# CONNING INVESTMENT PRODUCTS, INC. X-17A-5 (2020-03-02) — Broker-dealer annual report - Company: CONNING INVESTMENT PRODUCTS, INC. - Form: X-17A-5 - Filed: 2020-03-02 - Period: 2019-12-31 - Accession: 0001285921-20-000001 - CIK: 1285921 - File #: 8-66444 - Material weakness: No - Auditor: PricewaterhouseCoopers, LLP - Auditor location: Hartford, CT - Contact: Thomas Forella - Phone: 860-299-2167 - Website: pwc.com - Signed by: Jung Lee (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1285921/000128592120000001/dec19_audit_conning_3.pdf --- {0}------------------------------------------------ UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours oerresoonse ...... 12.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** SEC FILE NUMBER **B-66444** **FACING PAGE Information Reqnired of Brokers and Dealers Pursuant to Section 17 of the Secnrities Exchange Act of 1934 and Rule 17a-5 Therennder** | REPORT FOR THEPERIODBEGINNINGO1/01/2O19 | | AND ENDING 12/31/2019 | | | |----------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|-----------------------|-------------------------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: Conning Investment Products, Inc. | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | One Financial Plaza | | | | | | | (No. and Street) | | | | | Hartford | CT | | 06103-2627 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Thomas Forella | | | {860)299-2167
(Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
PricewaterhouseCoopers, LLP | | | | | | | (Name - if individual, slate last, first, middle name) | | | | | 185 Asylum Street | Hartford | CT | 06103 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE:
lcertified Public Accountant
Public Accountant
Accountant not resident in United States or any of its possessions. | FOR OFFICIAL USE ONLY | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17 a-5(e)(2)* > 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.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Jung Lee | , swear ( or affirm) that, to the best of | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Conning Investment Products, Inc. | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
---''------------'---------------------------------~ | | of December 31 | , as
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 | | Subscribed and Sworn lo befo(e me, a No;ary 6,
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NOTARYPUB
C | | | My Commission Expires July 31, 2022 | | | -~~~~~~± | ~-
Title | | Notary Public | | | This report** contains (check all applicable boxes):
0 (a) Facing Page.
0 (b) Statement of Financial Condition.
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
(d) Statement of Changes in Financial Condition.
✓✓ | [Zj (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement | | 0 (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
D (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
§ (g) Computation of Net Capital. | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | D U) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | consolidation.
✓ (I) An Oath or Affirmation.
0 (m) A copy of the SIPC Supplemental Repmt | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
D (n) 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}------------------------------------------------ # **Conning Investment Products, Inc.** Financial Statements and Supplementary Schedules pursuant to Securities and Exchange Commission Rule 17a-5 For the year ended December 31, 2019 {3}------------------------------------------------ | Financial Statements | | |-------------------------------------|--| | Statement of Financial Condition 3 | | | Statement of Operations 4 | | |--------------------------------------|--| | Statement of Shareholder's Equity 5 | | | Statement of Cash Flows 6 | | | Notes to Financial Statements 7-13 | | **Report of Independent Registered Pnblic Accounting Firm ................................................................ 1-2** # **Supplementary Schedules** | Schedule I-Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c-3-l Under the
Securities Exchange Act of 1934 14 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Schedule II-
Computation for Determination of Reserve Requirements and Inf01mation Relating to
Possession or Control Requirements Pursuant to Rule 15c-3-3 Under the Securities Exchange Act of | | 1934 15 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Fh·m** To the Board of Directors and Shareholder of Conning Investment Products, Inc. ### *Opinion* **on** *the Financial* **Statements** We have audited the accompanying statement of financial condition of Conning Investmeut Products, Inc. (the "Company") as of December 31, 2019, and the related statements of operations, of shareholder's equity and of cash flows for the year then ended, including the related notes ( collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ### *Basisfo1• Opinion* These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements 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 of these financial statements 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 statements are free of material misstatement, whether due to error or fraud. Our audit included perfmming procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and perfmming 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.** ### *Supplemental Infol'mation* The accompanying Schedule I- Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-1 Under the Securities Exchange Act of 1934 and Schedule II - Computation for Determination of Reserve Requirements and Infmmation Relating to Possession or Control Requirements Pursuant to Rule 15c-3-3 Under the Securities Exchange Act of 1934 have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included dete1mining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with Rule 17a-5 under the Securities Exchange Act of 1934. In our opinion, the Schedule I - Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-1 Under the Securities Exchange Act of 1934 and Schedule II - Computation for Determination of Reserve Requirements and Information Relating to Possession or Control Requirements Pursuant to Rule *PricewaterhouseCoopers LLP, CITYPLACE I, 185 Asylum Stl'eet, Suite 2400, Hartford, CT 06103-3404* T: (860) 241 7000, *www.pwc.com/us* {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) 15c-3-3 Under the Securities Exchange Act of 1934 are fairly stated, in all material respects, in relation to the financial statements as a whole. Hartford, Connecticut Februa1y 28, 2020 We have served as the Company's auditor since 2001. {6}------------------------------------------------ # **CONNING INVESTMENT PRODUCTS, INC. STATEMENT OF FINANCIAL CONDITION AT DECEMBER 31, 2019** | | | 2019 | | |----------------------------------------------------------------------|----|---------|--| | ASSETS | | | | | Cunent Assets: | | | | | Cash and cash equivalents | \$ | 581,753 | | | Accounts receivable, net | | 366,213 | | | Due from affiliate | | 8,617 | | | Prepaid expenses | | 22,633 | | | Total cutTent assets | | 979,216 | | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | | CutTent Llabilites: | | | | | Due to affiliates | \$ | 44,117 | | | fucome taxes payable | | 7,811 | | | Other liabilities and accrued expenses | | 64,278 | | | Total cunent liabilities | | 116,206 | | | Common stock, \$. 0 I par value: 1,000 shares authorized, issued and | | | | | outstanding | | 10 | | | Additional paid in capital | | 832,108 | | | Retained earnings | | 30,892 | | | Total shareholder's equity | | 863,010 | | | Total liabilities and shareholder's equity | \$ | 979,216 | | The accompanying notes are an integral part of these financial statements. {7}------------------------------------------------ # **CONNING INVESTMENT PRODUCTS, INC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2019** | | 2019 | | |-----------------------------------|---------------|--| | REVENUE | | | | Asset1nanagen1entfees | \$
299,347 | | | Sales and marketing fees | 283,617 | | | Interest income and other revenue | 3,350 | | | Total revenues | 586,314 | | | EXPENSES | | | | Professional fees | 462,392 | | | Marketing and production | 10,000 | | | Other operating expenses | 30,462 | | | Total expenses | 502,854 | | | Income before income taxes | 83,460 | | | Income tax provision | 9,812 | | | Net income | \$
73,648 | | The accompanying notes are an integral part of these financial statements. {8}------------------------------------------------ # **CONNING INVESTMENT PRODUCTS, INC. STATEMENT OF SHAREHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019** | | Common
Stock | Additional
Paid in
Capital | Retained
Earnings | Total
Shareholder's
Equity | |----------------------------|-----------------|----------------------------------|----------------------|----------------------------------| | Balance, December 31, 2018 | 10 | 832,108 | (42,756) | 789,362 | | Net income | | | 73,648 | 73,648 | | Balance, December 31, 2019 | \$
10 | \$
832,108 | \$
30,892 | \$
863,010 | The accompanying notes are an integral paJt of these financial statements. {9}------------------------------------------------ # **CONNING INVESTMENT PRODUCTS, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019** | | | 2019 | | |--------------------------------------------------------|----|-----------|--| | Cash flows from operating activities: | | | | | Net income (loss) | \$ | 73,648 | | | Adjustments to reconcile net income (loss) to net cash | | | | | provided by operations: | | | | | DefetTed income taxes | | | | | Changes in assets and liabilities: | | | | | Accounts receivable | | (279,015) | | | Income tax receivable | | 80,036 | | | Due to affiliates | | (44,857) | | | Prepaid expenses | | (5,990) | | | Other liabilities and accrned expenses | | (561) | | | Income tax payable | | 7,811 | | | Net cash used in operating activities | | (168,928) | | | Net change in cash and cash equivalents | | (168,928) | | | Cash and cash equivalents, beginning of the year | | 750,681 | | | Cash and cash equivalents, end of the year | \$ | 581,753 | | | Supplemental disclosures: | | | | | Income tax payments | \$ | 2,110 | | | Income tax refund from affiliate | \$ | 80,145 | | The accompanying notes are an integral part of these financial statements. {10}------------------------------------------------ ## **CONNING INVESTMENT PRODUCTS, INC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2019** # **NOTE 1- ORGANIZATION** Conning Investment Products, Inc. (the "Company") is a securities broker-dealer registered with the Securities and Exchange Conunission ("SEC") under the Securities Exchange Act of 1934 and is a member of the Financial Indush·y Regulatory Authority, Inc. ("FINRA"). The Company serves as an inh·oducing broker-dealer for the purpose of placing institutional investors and does not receive customer funds or securities during the course of its operations and is exempt from the calculation of a reserve requirement pursuant to Rule 15c3-3 subparagraph (k)(2)(i) under the Secmities Exchange Act of 1934. The Company also provides asset management services primaiily for institutional clients that are located in Canada. The Company is registered as an investment adviser with the SEC pursuant to section 203(c)(2)(A) of the Investment Advisors Act of 1940 and is registered with the Ontai·io Securities Commission as an investment adviser under the provisions of the Securities Act (Ontario) in the category of investment counsel and portfolio management. The Company is a wholly-owned subsidiaiy of Conning & Company (the "Parent"). The Parent is a wholly-owned subsidiaiy of Conning Holdings Corp. ("CHC"). CHC is a wholly owned subsidiary of Conning U.S. Holdings, Inc. ("CUSH") and CUSH is a wholly owned subsidiary of Conning Holdings Limited ("CHL''), which is the ultimate parent of all Conning entities. CHL is a wholly owned subsidiary of Cathay Life Insurance Co., Ltd. ("Cathay Life"), a life insurance company based in Taipei, Taiwan, ROC. Cathay Life is a wholly owned subsidiary of Cathay Financial Holding Co., Ltd ("Cathay"), which is also based in Taipei, Taiwan, ROC. Cathay is the ultimate pai·ent of the Company and is publicly h·aded on the Taiwan Stock Exchange. #### **NOTE 2** - **SUMMARY OF ACCOUNTING POLICIES** The accompanying financial statements have been prepared in conformity with accounting p1inciples generally accepted in the United States of Ame1ica (GAAP). The significant accounting policies followed by the Company are summarized below. The Company adopted Accounting Standards Update ("ASU") 2016-02, Leases, as of Januaiy 1, 2019. This new guidance requires balance sheet recognition of assets and liabilities arising from leases, as well as additional disclosures regarding the amount, timing and uncertainty of cash flows from leases. The adoption of this ASU did not impact the Company's financial statements. *Revenue Recognition* - The Company provides investment advisory services. The performance obligation for providing investment advis01y services is satisfied over time since the customer is receiving and consuming the benefits of investment advis01y {11}------------------------------------------------ services as they are provided by the Company. Fee airnngements for investment advis01y services are based on a percentage applied to the customer's assets under management and fees are accrued into income in the period in which the service is provided. Sales and marketing fees ai·e recognized when eained and performance obligations under the terms of placement or partnership agreements have been met. *Cash and Cash Equivalents* - Cash and cash equivalents represent cash and highly liquid inveshnents with original maturities of three months or less. *Concentration of Credit Risk-* Financial instruments which potentially expose the Company to concenh·ation of credit risk consist primarily of cash and cash equivalents held at a creditworthy financial institution. During the year, cash was in excess of the Federal Deposit Insurance Corporation insurance limit of \$250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. *Income Taxes* - Income tax expense or benefit is based on income or loss reported in the financial statements. In accordance with FASB's income tax guidance (ASC 740), defen-ed federal and state income taxes are provided based on an asset and liability approach which requires the recognition of defetTed income tax assets and liabilities for the expected future tax consequences of temporai·y differences between the fmancial statement can-ying amounts and the tax basis of assets and liabilities. The future benefits of defen-ed tax assets are recognized when the realization of such benefits is more likely than not. The Company records a valuation allowance against the deferred income tax asset for that portion of the asset that may not be realized. As of December 31, 2019, the Company recorded a total valuation allowance of \$69,304 (Note 4). The Company is a member of an affiliated group and files a consolidated federal income tax return and combined state and local income tax returns with CUSH. Under a tax allocation agreement, the sepai·ate return basis is utilized, whereby each member computes and pays its tax liability on a separate return basis. In computing their income tax liability on a separate return basis, member companies have the ability to recover taxes paid in a prior year or offset future taxable income to the extent net operating losses or other tax ath-ibutes that they generated are catTied back or forwai·d in any manner permitted under the Internal Revenue Code. The Company has applied Accounting for Uncertainty in Income Taxes (ASC 740) which clai-ifies the accounting for income taxes by prescribing a minimum recognition tln·eshold a tax position is required to meet before being recognized in the financial statements. ASC 740 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim pe1fods, disclosure and transition. The impact of the provisions of ASC 740 is described in greater detail within the income taxes footnote (Note 4). {12}------------------------------------------------ *Use of Estimates* - Management of the Company has made a number of estimates and assumptions relating to the rep01ting of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. #### **NOTE 3** - **RECEIVABLES** Accounts Receivable for the year ended December 31, 2019 were \$366,213 comprised of Sales and Marketing fees of \$280,443 and Asset Management fees of \$85,770. Sales and Marketing fees receivable consisted of placement fees receivable from Aquiline Financial Services Fund IV L.P. ("AFS IV") of \$275,000 and monthly rebates from Securis Fund I ("Securis") of \$5,443 (Note 5). Asset Management fees receivable for the year ended December 31, 2019 were \$85,770 and represent amounts due for investment advisory services. An allowance for doubtful acc01mts for receivables would be established based on management's judgment of the ultimate collectability of accounts receivable. For December 31, 2019, no allowances for doubtful accounts were necessaty or recorded. #### **NOTE 4 - INCOME TAXES** The provision for federal and state income taxes for the year ended December 31, 2019 is as follows: | | 2019 | | |------------------------------|-------------|--| | Cun-en! income tax provision | | | | Federal | \$
3,249 | | | State | 6,563 | | | Defened income tax provision | | | | Federal | | | | State | | | | Total income tax provision | \$
9,812 | | {13}------------------------------------------------ The provision for federal income taxes incmrnd is different from that which could he obtained by applying the statutory federal income tax rate to income before taxes. The significant items causing this difference are as follows as of December 31, 2019: | | | Effective | |-------------------------------|--------------|-----------| | | 2019 | Tax Rate | | Federal Tax Rate | \$
17,526 | 21.0% | | State and Local Income Taxes | 5,184 | 6.2% | | Valuation Allowance | (12,898) | -15.4% | | Federal NOL Rate Differential | | 0.0% | | Total | \$
9,812 | 11.8% | The Components of the net defe1rnd tax assets as of December 31, 2019 are as follows: | | 2019 | | |------------------------------|-------------|--| | Deferred tax assets: | | | | Other accmed expenses | \$
3,824 | | | Federal net operating losses | 21,216 | | | State net operating losses | 44 264 | | | Gross deferred tax assets | 69,304 | | | Valuation allowance | (69,304) | | | Gross defe1rnd tax assets | | | | Deferred tax liabilities | | | | Net defeJl'ed tax assets | \$ | | The Company's deferred tax balances reflect Federal net operating losses of \$101,024 and state net operating losses of approximately \$747,067 as of December 31, 2019. Realization of the defeJl'ed tax asset is dependent upon the continued generation of sufficient taxable income prior to expiration of loss carryforwards. The Company reviews all available evidence to evaluate the recovery of deferred tax assets; including the recent history of losses in all tax jurisdictions and the ability to generate taxable income in future periods. As of December 31, 2019, management believes that is more likely than not that the net carrying value of defe1Ted tax assets will not be realized. Accordingly, management has maintained a valuation allowance in 2019 of \$69,304, a decrease of \$17,333 over prior year-end, reflecting a full valuation allowance on its net defeJl'ed tax assets. {14}------------------------------------------------ As of December 31, 2019, the total amount of umecognized tax benefits, including interest and penalties was zero. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months. The earliest federal tax year open for assessment by the Internal Revenue Service is 2017. #### **NOTE 5 -RELATED PARTY TRANSACTIONS** Conning, Inc. ("CINC"), a registered investment adviser owned by the Parent, provides accounting, legal and compliance, and sales and marketing services to the Company related to the Company's operations as a registered secmities broker dealer. Fees for these services for the year ended December 31, 2019 were \$195,000 and are reflected in professional fees and marketing and production expenses in the Company's statement of operations. The Company receives various other services from CINC. The services provided by CINC include portfolio management, trade execution, credit research and investment accounting and repmting services relating to Canadian dollar assets managed by the Company. Fees for these services for the year ended December 31, 2019 were \$188,273 and are reflected in professional fees in the Company's statement of operations. The Company's operating expenses were \$119,581 for the year ended December 31, 2019. These expenses were originally paid by CINC and reimbmsed by CIP. The Company settles the due to affiliate balances generated by these operating expense transactions monthly. The Company became a placement agent for Global Evolution USA, LLC ("GE USA") on November 5, 2018 under a new placement agreement after CHL acquired a 45% ownership interest in Global Evolution Holding ApS ("GE") on June 28, 2018. GE is a Denmark based investment manager with expeitise in emerging and frontier market strategies and is the parent of GE USA. As of December 31, 2019, no placement fees were earned by CIP under this placement agreement. The Company is a placement agent for Octagon Credit Investors, LLC ("Octagon"). Octagon is a subsidimy of the Parent and is a U.S. based manager of specialty fixed income asset classes with expertise in collateralized loan obligations, bank loans, and high yield bonds. Total Octagon placement fees recognized by the Company and receivable for the year ended December 31, 2019 were \$8,617. The Company provides placement services to Aquiline Capital Partners LLC, ("ACP") and AFS IV under a placement agreement dated December 14, 2018. ACP was the previous owner of CHC. The Company placed three investors into AFS IV, including Cathay Life. Total AFS IV placement fees recognized by the Company and receivable for the year ended December 31, 2019 were \$275,000. {15}------------------------------------------------ Conning Asset Management Ltd ("CAML"), a Ul( based investment adviser owned by CHL, provided placement se1vices to the Company by soliciting European investors to commit capital to Securis. Fees that the Company receives from Securis that are associated with placements made by CAML are paid to CAML by the Company and are not recognized as revenue by the Company. The Company has a payable to CAML for monthly rebates and perf01mance fees from Securis in the amount of \$5,443 for the year ended December 31, 2019. Total fees received from Securis and paid to CAML in 2019 were \$50,263. Due from affiliate is comprised of the following: | | 2019 | | |---------------------------------------------------|------|-------| | Due from Octagon | \$ | 8,617 | | Total due from affiliate | \$ | 8,617 | | Due to affiliates are comprised of the following: | | | | | | 2019 | | | | | | Due to CINC | \$
38,674 | |-------------------------|--------------| | Due to CAML | 5,443 | | Total due to affiliates | \$
44,117 | It is possible that the terms of the transactions mentioned above are not the same as those that would result from transactions among wholly unrelated parties. #### **NOTE 6** - **OTHER LIABILITIES AND ACCRUED EXPENSES** Other liabilities and accrued expenses are comprised of the following: | | 2019 | | |---------------------------------------------|------|--------| | Audit fee payable | \$ | 61,127 | | Miscellaneous payable | | 2,781 | | Sales tax payable | | 370 | | Total other liabilities and accmed expenses | \$ | 64,278 | {16}------------------------------------------------ #### **NOTE** 7 - **NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission's (SEC) Uniform Net Capital Rule (Rule 15c3-l), which requires the maintenance of minimum net capital. The Company has elected to use the basic method, pe1mitted by Rule l 5c3-1, which requires the maintenance of a minimum net capital, as defined, of \$7,747 at December 31, 2019. At December 31, 2019 the Company had net capital, as defmed, of \$453,912 which was \$446,165 over the required minimum net capital. The Company's net capital ratio (aggregate indebtedness to net capital) was approximately .26 to 1. Net capital may fluctuate on a daily basis. The Company claims exemption from the prov1S1ons of Rule !5c3-3 m accordance with Section k(2)(i). #### **NOTE 8 - SUBSEQUENT EVENTS** As of Februaiy 28, 2020, the date in which the financial statements were issued, management dete1mined that no other subsequent events have occun·ed following the balance sheet date of December 31, 2019, which requires recognition or disclosure in the financial statements. {17}------------------------------------------------ ## **SCHEDULE I** # **CONNING INVESTMENT PRODUCTS, INC. COMPUTATION OF NET CAPITAL REQUIREMENT FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934 DECEMBER 31, 2019** | Total shareholder's equity | | \$
863,010 | |-------------------------------------------------------------------------------------------------------------|------------------------|--------------------| | Less non-allowable assets:
Account Receivable
Due from affiliate | \$
366,213
8,617 | | | Prepaid Expenses
Tentative Net Capital | 22,633 | 397,463
465,547 | | Haircuts on Allowable Assets | | 11,635 | | Net capital | | \$
453,912 | | Total aggregate indebtedness | | \$
116,206 | | Minimum net capital requirement (6.6667% of
aggregate indebtedness or \$5,000, which
ever is greater) | \$
7,747 | | | Net capital in excess ofrequirements | 446,165 | | | Net capital | | \$
453,912 | | Ratio of aggregate indebtedness to net capital | | 0.26 to 1 | There are no material differences between this computation and the conesponding computation in the amended unaudited Part II FOCUS Report as of December 31, 2019. {18}------------------------------------------------ SCHEDULE II # **CONNING INVESTMENT PRODUCTS, INC. COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS PURSUANT TO RULE 15c3-3 UNDER THE SECURITIES EXCHANGE ACT OF 1934 DECEMBER 31, 2019** The Company claims exemption from the provision of Rule 15c3-3 in accordance with Section k(2)(i). 15 {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Board of Directors of Conning Investment Products, Inc. We have reviewed Conning Investment Products, Inc.'s assertions, included in the accompanying Conning Investment Products, Inc. Exemption repmt, in which (1) the Company identified 17 C.F.R. § 240.15c3- 3(k)(2)(i) as the provision under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3 (the "exemption provision") and (2) the Company stated that it met the identified exemption provision thronghont the throughout the year ended December 31, 2019 without exception. The Company's management is responsible for the assertions and for compliance with the identified exemption provision throughout the year ended December 31, 2019. 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 the Company's compliance with the exemption provision. A review is substantially less in scope than **an examination, the objective of which is the expression of an opinion on management's asseitions.** 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 asse1tions referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(i) of17 C.F.R. § 240.15c3-3. Febmaiy 28, 2020 {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) # Conning Investment Products, Inc. Exemption Report Conning Investment Products, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R §240.17a-5, "Reports made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.l 7a-5(d)(l) and (4). To the best of its lmowledge and belief, the Company states the following: - 1) The Company claims an exemption from 17 C.F.R. §240.15c3-3 under the provision of 17 C.F.R. §240.15c3-3(k): (2)(i). - 2) The Company met the identified exemption provision in 17 C.F.R. §240.15c3-3(k) throughout the most recent fiscal year without exception. Couning Investment Products, Inc. I, Jung Lee, affirm that, to my best lmowledge and belief, this Exemption Report is true and correct. By: Chie Febt ial Officer & Operations Principal 8,2020 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.