# INVESTEC SECURITIES (US) LLC X-17A-5 (2020-06-04) — Broker-dealer annual report - Company: INVESTEC SECURITIES (US) LLC - Form: X-17A-5 - Filed: 2020-06-04 - Period: 2020-03-31 - Accession: 0001344804-20-000002 - CIK: 1344804 - File #: 8-67162 - Material weakness: No - Auditor: Ernst & Young - Auditor location: New York, NY - Contact: Steve Narov - Phone: 2122595617 - Signed by: Steve Narov (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1344804/000134480420000002/publicfilebw.pdf --- {0}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION Investec Securities (US) LLC Year Ended March 31, 2020 With Report of Independent Registered Public Accounting Firm (SEC I.D. No. 8-67162) {1}------------------------------------------------ # Investec Securities (US) LLC # Statement of Financial Condition Year Ended March 31, 2020 ## Contents | Facing page and oath or affirmation | | |---------------------------------------------------------|--| | Report of Independent Registered Public Accounting Firm | | | Statement of Financial Condition | | | Notes to Financial Statements | | {2}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: 3235-0123 Expires: "VHVTU Estimated average burden hours per response.. . . . . 12.00 **8-** SEC FILE NUMBER 67162 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART III** | FACING PAGE | | |-------------|--| | | | **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | 04/01/2019 | 03/31/2020
REPORT FOR THE PERIOD BEGINNING______________________________ AND ENDING______________________________ | | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|--|--|--| | | MM/DD/YY | | MM/DD/YY | | | | | A.
REGISTRANT IDENTIFICATION | | | | | | | | Investec Securities (US) LLC
NAME OF BROKER-DEALER: | | | OFFICIAL USE ONLY | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | | | 10 East 53rd Street, 22nd Floor
___________________________________________________________________________________________________________________ | | | | | | | | | (No. and Street) | | | | | | | /FX:PSL
_____________________________________________________________________________________________________________________ | /FX:PSL | | 10022 | | | | | (City) | (State) | | (Zip Code) | | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Steve Narov
_____________________________________________________________________________________________________________________
B. | ACCOUNTANT IDENTIFICATION | | (212) 259-5617
(Area Code – Telephone Number) | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Ernst & Young LLP
_____________________________________________________________________________________________________________________ | | | | | | | | | (Name – if individual, state last, first, middle name) | | | | | | | 5 Times Square
_____________________________________________________________________________________________________________________ | New York | NY | 10036 | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | CHECK ONE:
✔ | | | | | | | | Certified 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 240.17a-5(e)(2)* **Potential persons who are to respond to the collection of information contained in this form are not required to respond** SEC 1410 () **unless the form displays a currently valid OMB control number.** {3}------------------------------------------------ #### OATH OR AFFIRMATION | T Steve Narov | sweath the model the swear (or affirm) that, to the best of | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
Investec Securities (US) LLC | | | of March 31 | , 2020 are true and correct. I further swear (or affirm) that | | neither the company nor any partner, principal officer or director has any proprietary interest in any account | | | classified solely as that of a customer, except as follows: | | | | | | | | | | | | | | | | Signature | | | Chief Financial Officer | | ANDREA L. PLOSKONKA | Title | | NOTARY PU .IC OF NEW JERSEY
Com . \$ 2414176 | | | - Notary Public My Commission Expires 11/1/2021 | | | This report ** contains (check all applicable boxes): | | | (a) Facing Page. | | | (b) Statement of Financial Condition. | | | (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) 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 Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | (j) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of
consolidation. | | | (I) An Oath or Affirmation. | | | (m) A copy of the SIPC Supplemental Report. | | | | (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 240.17a-5(e)(3). | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Tel +1 212 773 3000 ey com #### Report of Independent Registered Public Accounting Firm To the Shareholder and the Board of Directors of Investec Securities (US) LLC #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Investec Securities (US) LLC, (the Company) as of March 31, 2020 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at March 31, 2020, 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 the Company'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 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2007. June 2, 2020 {5}------------------------------------------------ # Investec Securities (US) LLC # Statement of Financial Condition March 31, 2020 | Assets | | |----------------------------------------------------------|---------------------------| | Cash and cash equivalents | \$ 7,078,612 | | Due from Affiliates | 195,615 | | Other assets | 43.993 | | Total assets | \$ 7,318,220 | | Liabilities and member's equity | | | Liabilities:
Accrued expenses
Unearned revenue | S
128,012
3.750 | | Total liabilities | 131,762 | | Member's equity
Total liabilities and member's equity | 7,186,458
\$ 7,318,220 | | | | The accompanying notes are an integral part of the financial statements. {6}------------------------------------------------ ## Investec Securities (US) LLC ## Notes to Financial Statements March 31, 2020 ### 1. Organization and Nature of Business Investec Securities (US) LLC (the "Company") is a wholly owned subsidiary of Investec USA Holdings Corp. ("Holdings"), the ultimate parent of which is Investec plc, a London Stock Exchange listed company. The Company is a registered broker-dealer under the Securities Exchange Act of 1934 (the "SEA") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company distributes affiliate research and serves as an intermediary on behalf of overseas affiliates (the "Overseas Affiliates") in accordance with SEA Rule 15a-6. Under this rule, the Company intermediates foreign equity transactions, as well as it acts as a placement agent for foreign securities offerings in the United States; for all such transactions and offerings, the executing broker is one of the Overseas Affiliates. The Company operates in a single business segment, the institutional securities business. ### 2. Significant Accounting Policies #### Basis of Presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States, which require management to make judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. ### Cash and Cash Equivalents Cash and cash equivalents consists of cash and highly liquid investments with maturities of 90 days or less. The Company had no cash equivalents at March 31, 2020. ### Commitments and Contingencies The Company has not made any commitments, and it is not aware of any contingencies, that would require disclosure in the Notes to Financial Statements. ### Income Taxes The Company is a single member limited liability company and is a "disregarded entity" for tax purposes. Thus, the Company's assets, liabilities and items of income, deductions and tax credits are treated as those of its sole member, Holdings, which is responsible for including the Company in its tax reports. {7}------------------------------------------------ ### 2. Significant Accounting Policies (continued) The Company accounts for taxes in accordance with Accounting Standards Codification 740, Income Taxes ("ASC 740"). ASC 740 provides guidance on how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires that the Company determine whether a tax provision is more likely than not to be sustained upon examination, including resolution of any appeals or litigation processes, based upon the technical merits of the position. Once it is determined that a position meets this recognition criteria, the Company measures the position to determine the amount of benefit it may recognize in the financial statements. ### Accounting Developments ### Pending adoption ## ASU 2016-13 In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). ASU 2016-13 represents a significant change in the allowance for credit losses accounting model. Topic 326 replaced existing incurred loss impairment guidance and introduces a new credit loss model; Current Expected Credit Losses (CECL) model, requiring earlier recognition of credit losses when compared to the existing incurred-loss approach. The company adopted Topic 326 on its required effective date of April 1, 2020. The adoption did not have a material impact on the Company's opening retained earnings. ## Adopted ## ASU 2016-02 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which was mandatorily effective as of April 1, 2019. The standard substantially changes how lessees account for operating lease commitments, requiring a lease liability with a corresponding right-of-use asset to be recognized on the balance sheet, compared with the previous off-balance sheet treatment of such leases. The Company adopted the standard as of its mandatory effective date on April 1, 2019. The Company is not listed on lease agreements, hence the adoption of this standard did not have a material impact on the Company's financial statements. ## ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" to ASC 740, Income Taxes. This amendment requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company adopted the standard as of its mandatory effective date on April 1, 2019. The adoption of this standard did not have a material impact on the Company's financial statements. {8}------------------------------------------------ ## 3. Credit Risk The Company maintains its Cash and cash equivalents in bank accounts. Balances in such accounts, at times, may exceed federally insured limits. The Company's customers and counterparties are in the financial services industry. Changes in the industry's regulatory framework relevant to the Company, and to its business environment, could have a material effect on the Company and its operations. ## 4. Related-Party Transactions The Company shares office space, equipment and other related support with Holdings. Under an administrative services agreement (the "ASA") with Holdings, certain overhead and operating expenses, including employee salaries and related costs, insurance and other expenses are allocated to the Company based on formulae applied to these expenses. In addition, Holdings allocates taxes to the Company, as discussed in Notes 2 and 5, and is the Company's payment agent for essentially all of the Company's vendor invoices. Receivable or payable balances are settled between the Company and Holdings throughout the year on at least a quarterly basis. At March 31, 2020, the Company had a receivable, included in Due from Affiliates, from Holdings in the amount of \$124,833. Pursuant to service agreements, the Company charges certain Overseas Affiliates for services rendered, including operating as an intermediary broker-dealer for the Overseas Affiliates pursuant to SEC Rule 15a-6. Receivable or payable balances are settled between the Company and the Overseas Affiliates throughout the year on at least a quarterly basis. At March 31, 2020, the Overseas Affiliates owed the Company \$70,782 related to the items described above and was included in Due from Affiliates. The Overseas Affiliates settled the full amount of \$70,782 via two installments paid on April 16 and April 29, 2020. ## 5. Provision for Income Taxes As described in Note 2 above, Holdings allocates a provision for income and other taxes to the Company as if it were a separate taxpayer. The Company's effective income tax rate was 17%, and included the effect of a 1.7% increase from the U.S. statutory rate for state and local taxes credits and a .29% increase for other items. At March 31, 2020 the Company had no deferred tax assets or deferred tax liabilities. All taxes are deemed to be current and are periodically settled with Holdings. As of March 31, 2020, the Company determined that it has no material uncertain tax positions, and no interest or penalties as defined within ASC 740-10. Accordingly, management has concluded that no additional ASC 740-10 disclosures are required. Although Holdings is not currently under examination by federal or state income tax authorities, Holdings' returns for the tax years ended March 31, 2017, 2018 and 2019 are open to adjustment by {9}------------------------------------------------ ## 5. Provision for Income Taxes (continued) the relevant federal and state income tax authorities. The Company would recognize any future penalties and/or interest allocated to it by Holdings in the then-current period. ### 6. Regulatory Requirements The Company, a registered broker-dealer, is subject to the Net Capital Rule 15c3-1 under the SEA (the "Rule"), which requires the maintenance of minimum net capital. The Company utilizes the alternative method available under the Rule and is required to have net capital equal to the greater of \$250,000 or 2 percent of its customer-related receivables from the reserve calculation of Rule 15c3-3. Since the Company claims an exemption from Rule 15c3-3, its minimum net capital is \$250,000. At March 31, 2020, the Company had net capital of \$6,946,850, which was \$6,696,850 in excess of the required minimum net capital. Various regulations may limit advances, dividends, and capital withdrawals in order to maintain required minimum net capital or for other reasons. ### 7. Subsequent Events The Company has evaluated all subsequent events through June 2, 2020, the date the financial statements were available to be issued. The long-term impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our clients and employees all of which are uncertain and cannot be predicted. At this point, the COVID-19 does not have a material impact on our financial condition or results of operations. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.