# BIDS TRADING L.P. X-17A-5 (2024-02-22) — Broker-dealer annual report - Company: BIDS TRADING L.P. - Form: X-17A-5 - Filed: 2024-02-22 - Period: 2023-12-31 - Accession: 0001368727-24-000001 - CIK: 1368727 - File #: 8-67376 - Type: Broker-dealer - Material weakness: No - Auditor: KPMG LLP - Auditor location: Kansas City, MO - Contact: Casie Harris - Phone: 8167215734 - Signed by: Stephen Berte (President) Original filing: https://www.sec.gov/Archives/edgar/data/1368727/000136872724000001/BIDS_Public_SEC_2023.pdf --- {0}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: Expires: Estimated average burden hours per response: SEC FILE NUMBER ## ANNUAL REPORTS FORM X-17A-5 PART III | | OMB APPROVAL | |--------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------| | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 | OMB Number:
Expires:
Estimated average burden | | ANNUAL REPORTS | | | FORM X-17A-5 | | | PART III | | | 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 _____________________ AND ENDING ______________________ | | | MM/DD/YY | MM/DD/YY | | | | | A.
REGISTRANT IDENTIFICATION | | | NAME OF FIRM: _______________________________________________________________________ | | | NAME OF FIRM: _______________________________________________________________________ | | | | | |---------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------|--------------------------------------------|--| | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
Check here if respondent is also an OTC derivatives dealer | Security-based swap dealer | Major security-based swap participant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | _____________________________________________________________________________________ | | | | | | | (No. and Street) | | | | | _____________________________________________________________________________________ | | | | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | _____________________________________________________________________________________ | | | | | | (Name) | (Area Code – Telephone Number) | (Email Address) | | | | B. | ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | | | | | | _____________________________________________________________________________________ | (Name – if individual, state last, first, and middle name) | | | | | | | | | | | _____________________________________________________________________________________
(Address) | (City) | (State) | (Zip Code) | | | _____________________________________________________________________________________ | | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. 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 OMB control number. {1}------------------------------------------------ | Stephen Berte | | , swear (or affirm) that, to the best of my knowledge and belief, the | |-----------------------------------------------------------------------|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of BIDS Trading L.P.
12/31 | | as of
2 023 | | as that of a customer. | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | CADY M. STARK
Notary Public | Signature: | - - - - - - - - - - - - - - - - - - - - - - - - - - - {2}------------------------------------------------ ### BIDS Trading L.P. Financial Statement (With Report of Independent Registered Public Accounting Firm Thereon) As of December 31, 2023 {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) KPMG LLP Suite 1100 1000 Walnut Street Kansas City, MO 64106-2162 ### Report of Independent Registered Public Accounting Firm To the Partners and the ATS Oversight Committee BIDS Trading L.P.: #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of BIDS Trading L.P. (the Company) as of December 31, 2023, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2023, in conformity with U.S. generally accepted accounting principles. #### Basis for Opinion opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. ![](_page_3_Picture_9.jpeg) Kansas City, Missouri February 22, 2024 {4}------------------------------------------------ #### BIDS Trading L.P. ### Statement of Financial Condition December 31, 2023 | Assets | | | |-----------------------------------------|------------------|---------| | Cash | \$
8,010,465 | | | Receivables: | | | | Accounts receivable, net | 4,087,212 | | | Receivables from non-subscribers | | 792,521 | | Total receivables | 4,879,733 | | | Other assets | | 184,033 | | Total assets | \$
13,074,231 | | | Liabilities and Partners' Capital | | | | Liabilities: | | | | Accounts payable and accrued expenses | \$ | 569,414 | | Payables to affiliates | 4,748,046 | | | Total liabilities | 5,317,460 | | | Commitments and contingencies (note 7) | | | | Partners' Capital: | | | | General Partner | | 1 | | Limited Partner | 7,756,770 | | | Total partners' capital | 7,756,771 | | | Total liabilities and partners' capital | \$
13,074,231 | | See accompanying notes to financial statement. {5}------------------------------------------------ # BIDS Trading L.P. Notes to Financial Statements As of and for the Year Ended December 31, 2023 #### (1) Nature of Business BIDS Trading L.P. (the Company) was formed as a Delaware Limited Partnership on June 14, 2006. The Company is an agency broker-dealer registered with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Company is an indirect, wholly-owned subsidiary of Cboe Global Markets, Inc (the Parent). The Company operates a proprietary alternative trading system (the ATS), which is used by the Company to facilitate the execution of equity securities trades. The ATS facilitates trading among buy-side and sell-side entities seeking to complete large block orders and generates brokerage transaction fees for the Company for facilitating such transactions. The Parent is listed on the Cboe BZX Exchange. The Company does not claim an exemption from SEC Rule 15c3-3, in reliance on footnote 74 to SEC Release 34-70073 in that the Company limits its business activities exclusively to effecting securities transactions in Regulation National Market System (NMS) stocks on its ATS on behalf of its brokerdealer subscribers. The Company does not directly or indirectly receive, hold, or otherwise owe funds or securities for or to subscribers, did not carry accounts of or for subscribers, and did not carry proprietary accounts of broker-dealers throughout the most recent fiscal year. ### (2) Summary of Significant Accounting Policies #### (a) Principles of Accounting The financial statement is presented in conformity with generally accepted accounting principles in the United States (GAAP) as established by the Financial Accounting Standards Board (FASB). References to GAAP in these footnotes are to the FASB Accounting Standards Codification (ASC or Codification). #### (b) Use of Estimates The preparation of the financial statement in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosure of the amounts of contingent assets and liabilities at the date of the financial statement. Actual results could differ significantly from those estimates. #### (c) Cash The Company maintains its cash at various financial institutions and brokerage firms that, at times, may be in excess of the federal insurance limits. #### (d) Restricted Cash The Company maintains a cash balance deposited with its clearing broker, BofA Securities, Inc. (BofA), in accordance with the Clearing Agreement between the Company and BofA. #### (e) Receivables On a periodic basis, management evaluates the receivables from subscribers and records an allowance for expected credit losses in accordance with ASC 326, Financial Instruments-Credit Losses. {6}------------------------------------------------ # BIDS Trading L.P. Notes to Financial Statements As of and for the Year Ended December 31, 2023 Accounts receivable are presented net of allowance for credit losses on the statement of financial condition and the associated losses are presented in other expenses on the statement of operations. Account receivable primarily consists of transaction fees receivable. Based upon the assessment of historical information, credit risk, and collectability, a provision for uncollectible accounts of \$22,211 has been recorded. See Note 4 (Accounts Receivable) for more information. Receivables from non-subscribers primarily consists of the restricted cash balance deposited with its clearing broker, BofA. #### (f) Other Assets Other assets include prepaid expenses. #### (3) Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; fair value is determined through the use of models or other valuation methodologies. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement. Level 3: Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. The fair value of the financial instruments, including the accounts receivable, receivables from non-subscribers, and accounts payable and accrued expenses, approximates the carrying value due to their short-term nature. ### (4) Accounts Receivable The accounts receivable balance at December 31, 2023 was \$4,087,212. This primarily consists of transaction fees receivable. The expected credit losses of accounts receivable balances are regularly evaluated based on a combination of factors such as subscriber creditworthiness, past transaction history with the subscriber and current economic trends. Changes to expected credit losses during the period are recognized in earnings. The allowance for accounts receivable credit losses is calculated using an aging schedule. {7}------------------------------------------------ # BIDS Trading L.P. Notes to Financial Statements As of and for the Year Ended December 31, 2023 #### (5) Net Capital Requirements The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital. The requirement also provides that equity capital may not be withdrawn or cash dividends paid if certain minimum net capital requirements are not met. The Company computes its net capital requirements under the basic method provided for in SEC Rule 15c3-1, which, as of December 31, 2023, requires the Company to maintain net capital equal to the greater of 6-2/3% of aggregate indebtedness items, as defined, or \$100,000. At December 31, 2023, the Company had net capital of \$3,354,636, which was \$3,000,138 in excess of its required net capital of \$354,498. The ratio of aggregate indebtedness to net capital was 1.6 to 1. #### (6) Related Party Transactions The Company has entered into Administrative Services and Support Agreements with affiliates of the Parent. Pursuant to these agreements, certain affiliates of the Parent provide shared services to the Company such as accounting and payroll. Costs for services provided and other expenses, such as facility costs and technology costs, are allocated to the Company from the other affiliates in accordance with the Administrative Services and Support Agreements. The payable to affiliates for this agreement was \$4,748,046 as of December 31, 2023. The Company settles all activity with the other affiliates through the Parent annually or as needed. #### (7) Commitments and Contingencies The Company is subject to reviews and inspections by the SEC and FINRA. Additionally, from time to time the Company is also involved in various legal proceedings arising in the ordinary course of business. The Company does not believe that the outcome of any of these reviews, inspections, or other legal proceedings will have a material impact on the financial statement; however, litigation is subject to many uncertainties, and management does not expect the resolution of such matters to have a material impact on the financial position. The Company is exposed to counterparty credit risk in the case of failure to perform on the part of the clearing firm that is involved in processing equities transactions on the behalf. The Company uses BofA to clear transactions. BofA guarantees the trade until one day after the trade date, after which time the National Securities Clearing Corporation (NSCC) provides a guarantee. Thus, the Company is potentially exposed to counterparty credit risk on equities trades between the trade date and one day after the trade date in the event that BofA fails to perform. In the case of a failure to perform on the part of BofA the Company has obligations to the counterparties to satisfy the trades. The Company believes that any potential requirement for the Company to make payments under these obligations is remote and accordingly, has not recorded any liability in the financial statement for these obligations. #### (8) Subsequent Events The Company performed an evaluation of events that have occurred subsequent to December 31, 2023 through February 22, 2024, which is the date the financial statement was available to be issued. There have been no subsequent events that have occurred during such period that would require disclosure in the financial statement or would be required to be recognized in the financial statement as of December 31, 2023. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.