# GLOBAL EXECUTION BROKERS, LP X-17A-5 (2020-02-26) — Broker-dealer annual report - Company: GLOBAL EXECUTION BROKERS, LP - Form: X-17A-5 - Filed: 2020-02-26 - Period: 2019-12-31 - Accession: 0001224656-20-000001 - CIK: 1224656 - File #: 8-65878 - Material weakness: No - Auditor: EisnerAmper LLP - Auditor location: New York, NY - Contact: Robert Sack - Phone: 6106172812 - Signed by: Robert C Sack (Treasurer) Original filing: https://www.sec.gov/Archives/edgar/data/1224656/000122465620000001/geb2019sfc.pdf --- {0}------------------------------------------------ **UNJTEDST ATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** #### **0MB APPROVAL 0MB Number:** 3235-0123 **Expires: August** 31, 2020 **Estimated average burden** hours rres nse ...... 12.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | SEC FILE NUMBER | | | |-----------------|---------|--| | | | | | | | | | | 8-65878 | | **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 TifE PERIOD BEGINNTNG ___ 0_1_/0_1_/_1 _9 ___ AND | | END ING _ | ___ 12_ /_3_1_/1_9 __ _ | |----------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|-------------------|--------------------------------| | | MM/00/YY | | MM/00/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER; GLOBAL EXECUTION BROKER, LP
ADD RESS OF PRTNCf PAL PLACE OP BUSINESS: (Do not use P.O. B ox No.) | | OFFICIAL USE ONLY | | | | | FIRM 1.D. NO. | | | 401 CITY AVENUE, SUITE 220 | | | | | | (No. and Street) | | | | BALA CYNWYD | PA | | 19004 | | (City) | (State) | | (Zip Code} | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
ROBERT SACK | | | 61�17-2812 | | | B. ACCOUNTANT IDENTIFICATION | | (Arca Code - Telephone Number) | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
EISNERAMPER | (Name - ,f Individual, slate last. first. middle name) | | | | 750 THIRD AVENUE | NEW YORK | NY | 10017 | | (Address) | (City) | (State) | (Zip Code) | | | | | | | ClfECK ONE:
l✓lcertified Public Accountant | | | | | □
Public Accountant | | | | | □
Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | *\*Claims/or exemption from the requirement that the annual report be covered by the opinion of an independent public accountant mus£ be supported by a slateme/11 of facts and circumstances relied on as the basis for the exemption. See Section 140. I 7a-5(e)(l)* > **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 {06-02) {1}------------------------------------------------ # **OATH OR AFFIRMA Tl ON** | I, | | __REOB RT__C_SA_K C_______________________ , swear (or affirm) that, to the best of | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
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31 | 20 19 | are true and correct. I further swear (or affirm) that | | classified solely as that of a customer, except as follows: | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | Commonwealth ol Pennsylvania | | - | | Naranol Seal | | Signature | | J.;Nl�E BEATY -Mtary Pubic
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This report** contains (check all applicable boxes):
0 (a) Facing Page
(b) Statement of Financial Condition.
✓
(c) Statement of Income (Loss).
(d) Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital.
(h) Computation for D etermination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
O (j)
Computation for D etermination of the Reserve Requirements Under Exhibit A of Rule I Sc3-3.
consolidation.
(1) An Oath or Affirmation. | | A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule I 5c3-1 and the
O (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | (m) A copy of the SIPC Supplemental Report. | | (o) 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), | | | {2}------------------------------------------------ **(a limited partnership)** **STATEMENT OF FINANCIAL CONDITION** **December 31, 2019** {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) **EisnerAmper LLP** 750 Third Avenue **New York, NY 10017 T 212 949.8700 F 212.891.4100** -- ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** The Partners of Global Execution Brokers, LP #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Global Execution Brokers, LP (the "Entity") 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 Entity 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 Entity's management. Our responsibility is to express an opinion on the Entity'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 Entity 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 lhe 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 Entity's auditor since 2010. EISNERAMPER LLP New York, New York February 20, 2020 {4}------------------------------------------------ ## **Statement of Financial Condition December 31, 2019** | Assets | | |-------------------------------------------------------------|--------------------------| | Cash | \$
252 | | Receivable from clearing brokers | 48,605,426 | | Accrued trading receivables | 15,897,054 | | Receivable from affiliates | 18,684,147 | | Fixed assets (net of accumulated depreciation of \$735,138) | 2,698,665 | | Other assets | 139,429 | | Total assets | \$
861
0241
973 | | Liabilities and partners' capital | | | Marketing and transaction fees payable | \$
30,020,525 | | Payable to affiliates | 918,142 | | Accrued compensation | 28,617 | | Accrued expenses and other liabilities | 175,110 | | Total liabilities | 31,142,394 | | Partners' capital | 54,882,579 | | Total liabilities and partners' capital | \$
861
0241973 | {5}------------------------------------------------ #### **Notes to Statement of Financial Condition December 31, 2019** #### **NOTE A - ORGANIZATION** Global Execution Brokers, LP (the "Entity") is a registered broker-dealer with the Securities and Exchange Commission (the "SEC"). The Entity's designated self-regulatory organization is the Chicago Board Options Exchange (the "CBOE"). The Entity is a member of the National Futures Association (the "NFA") and it is registered with the Commodity Futures Trading Commission ("CFTC"). The Entity provides order execution services on various exchanges and alternative trading systems for affiliates. The Entity is owned 99.9% by Susquehanna International Group, LLP ("SIG") and 0.1 % by SFG Partner, LLC. #### **NOTE B -SIGNIFICANT ACCOUNTING POLICIES** The Entity records purchases and sales of securities, revenue from order flow and related expenses on a tradedate basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. The Entity maintains cash in bank accounts which, at times, may exceed federally insured limits. Depreciation of fixed assets is computed using the double-declining balance method over the estimated useful life of the assets. Revenue from contracts with customers consists of order flow and order execution services provided to affiliates. Each time the Entity provides order flow or executes an order, it has fulfilled all performance obligations, and therefore, recognizes and records the revenue associated with order flow and order execution on a trade date basis. This statement of financial condition has been prepared in conformity with accounting principles generally accepted in the United States of America, which require the use of estimates by management. #### **NOTE C - RECEIVABLE FROM CLEARING BROKERS AND CONCENTRATION OF CREDIT RISK** The clearing and depository operations for the Entity are provided by Merrill Lynch Professional Clearing Corp. At December 31, 2019, substantially all of the amounts receivable from clearing brokers reflected on the statement of financial condition are amounts due from this clearing broker. #### **NOTE D - RELATED PARTY TRANSACTIONS** The Entity is affiliated through common ownership with Susquehanna Technology Management, Inc. ("STMI"), and Waves Licensing, LLC. SIG acts as a common payment agent for the Entity and various affiliates for various direct and indirect operating expenses. The Entity pays for the indirect costs at an amount agreed upon between the Entity and SIG based on allocations determined at SIG's discretion. Included in payable to affiliates is \$507,162 related to these direct and indirect operating costs. SIG provides infrastructure support services to the Entity and various affiliates. The Entity pays a monthly management fee for these services based on allocations determined at SIG's discretion. Included in payable to affiliates is \$11,613 related to these services. {6}------------------------------------------------ #### **Notes to Statement of Financial Condition December 31, 2019** #### **NOTE D - RELATED PARTY TRANSACTIONS (CONTINUED)** STMI provides administrative and technology services to the Entity and various affiliates. The Entity pays a monthly management fee for these services based on allocations determined at STMl's discretion. Included in payable to affiliates is \$39,924 related to these services. The Entity enters into agreements with order flow providers and pays the providers an agreed-upon marketing fee for sending their orders through the Entity's order routing system. The Entity aggregates this order flow and may give preference to affiliates which are liquidity providers on the exchange where such orders are executed. In return for giving preference to these affiliates, the Entity receives payment for order flow directed to it by these affiliates. Included in receivable from affiliates is \$12,646,339 related to this arrangement. Affiliates of the Entity which are liquidity providers on various exchanges may direct their order flow providers to route orders by way of the Entity's router and execution services. These affiliates benefit from this activity and make payments for order flow directly to such order flow providers based on previously agreed-upon rates. In these instances, the Entity has no liability regarding the affiliates' payments for order flow and only provides the routing and execution services on behalf of its affiliates. This arrangement is reviewed annually and adjusted as deemed necessary by management. The Entity has a licensing agreement with Waves Licensing, LLC. The agreement allows the Entity to utilize Waves Licensing, LLC's intellectual property and research and development, of which Waves Licensing, LLC is the exclusive owner. As consideration for the license, the Entity pays an annual licensing fee equal to a percentage of the Entity's net trading profits, if any, as defined in the licensing agreement. Included in payable to affiliates are licensing fees to Waves Licensing, LLC amounting to \$359,335. The Entity executes trades for affiliated broker-dealers for which it receives a fee or owes a rebate, based on liquidity provided. The fee is based on trading and execution charges, plus a surcharge to cover other costs and, for certain affiliates, receives a fixed monthly fee to cover other order execution charges. Included in receivable from affiliates is a net amount due from these affiliates of \$6,037,808 related to these fees. Because of their short-term nature, the fair values of the payable to and receivable from affiliates approximate their carrying amounts. The Entity and various other entities are under common ownership and control. As a result, management can exercise its discretion when determining which entity will engage in new or current business activities and/or trade new products. Therefore, the financial position presented herein may not necessarily be indicative of that which would be obtained had these entities operated autonomously. #### **NOTE E - DERIVATIVE FINANCIAL INSTRUMENTS** Derivative financial instruments may be used to manage market risk and to take an active long or short position in the market. Should interest rates or credit spreads move unexpectedly, anticipated benefits may not be achieved and a loss realized. Furthermore, the use of derivative financial instruments involves the risk of imperfect correlation in movements in the price of the instruments, interest rates and the underlying assets. Derivatives used for risk management include options. The following table sets forth the annual volume of the Entity's derivative financial instruments by major product type on a gross basis as of December 31, 2019: {7}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2019** # **NOTE E - DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)** **Approximate Annual Volume (Contracts)** **Options** **72,457** ## **NOTE F - INCOME TAXES** **No provision for federal income taxes has been made because the Entity is a partnership and, therefore, is not subject to federal income taxes. The Entity is currently not subject to state or local income taxes.** **At December 31, 2019, management has determined that there are no material uncertain income tax positions.** # **NOTE G - NET CAPITAL REQUIREMENT** **As a registered broker-dea er, the Entity is subject to the SEC's Uniform Net Capital Rule 1 5c3-1 and is also subject to the net capital requirements of the CFTC Regulation 1 .17 and the requirements of the NFA. The Entity computes its net capital under the alternative method permitted by the rule, which requires it to maintain minimum net capital of \$250,000. At December 31 , 2019, the Entity had net capital of \$21 ,424,031 which exceeded its requirement of \$250,000 by \$21,174,031 .** # **NOTE H - SUBSEQUENT EVENTS** **Subsequent to year end, a partner made a capital contribution of \$6,000,000.** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.