# CARL MARKS SECURITIES LLC X-17A-5 (2020-02-26) — Broker-dealer annual report - Company: CARL MARKS SECURITIES LLC - Form: X-17A-5 - Filed: 2020-02-26 - Period: 2019-12-31 - Accession: 0001399878-20-000004 - CIK: 1399878 - File #: 8-67642 - Material weakness: No - Auditor: Eisner Amper LLC - Auditor location: New York, NY - Contact: Robert Speer - Phone: 212-909-8432 - Signed by: Robert Speer (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1399878/000139987820000004/2019auditpublic1.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,** D.C. **20549** 0MB APPROVAL 0MB Number: 3235--01 23 Expires: August 31, 2020 Estimated **average** burden hours per response .. . ... 12.00 SEC FILE NUMBER 8-67642 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **FACING PACE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | REPORT FOR THE PERIOD BEGINNING 01/01/2019 | AND ENDING 12/31/2019 | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|-----------------------|---------------------------------|--| | | MM/DD/VY | | MM/DD/VY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME oF BROKER-DEALER: Carl Marks Securities LLC
ADDRESS OF PRINC'IPAL PLACC OF BUSINESS: (Do not use P.O. Box No.)
900 Third Avenue, 33rd FL | | | OFFICIAL USE ONLY | | | | | | FIRM 1.0. NO. | | | | (No a.nd Street) | | | | | New '7t:lJtk | NY | | 10022 | | | (Cit)) | (State) | | | | | | B. ACCOUNTANT IDENTIFICATION | | (Area Code
Telephone Number) | | | INDEPEND .NT P BLIC A(TOUNTANT whose opinion is contained in this Report•
Eisner Amper LLC | | | | | | | (Name - If ind,wduol. llole last. first. middle nom~) | | | | | 750 Third Avenue
(Address) | New York | NY
(State) | 10017
(Z1p Code) | | *•Claims for exemption from the requirement that the annual reporl be covered by the opinion of an independent public accountant* mus/ *be supported by a stateme/11 of facts and circ11ms101,ces relied on as 1he basis/or lhe exemplion. See Section 24()\_ 17a-5(e}(2)* > Potential persons who are to respond to the collectlon of Information contained In this form are not required to respond unless the form displays a currently valid 0MB control number. SEC 141 0 (11-05) {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | __________________
J. Robert Speer, CFO | | , swear (or affirm) that, to the best of | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|--| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
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Carl Marks Securities LLC | | | | | -
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of December 31 | | -
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. are true and correct. I further swear (or affirm) that | | | classi tied 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 | | | | l | ~
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c:_~ C> | | | | | Title | | | port•• contains (check all applicable bo:-:es):
) Facing Page. | | JAMES F. HICKEY
Notary Publte. State of New York
Registrotion #01Hl6340819
Quaiif1ed In Queens Co4.n!Y .
25,~
Commission Expires April | | | (b) Statement of Financial Condition.
of Comprehensive Income (as defined in §2 IO. 1-02 of Regulation S-X). | | (c) Statement of Income (Loss) or. if there is other comprehensive income in Lhe period(s) presented, a Statement | | | ✓ (d) Statement of Changes in Financial Condition.
(c) 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 l 5c3-3. | | | | | (i) Information Relating lo the Pos~es~ion or Control Requirements Under Rule 15c3-3. | | D (j) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule l 5c3-I and the | | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | | | | | consolidation. | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | | § (I) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report. | | | | | | | ( n) A report describing any material inadequacies found to ex,ist or found to have existed since the date of the previous audit. | | | l&J (o) Exemption Report | | | | •• *For co11di1ions of confiden1ial treatment of certain portions of this filing, see section 240.* / *la-J (e) (3)* {2}------------------------------------------------ #### **FINANCIAL** STATEMENTS DECEMBER 31, 2019 (with supplementary information) # CONFIDENTIAL {3}------------------------------------------------ ## **Contents** | Report of independent registered public accounting firm | | |----------------------------------------------------------------------------------------|---| | Financial Statements | | | Statement of financial condition | 2 | | Statement of operations | 3 | | Statement of changes in member's equity | 4 | | Statement of cash flows | 5 | | Notes to financial statements | 6 | | Supplementary Information | | | Computation of net capital under Rule 15c3-1 of the Securities and Exchange Commission | 9 | {4}------------------------------------------------ # **EISNERAMPER** ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** The Member of Carl Marks Securities LLC ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Carl Marks Securities LLC (the "Company") a wholly owned subsidiary of Carl Marks Advisory Group LLC. as of December 31, 2019, and the related statements of operations, changes in member's equity, and cash flows for the year then ended and 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 Stales of America. ## **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is lo 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 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 performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a lest basis, evidence regarding the amounts and disclosures in the financial stalements. 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. ## **Report on Supplemental Information** The information contained on page 9 (the "supplemental information") has 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 determining 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 17 C.F .R. §240.1 ?a-5. In our opinion, the information contained on page 9 is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since 2008. EISNERAMPER LLP New York, New York February 20, 2020 {5}------------------------------------------------ ## **Statement of Financial Condition December 31, 2019** ## **ASSETS** | Cash
Other assets | \$
246,687
33,560 | |-----------------------------------------------------------------------------------------------|-------------------------| | Total assets | \$ 280.247 | | LIABILITIES AND MEMBER'S EQUITY
Deferred revenue
Accrued expenses and other liabilities | \$ 100,000
51,609 | | Total liabilities | 151,609 | | Member's equity | 128,638 | | Total liabilities and member's equity | \$ 280,247 | {6}------------------------------------------------ #### **Statement of Operations Year Ended December 31, 2019** | Revenue: | | |-------------------------------------------|-------------| | Advisory fees | \$1,595,893 | | Total revenue | 1,595.893 | | Expenses: | | | General and administrative costs (Note C) | 446,084 | | Marketing and travel | 88,409 | | Professional fees | 98,836 | | Referral fee (Note F) | 228,179 | | Other expenses | 96,244 | | Total expenses | 957,752 | | Net income | \$ 638 141 | {7}------------------------------------------------ | Statement of Changes in Member's Equity
Year Ended December 31, 2019 | | | |-------------------------------------------------------------------------|-----------|--| | Balance - beginning of year | \$315,497 | | | Net income | 638,141 | | | Contribution from member | 50,000 | | | Distributions to member | (875,000) | | | Balance - end of year | \$128.638 | | {8}------------------------------------------------ #### **Statement of Cash Flows Year Ended December 31, 2019** | Cash flows from operating activities: | | |-----------------------------------------------------------------------------------|-----------| | Net income | \$638,141 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | Changes in operating assets and liabilities: | | | Decrease in advisory fees receivable | 45,106 | | Decrease in other assets | 5,367 | | Decrease in deferred revenue | (122,500) | | Decrease in accrued expenses and other liabilities | (9,799) | | Net cash provided by operating activities | 556,315 | | Cash flow from financing activities: | | | Distributions paid to member | (875,000) | | Contribution from member | 50,000 | | Net cash used in financing activities | (825,000) | | Net decrease in cash | (268,685) | | Cash at the beginning of year | 515,372 | | | | | Cash at the end of year | s 246 68Z | | | | {9}------------------------------------------------ #### **Notes to Financial Statements December 31, 2019** ## **NOTE A** - **ORGANIZATION AND NATURE OF BUSINESS** Carl Marks Securities LLC (the "Company"), a wholly owned subsidiary of Carl Marks Advisory Group LLC (the "Parent") and a New York limited liability company, was formed on May 26, 2006. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority. The Company commenced its broker-dealer operations on October 12, 2007 and shall continue unless terminated in accordance with its operating agreement. The Company is engaged in providing advisory services involving private placement and mergers and acquisitions for its clients. It is intended that all offerings will be exempt from registration under the provisions of either Regulation D or Rule 144A. The Company operates pursuant to SEC Rule 15c3- 3(k)(2)(i) (the Customer Protection Rule) and does not hold customer funds or safe-keep customer securities or engage in the underwriting of securities. ## **NOTE 8** · **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ## **[1) Cash:** The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. ## **[2] Advisory Fees:** The Company provides advisory services on mergers and acquisitions. Advisory fees represent 100% of revenue earned by the Company. Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgement is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as deferred revenue. As of December 31, 2019, the Company has deferred \$100,000 in revenue related to contracts that have not been completely fulfilled. 100% of total revenue for the year ended December 31, 2019 was earned from five clients. ## **[3] Income taxes:** As a single member LLC, the Company is considered a disregarded entity for federal, state and local income tax purposes and is not required to pay income taxes on income or gains. As such, its income and losses are reported on the Parent's tax return. The Company has not recognized in these financial statements any interest or penalties related to income taxes and has no unrecognized tax benefits. ## **[4] Use of estimates:** Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from these estimates. {10}------------------------------------------------ #### **Notes to Financial Statements December 31, 2019** ## **[5] Fair value:** The Company carries its investment at fair value. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). A fair value hierarchy provides for prioritizing inputs to valuation techniques used to measure fair value into three levels: Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available; Level 3 - unobservable inputs reflect the assumptions that the Company or Parent develop based on available information about what market participants would use in valuing the asset or liability. The company's cash is considered a level 1 asset. Certain other financial instruments are carried at amounts that approximate fair value due to the short-term nature and negligible credit risk. These instruments include advisory fees receivable, other assets, accrued expenses, and other liabilities and are classified as level 2. ## **NOTE C** - **RELATED PARTY TRANSACTIONS** The Company entered into a service agreement with the Parent in which the Company agreed to reimburse the Parent approximately \$7,102 per month for certain general and administrative costs incurred on the Company's behalf. In addition, direct costs, which consist of employees' compensation and benefits, are allocated to the Company based upon actual time spent by the Parent's personnel on the Company's business. For the period January 1, 2019 through December 31, 2019, the Company incurred the following costs: | Direct costs
General and administrative costs | \$ 360,860
85,224 | |--------------------------------------------------|----------------------| | Total | \$ 446,084 | At December 31, 2019, \$38,110 is included in accrued expenses and other liabilities for amounts owed to the Parent for direct costs and overhead reimbursements. The Company's financial statements may not necessarily be indicative of the Company's financial condition and results of operations had the Company operated as an unaffiliated entity of the Parent. {11}------------------------------------------------ #### **Notes to Financial Statements December 31, 2019** ## **NOTE D - INVESTMENT** Pursuant to the advisory services agreement with Lebenthal Holdings LLC ("Lebenthal"), on December 31 , 2013 the Company purchased 1,500 common units in Lebenthal at a cost of \$12,204. The Company's investment is classified as a Level 3 asset and is valued at \$0. ## **NOTE E - NET CAPITAL AND RESERVE REQUIREMENTS** The Company is subject to the Uniform Net Capital Rule under the Securities Exchange Act of 1934 (the "Rule"). The Rule requires the maintenance of minimum net capital, as defined, of 6 2/3% of aggregate indebtedness, or \$5,000, whichever is greater, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2019, the Company's net capital of \$95,078 exceeded required minimum net capital of \$10,107 by \$84,971 and the ratio of aggregate indebtedness to net capital was 1.59 to 1. The Company claims exemption from the reserve requirements under Rule 15c3-3 pursuant to paragraph **(k)(2)(i).** ## **NOTE F - CLIENT REFERRAL AGREEMENT** The Company has a client referral agreement with Morgan Stanley Smith Barney LLC ("MSSB"). The Company is required to pay MSSB 20% of net cash placement fees, net advisory success, transactions, closing, retainer, or other cash or non-cash fees received by the Company in connection with any completed transaction for a referred party from MSSB. In 2019 there were five engagements pursuant to this client referral agreement of which one of these engagements closed in 2019. The Company incurred referral fee expense of \$228,179 in 2019. ## **NOTE G - SUBSEQUENT EVENT** Subsequent to December 31, 2019 and through February 20, 2020, there was a capital contribution of \$100,000 which is not reflected in the statement of financial condition. {12}------------------------------------------------ ## **SUPPLEMENTARY INFORMATION** CONFIDENTIAL {13}------------------------------------------------ ## CARL **MARKS** SECURITIES LLC Confidential ## **Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission Year Ended December 31, 2019** | Net capital:
Member's equity | \$128,638 | |-----------------------------------------------------------------------------------------------------------------------------------|---------------------| | Less: Non-allowable assets:
Other assets | 33.560 | | Net Capital | 95,078 | | Minimum net capital required:
The greater of \$5,000 or 6-2/3% of
aggregate indebtedness of \$151,609
Excess net capital | 10.107
\$ 84 971 | | Aggregate indebtedness: | | | Accrued expenses and other liabilities | \$ 151 609 | | Ratio of aggregate indebtedness to net capital | 1.59 to 1 | There are no material differences between the above computation of net capital and the computation included the Company's corresponding Form X-17A-5, Part II Filing as of December 31, 2019 {14}------------------------------------------------ # **EISNERAMP R** ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** The Member of Carl Marks Securities LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Carl Marks Securities LLC (the "Company'') identified the following provisions of 17 C.F R. §15c3-3(k) under which the Company claimed an exemption from 17 C.F .R. §240.15c3-3: (2 )(i) (the "exemption provisions") and (2) the Company stated that it met the identified exemption provisions throughout the most recent fiscal year without exception. The Company'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 the Company's compliance with the exemption provisions. **A** review is substantially less in scope than an examination, the objective of which is the expression or 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 rnanagement's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934. EISNERAMPER LLP New York, New York February 20, 2020 {15}------------------------------------------------ ## CARL **MARKS** SECURITIES LLC EXEMPTION REPORT Carl Marks Securities LLC (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 to be made by certain brokers and dealers~). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claimed an exemption from 17 C.F.R. §240.15c3-3 under the following provisions of 17 C. F .R. §240.15c3-3(k)(2)(i). - (2) The Company met the identified exemption provisions in 17 C.F.R §240.15c3-3(k) throughout the most recent fiscal year without exception. ## CARL **MARKS** SECURITIES LLC I, Robert A. Speer, affirm that to my best knowledge and belief, this Exemption Report is true and correct. **By:· ~**cQ\_~ Rohen A. Speer CFO/FINOP February 20, 2020 {16}------------------------------------------------ # **EISNER PER** ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED UPON PROCEDURES** The Member of Carl Marks Securities LLC We Ii ave performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation ("SIPC") Series 600 Rules, which are enumerated below, and were agreed to by Carl Marks Securities, LLC (the "Company") and the SIPC, solely to assist you and the SIPC in evaluating the Company's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2019. Management of the Company is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreedupon procedures engagement was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United Stales) and in accordance w1th attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with a copy of the cancelled check, noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31, 2019, with the Total Revenue amounts reported in Form SIPC-7 for the year ended December 31, 2019, noting no differences: - 3. Compared any adjuslments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; and - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments. noting no differences. We were not engaged to, and did not conduct an exammation or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2019. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other mailers might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Company and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. EISNERAMPER LLP New York, New York February 20, 2020 {17}------------------------------------------------ | SIPC-7
(36-REV 12118) | SIPC-7
(36 REV 12,18) | | | | |---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | For the r,scal year ended 12/31/2019 | | | | | | ! Read carefully the instructions in your Work ng Copy before completing !his Form I
TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS | | | | I
67&42
L | t. Name of Member, address, Des gnaled Examining Authority, 1934 Acl reg sIrat1on no. and month ,n which ftscal year ends for
purposes of the aud1I requirement of SEC Rule 17a-5.
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M-453, -·-
FOR MDC 100
FINRA
DEC
CARL MARl900 3RD Al/f. FL 33
NEW YORK, NY 10022 775 | 7 | indicate on the form hied
contact respecting lhIs form.
_J | Note. If any of the information shown on the
ma1lmg label requires correction, please e mail
any corrections to form@s1pc .org and so
Name and lelephone number of person to | | 2. A | General Assessment (item 2e from page 2) | | | | | 7\\\,q\ \C\ | B. less payment made with SIPC 6 hied (exclude interest) | | | | | Date Paid
C. Less pr or overpayment applied | | | | | | | D. Assessment balance due or (overpayment) | | | | | | E. lnteresl computed on late payment (see 1nsIruct,on E) for__ days al 20°0 per annum | | | | | G. PAYMENT: | F, Total assessment balance and interest due (or overpayment carried forward)
✓ the box
Check malled to P.O. Box~
Funds Wired CJ | ACH D \$ __________ | _ | | | H Overpaymenl earned forward | Total (must be same as F above) | \$( 0 | | | | | 3. Subs1d1anes (S) and predecessors (P) included rn this form (give name and 1934 Act registralion number): | | | | | and complete.
lhe~
Daled | The SIPC member subm1tling this form and the
person by whom ,1 Is executed represent thereby
that all lnlormaI1on contained herein s true, correcl
, ?0 2.0
day ol J O,Y\U07':j. | | | | | | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | (T,llt) | | | ffi Oate
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Poslmarked
31: | Received | Reviewed | | | | > Calculaltons __
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_ | | 0 | | | | | **1** **en** D1spos11ion of exceplions: {18}------------------------------------------------ # DETERMINATION OF "SIPC NET OPE1RATING REVENUES" AND GENERAL ASSESSMENT Item **No.** 2a. Total revenue, FOCUS Line 12 Parl IA L ne 9. Code 4030) 21> Addrt1ons· (1J Total ,evenues trom the st cu1t11es bu,mess of subs,d,aries 1excepl fore gn subs d1ar1es) anc predecessr.rs not nc ced above. (2) Net ,oss lrom princ pal Ira sact1ons 1n socuril1es 1n lrad,ng accounts. (3) Net loss lrom prrnc pa t•ansact ons in commodities 1n t1ading accounts **(4)** Interest and div dend expe·se deducted n determining 11em 2a, (5) Nel loss lrom management ot 01 partrc pation in the underwriting or c11s11 but1on of secu1it1es. (6} Ex,::enses other than ao~erf sing, punting registration lees and ,egal fees deducted 1n dete,mrntng net prolil lrom management ol or part1c1pat on 1n underwnti1og or d stribut,on ot secu11t1es 171 Net loss lrcm secur,hes n nvestment accounts Total add1t1ons 2c. Oeduct1ons: (1) Revenues lrom the d1slr1but on ot shares ol a registered open end investment company 01 unit ,•vestment trust lrom the sale ol variab e annuities. horn the bus,ness of insurance, from investment adv1s01y serv ces rende,ed lo reg stereo ir.vestment companies or insurance company separate accounts and lrom transactrons in security lutures products r21 Revenues from commodrty transactions **(3)** Comm,ss,ons, rroor brokerage ard clearance paid to other SIPC members in connection with secur,ltes 1,ansact ons. **(4** I Reimbursements for postage .n connection w th proxy sol1c11at,on !5) Net garn trom secu hes rn nvestment accounts. :6) 100~0 ot commissions and mark,ps earned lrom transact ons 10 (1) certrhcates ol deposit and I,,; Treasury b lls, bankers acceptances or commerc al paper that mature nrne months or less from issuance date (7) Direct expenses ol pnnt,ng adve•tising and legal lees ncurred ·n cooneClion with other revenue related ro the secur ties bus ness .revenue deltned by Section 16(9)(L) ol the Act). **(8)** Other revenue net related e,ther d11eclly or rndnect y to the secur1t1 es business. 1 See 1nstructron C j: 1Deduct1ons n excess of \$1 OD 000 1equ re documeotat1on) 19) (11 Tota ,nterest and d1v,derld expense (FOCUS Line 22 PART IIA lrne 13, Code 4075 plus 1,ne 2bl4r above) but not n excess of Iota 1nteres1 and d v1dend Income \$ \_\_\_\_\_\_\_\_\_\_ \_ (1 } 40". of margtn mterest earned on customers secu11ties accounts **{40~.** of FOCUS **i; e 5** Code 3960) \$ \_\_\_\_\_\_\_\_\_\_ \_ Enter the greater of line (ii or (11) Tota deductions 2d. SIPC Net Operallng Revenues 2e General Assessment@ .0015 Amounts for the fiscal per od beginning **1/1/2019** and end ng **12/31/2019 Eliminate cents** \$ I I 3\pl , 7 I w \$ s1 ,osa (to page t. **110e 2.A.)** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.