# CG COMPASS (USA) LLC X-17A-5 (2024-02-28) — Broker-dealer annual report - Company: CG COMPASS (USA) LLC - Form: X-17A-5 - Filed: 2024-02-28 - Period: 2023-12-31 - Accession: 0001271923-24-000002 - CIK: 1271923 - File #: 8-66263 - Type: Broker-dealer - Material weakness: No - Auditor: Meisel, Tuteur & Lewis, P.C. - Auditor location: Roseland, NJ - Contact: Karen Alvarez - Phone: 770-407-3458 - Email: karen.alvarez@acaglobal.com - Website: acaglobal.com - Signed by: Jorge Marin (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1271923/000127192324000002/cgpub.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # **ANNUAL REPORTS FORM X-17A-S PART Ill** 0MB APPROVAL 0 MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 SEC FILE NUMBER 8-66263 **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING **01 /01 /23** MM/DD/VY AND ENDING **12/31** /23 MM/DD/VY **A. REGISTRANT IDENTIFICATION** # NAME OF FIRM: CG COMPASS (USA) LLC TYPE OF REGISTRANT (check all applicable boxes): C!J Broker-dealer D Security-based swap dealer D Major security-based swap participant □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 590 Madison Ave, 33rd Floor | (No. and Street) | | | | | |----------------------------------------------|---------------------------------------------------------------------------|-----------------------------|--|--| | New York | NY | 10022 | | | | (City) | (State) | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Karen Alvarez | (770) 407-3458 | karen.alvarez@acaglobal.com | | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | MEISEL, TUTEUR & LEWIS, P.C. | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 105 Eisenhower Pkwy | Roseland | NJ | 07068 | |-------------------------------------------------|-----------------------|---------|------------------------------------------| | (Address) | (City) | (State) | (Zip Code) | | 9/29/09 | | 3861 | | | l"'
of Reg;,trat12/31 | is true and correct. I further swear (or affirm) that neither the company nor any | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | as that of a customer. | | | | | | | | | | | #### **This filing\*\* contains (check all applicable boxes):** - Iii (a) Statement of financial condition. - **iii** (b) Notes to consolidated statement of financial condition. - D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation **S-X).** - D (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-l, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit **A** to§ 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - **iii** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - Iii (s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable. - x (t) Independent public accountant's report based on an examination of the statement of financial condition. - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - Iii (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.l 7a-S or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). D (z) Other: \_\_\_\_\_\_ \_ \_\_\_\_\_\_\_ \_ \_ \_ \_ \_\_\_\_ \_ \_ \_ \_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*To request confidential treatment of certain portions of this f iling, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ # **CG Compass (USA) LLC (A** Wholly-Owned Subsidiary of Compass Group Holdings Inc.) Financial Statement December 31 , 2023 Public Document {3}------------------------------------------------ ## CG Compass (USA) LLC (A Wholly-Owned Subsidiary Of Compass Group Holdings Inc.) | Contents: | | |--------------------------------------------------------------------------------------------------------------------|-----| | Report of Independent Registered Public Accounting Firm | | | Financial Statement: | | | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3-6 | | Exemption Report SEA Rule 17a-5(d)(4) | 7 | | Report of Independent Registered Public Accounting Firm
Review of the Exemption Report SEA Rule 17a-5(g)(2)(ii) | 8 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Certified Public Account ant s Management Consultants ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of . CG Compass (USA) LLC (A Wholly-Owned Subsidiary of Compass Group Holdings Inc.) ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of CG Compass (USA) LLC (the "Company") as of December 31, 2023, 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 CG Compass (USA) LLC as of December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. ## **Basis for Opinion** This financial statement is the responsibility of CG Compass (USA) LLC's management. Our responsibility is to express an opinion on CG Compass (USA) LLC'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 CG Compass (USA) LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and thePCAOB. 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. *j( J,~)* &L~ P. c. MEISEL, TUTEUR & LEWIS, P.C. We have served as CG Compass (USA) LLC's auditor since 2014. Roseland, New Jersey February 27, 2024 {5}------------------------------------------------ ## CG Compass (USA) LLC (A Wholly-Owned Subsidiary of Compass Group Holdings Inc.) # Statement of Financial Condition December 31 , 2023 Assets | Cash
Receivables from clearing organization (see note 3)
Due from affiliates (see note 4)
Other receivables
Other assets | \$
825,767
1,576,750
178,356
98,152
46,290 | |--------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------| | Total Assets | \$
2,725,315 | | Liabilities and Member's Capital | | | Accounts payable and accrued liabilities
Due to affiliates (see note 4)
Due to parent (see note 4) | \$
299,553
55,646
24,947 | | Total Liabilities | 380,146 | | Commitments and Contingencies | | | Member's Capital | 2,345,169 | | Total Liabilities and Member's Capital | \$
2,725,315 | See accompanying notes to the financial statement. **PUBLIC DOCMENT** {6}------------------------------------------------ ## **1. Organization and Nature of Business** CG Compass (USA) LLC (the "Company") was organized under the laws of Delaware on October 1, 2003 and is a wholly-owned subsidiary of Compass Group Holdings Inc. (the "Parent"). The Company is a brokerdealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company was granted registration as a broker dealer on May 26, 2004. The Company earns commissions and markups on trading equity and fixed income securities and trailers and loads on mutual funds. Client funds are held in the name of each client at Pershing LLC (the "Clearing Firm" or "Pershing") and the Company does not engage in proprietary trading activities. The Company participates in a variety of financial and administrative transactions with related parties and affiliates. Though generally at commercial rates, it is possible that because of these relationships, the terms of some of these transactions are not the same as those that would result from transactions among wholly unrelated parties. ### **2. Summary of Significant Accounting Policies** #### Basis of Financial Statement Presentation The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The accounting policies and reporting practices of the Company conform to the predominant practices in the broker-dealer industry. #### Use of Estimates The preparation of financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement, and the reported amounts of revenues and expenses during the reporting period. Certain amounts included in the financial statement are estimated based on currently available information and management's judgment as to the outcome of future conditions and circumstances. Changes in the status of certain facts or circumstances could result in material changes to the estimates used in the preparation of the financial statement and actual results could differ from the estimates and assumptions. Every effort is made to ensure the integrity of such estimates. ### Government and Other Regulation A broker-dealer of securities business is subject to significant regulation by various governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. As a registered broker-dealer, the Company is subject to the Securities and Exchange Commission's net capital rule (Rule 15c3-1) which requires that the Company maintain a minimum net capital, as defined. #### Cash For purposes of presentation on both the Statement of financial condition and the statement of cash flows, the Company considers highly liquid instruments, with original maturities of three months or less that are not held for sale in the ordinary course of business, to be cash. At December 31 , 2023, cash consists of cash held in checking and savings bank accounts in the amount of \$825,767. Cash balances may, at a limited number of banks and financial institutions, periodically exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage. The Company believes it mitigates this risk by investing in or through major financial institutions and primarily in funds that are insured by the United States federal government. {7}------------------------------------------------ ## **2. Summary of Significant Accounting Policies (continued)** #### Other Assets Other assets include prepaid expenses and deposits with vendors. #### Fair Value of Financial Instruments Cash, receivables from clearing organization, due from parent, due from affiliates, other receivables, other assets, accounts payable and accrued liabilities, payable to clearing organization, due to affiliates and due to parent are all recorded at the contractual amounts, which approximates fair value. These financial instruments are generally short term in nature and approximate market rates. #### Accounts Payable and Accrued liabilities Accounts payable and accrued expenses include accruals for employee related compensation, employee benefits and third-party services, as well as other payables. #### Income Taxes The Company is treated as a partnership for federal income tax purposes and generally would not incur income taxes or have any unrecognized tax benefits. Instead, its earnings and losses are included in the tax return of its member and taxed depending on the member's tax situation. As a result, the financial statement do not reflect a provision for income taxes. The Company recognizes, and measures tax positions taken or expected to be taken in its tax return based on their technical merit and assesses the likelihood that the positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. Interest and penalties on tax liabilities, if any, would be recorded in expenses. The U.S. Federal jurisdiction, New York and Florida are the major tax jurisdictions where the Company files income tax returns. The Company is generally no longer subject to U.S. Federal examinations by tax authorities for years before 2020. No interest expense or penalties have been assessed for the year ended December 31, 2023. #### **3. Receivables from clearing organization** The Company has an agreement with Pershing **LLC** ("Pershing") to provide execution and clearing services on behalf of its customers on a fully disclosed basis. All customer records and accounts are maintained by Pershing. Pershing is a member of various stock exchanges and is subject to the rules and regulations of such organizations as well as those of the Securities and Exchange Commission. Receivables from the clearing broker include amounts due on proprietary unsettled cash and margin transactions and commissions earned. As of December 31 , 2023, the Company has the following receivables from clearing organization as reflected on the accompanying statement of financial condition: | Receivables | \$
1,326,750 | |------------------|-----------------| | Clearing deposit | 250,000 | | Total | \$
1,576,750 | | | | {8}------------------------------------------------ ## **4. Transactions with Related Parties** The Company is part of a larger financial services organization and routinely conducts intercompany and related party transactions with the Parent and certain affiliates as defined by service agreements. ## Transactions with Parent As of December 31 , 2023, the payable due to the Parent from the Company totaled \$24,947. This payable is for payroll, office expenses, and various other operational expenses paid by the Parent on the Company's behalf. ### Transactions with Affiliated Entities Affiliates of the Company receive and provide support services from/to the Company under service level agreements that define the services to be provided to/by those affiliates and the basis upon which the Company will reimburse them or be reimbursed for expenses incurred in providing those services. The Company shares its office space as well as various administrative services with affiliates of the Company. The Company entered into an expense sharing agreement whereby all expenses associated with the operations of the Company paid by the affiliated entity were charged to the Company. Under the agreement, certain expenses of the affiliated entity such as payroll costs, rent and office expenses are allocated to the Company at cost as well as all direct expenses of the Company paid on behalf of the Company. The Company has entered into service agreements with companies affiliated through common ownership under which the Company earns fees for providing various introductory, brokerage, administrative, and other professional services as defined by service agreements. As for December 31, 2023, the Company has the following balances reflected on the accompanying statement of financial condition with affiliated entities: | Due from affiliates | | |---------------------------------------------------------|---------------| | Introductory, brokerage, administrative, other services | | | provided by the Company | \$
178,356 | | | | | Due to affiliates | | | Expense sharing agreement related expenses | \$
1,101 | | Professional services provided to the Company | 54,544 | | Total due to affiliates | \$
55,646 | The due to and from affiliates balances reflected on the accompanying statement of financial condition are noninterest bearing and are due on demand. The transactions with affiliates described above and the effect thereof on the accompanying financial statement may not necessarily be indicative of the effect that might have resulted from dealing with non-affiliated parties. {9}------------------------------------------------ ### **5. Concentration of Credit Risk** In the normal course of business, the Company encounters economic risk, mainly comprised of credit risk and market risk. Credit risk arises from the customer securities activities which are transacted on either cash or margin basis. These transactions may expose the Company to off-balance-sheet risk in the event the customer is unable to fulfill its contracted obligations and margin requirements are not sufficient to fully cover losses which customers may incur. In the event the customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfill those obligations. In connection with its clearing arrangements, the Company is required to guarantee the performance of its customers in meeting their contracted obligations. Concentrations of credit risk arise when a number of customers are engaged in similar business activities, activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. As a securities broker and dealer, the Company is engaged in various brokerage and trading activities with domestic and international investors. The Company attempts to minimize credit risk associated with these activities by monitoring customer credit exposure and collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Company when necessary. The credit risk is also minimized by the careful monitoring of customer accounts by the clearing firm. At various times during the year, the Company has maintained deposits with other financial institutions in excess of amounts insured. The exposure to the Company from these transactions is solely dependent upon daily balances and the financial strength of the respective institutions. ### **6. Regulatory Requirements** The Company, as a registered broker-dealer in securities, is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1 ), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1 ). At December 31 , 2023, the Company had net capital of \$1 ,938,677 which was \$1 ,913,334 in excess of its required net capital of \$25,343. At December 31 , 2023, the ratio of Aggregate Indebtedness to Net Capital was .20 to 1. The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company does not hold customers' cash or securities. #### **7. Commitments and Contingencies** The Company is exposed to various asserted and unasserted potential claims encountered in the normal course of business. In the opinion of management, the resolution of these matters will not have a material effect on the Company's financial position or results of operations. ## **8. Subsequent Events** The Company has considered subsequent events and transactions through February 27, 2024, the date the financial statement was issued, noting no material events requiring disclosure or recognition in the Company's financial statement. {10}------------------------------------------------ ## Exemption Report SEA Rule 17a-5(d)(4) February 27, 2024 To Whom It May Concern: The below information is designed to meet the Exemption Report criteria pursuant to SEA Rule 17a-5(d) (4): CG Compass (USA) LLC is a broker/dealer registered with the SEC and FINRA. Pursuant to paragraph k(2)(ii) of SEC Rule 15c3-3, the Company is claiming an exemption from SEC Rule 15c3-3 for the fiscal year ended December 31, 2023. The Company has met the identified exemption provisions throughout the most recent fiscal year without exception. The above statement is true and correct to the best of my and the Company's knowledge. G.n-lt4l, m.tlJU,n,; Signed: \_(c....\_ r \_\_ *0 \_\_\_\_\_\_\_\_\_\_ \_* Name: Jorge Marin Title: CEO {11}------------------------------------------------ ![](_page_11_Picture_0.jpeg) Certified Public Accountants Management Consultants ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of CG Compass (USA) LLC (A Wholly-Owned Subsidiary of Compass Group Holdings Inc.) We have reviewed management's statements, included in the accompanying Exemption Report for SEA Rule 17 a-5( d) ( 4), in which (1) CG Compass (USA) LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which CG Compass (USA) LLC claimed an exemption from 17 C.F.R. §240.15c3-3:(k)(2)(ii) (the "exemption provisions") and (2) CG Compass (USA) LLC stated that CG Compass (USA) LLC met the identified exemption provisions throughout the most recent fiscal year without exception. CG Compass (USA) LLC's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about CG Compass (USA) LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in p,ragraph (k)(Z)(ii) of Rule !Sc3-3 under the **SecuritiflJ,** ~/ **iL~ P. C.** MEISEL, TUTEUR & LEWIS, P.C. Roseland, New Jersey February 27, 2024 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.