16) Commitments and Contingencies**
In the ordinary course of business, the Company is routinely a defendant in or party to a number of pending and potential legal actions, including actions brought on behalf of various classes of claimants and regulatory matters. In regulatory enforcement matters, claims for disgorgement and the imposition of penalties and/or other remedial sanctions are possible. Due to the inherent difficulty of predicting the outcome of such matters, the Company cannot ascertain what the eventual outcome of these matters will be; however based on current knowledge and after consultation with legal counsel, the Company does not believe that judgments or settlements, if any, arising from pending or potential legal actions or regulatory matters, either individually or in the aggregate, will have a material adverse effect on the financial position or liquidity of the Company although they could have a material effect on the net income for a given period. The Company intends to defend itself vigorously against all of the claims asserted in these legal actions.
{21}------------------------------------------------
(An Indirect Wholly Owned Subsidiary of BNY)
Notes to Statement of Financial Condition
December 31, 2025
In the normal course of business, certain activities of the Company involve the execution and clearance of customer securities transactions through clearing brokers. These activities may expose the Company to offbalance sheet risk in the event a customer is unable to fulfill its contractual obligation since, pursuant to the clearing agreement, the Company has agreed to indemnify the clearing brokers without limit for losses that the clearing broker may sustain from the clients introduced by the Company. However, the transactions are collateralized by the underlying securities, thereby reducing the associated risk of the position to the changes in the market value of the security through settlement date.
The Company has been responding to a request for information from the SEC and the CFTC concerning compliance with recordkeeping obligations relating to business communications transmitted on unapproved electronic communication platforms. SEC and CFTC have been conducting similar inquiries into recordkeeping practices at other financial institutions. On August 14, 2024, the SEC issued an order under which BNY agreed to pay a \$40 million penalty and to certain undertakings to resolve the SEC matter. The fine has been paid, and BNY is complying with the other settlement terms. On Sept. 4, 2025, the CFTC issued an order under which the BNY agreed to pay \$500,000. The fine has been paid, and the BNY is complying with the other settlement terms. BNY did not seek reimbursement from the Company.
As part of the Company's investment banking activities, the firm regularly enters into agreements which could create firm commitments on behalf of the Company and the issuer or underwriting group, which are generally short term in nature. These firm commitments are subject to the SEC's Net Capital rules and are reported on the Company's Net Capital Computation. As of December 31, 2025, the Company's Net Capital Computation reported firm commitment charges from underwriting activities of \$2,650,000.
## **(17) Subsequent Events**
The Company has evaluated whether any events or transactions occurred subsequent to the date of the financial statements and through February 25, 2026 and determined that there were no material events or transactions that would require recognition or disclosure in the financial statements.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.