# KERSHNER SECURITIES, LLC X-17A-5 (2023-02-10) — Broker-dealer annual report
- Company: KERSHNER SECURITIES, LLC
- Form: X-17A-5
- Filed: 2023-02-10
- Period: 2022-12-31
- Accession: 0001438071-23-000002
- CIK: 1438071
- File #: 8-67922
- Type: Broker-dealer
- Material weakness: No
- Auditor: Bauer & Company, LLC
- Auditor location: Austin, TX
- Contact: Jon Sanderson
- Phone: 5124398140
- Email: isanderson@kershnertrading.com
- Website: kershnertrading.com
- Signed by: Jon B. Sanderson (Chief Financial Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1438071/000143807123000002/attachment.pdf
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| UNITED STATES |
|------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, D.C. 20549 |
| OMB Number: 3233-0123 | |
|--------------------------|--|
| Expires: Oct. 31, 2023 | |
| Estimated average burden | |
| nours per response: 12 | |
| SEC FILE NUMBER | |
| 2 67 000 | |
OMB APPROVAL
### 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 | 01/01/22 | AND ENDING | 12/31/22 |
|---------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|------------|--------------------------------------------|
| | MM/DD/YY | | MM/DD/YY |
| | A. REGISTRANT IDENTIFICATION | | |
| NAME OF FIRM: Kershner Securities, LLC | | | |
| 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.) | | | |
| | 1825-B Kramer Lane, Suite 200 | | |
| | (No. and Street) | | |
| Austin | Texas | | 78758 |
| (City) | (State) | | (Zip Code) |
| PERSON TO CONTACT WITH REGARD TO THIS FILING | | | |
| Jon B. Sanderson | 512.439.8140 | | isanderson@kershnertrading.com |
| (Name) | (Area Code - Telephone Number) | | (Email Address) |
| | B. ACCOUNTANT IDENTIFICATION | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing * | | | |
| | Bauer & Company, LLC | | |
| | (Name - if individual, state last, first, and middle name) | | |
| P.O. Box 27887 | Austin | lexas | 78755 |
| (Address) | (City) | (State) | (Zip Code) |
| 11/20/14 | | | 6072 |
| (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 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.
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#### OATH OR AFFIRMATION
| Jon B. Sanderson | swear (or affirm) that, to the best of my knowledge and belief, the | |
|---------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|-------|
| financial report pertaining to the firm of Kershner Securities, LLC | | as of |
| December 31 | 2 022 , is true and correct. I further swear (or affirm) that neither the company nor any | |
| | partner, officer, director, or equivalent person, as the case may be, has any proprietary in any account classified solely | |
| as that of a customer. | | |
| | Signature; | |
| | | |
| | Title:
Chief Financial Officer | |
Notary Public
#### This filing\*\* contains (check all applicable boxes):
- 2 (a) Statement of financial condition.
- □ (b) Notes to consolidated statement of financial condition.
- 2 (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 cash flows.
- 2 (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- [ (f) Statement of changes in liabilities subordinated to claims of creditors.
- 2 (g) Notes to consolidated financial statements.
- (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- [ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- 2 (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- | | | | Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
- [ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.
- 2 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
- [ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
- 2 (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist.
- □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- 2 (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.18a-7, as applicable.
- [r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 2 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- [ (t) Independent public accountant's report based on an examination of the statement of financial condition.
- Z (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 2 (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable.
- □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
- □ (z) Other:
- \*\* To request confidential treatment of chis filing, see 17 CFR 240.170-5(e)/3) or 17 CFR 240.180-7(d)/2), as applicable.
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## Kershner Securities, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
Financial Statements and Supplemental Schedules With Report of Independent Registered Public Accounting Firm
December 31, 2022
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
#### Index to Financial Statements and Supplemental Schedules December 31, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1 FINANCIAL STATEMENTS Statement of Financial Condition 2 Statement of Operations 3 Statement of Changes in Members Equity 4 Statement of Cash Flows 5 Notes to Financial Statements 6 SUPPLEMENTAL SCHEDULES I. Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-1 11 II. Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3 12 III. Information Relating to the Possession or Control Requirements Pursuant to Rule 15c3-3 12 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS REVIEW REPORT REGARDING THE EXEMPTIVE PROVISIONS OF RULE 15c3-3 13 Kershner Securities, LLC Exemption Report 14 INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES RELATED TO AN ENTITYS SIPC ASSESSMENT RECONCILIATION 15 Schedule of Assessment Payments on Form SIPC-7 as required under Rule 17a-5(e)(4)(i) of the Securities and Exchange Commission 17
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#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Those Charged with Governance and Member of Kershner Securities, LLC
#### Opinion on the Financial Statements
We have audited the accompanying statement of financial condition of Kershner Securities, LLC a Wholly Owned Subsidiary of Kershner Trading Group, LLC as of December 31, 2022, the related statements of operations, changes in members' equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Kershner Securities, LLC as of December 31, 2022, 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.
#### Basis for Opinion
These financial statements are the responsibility of Kershner Securities, LLC's management. Our responsibility is to express an opinion on Kershner Securities, LLC'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 Kershner Securities, LLC 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 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. Auditor s Report on Supplemental Information '
The Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-1 of the Securities and Exchange Commission (Schedule I), the Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule II) and the Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule III) (the "Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of Kershner Securities, LLC's financial statements. The supplemental information is the responsibility of Kershner Securities, LLC'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. §240.17a-5. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the financial statements as a whole.
BAUER & COMPANY, LLC
We have served as Kershner Securities, LLC's auditor since 2018.
Austin, Texas February 8, 2023
Bauer & Company, LLC P.O. Box 27887 Austin, TX 78755 Tel 512.731.3518 / www.bauerandcompany.com
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
#### Assets
| KERSHNER SECURITIES, LLC
(A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
Statement of Financial Condition
December 31, 2022 | |
|-------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|
| Assets | |
| Cash and cash equivalents
Receivable from clearing organization
Receivable from related entities | \$
251,824
1,499,047
734,053 |
| Total assets | \$
2,484,924 |
| Liabilities and member's equity | |
| Accounts payable
Other accrued expenses
Payable to related entities
Total liabilities | \$
113,442
174,432
23,902
311,776 |
| Member's equity | 2,173,148 |
| Total liabilities and member's equity | \$
2,484,924 |
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### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
| (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) | |
|------------------------------------------------------------|------------|
| | |
| \$ | 20,783,258 |
| | 20,783,258 |
| | |
| | 292,915 |
| | 10,373,251 |
| | 24,926 |
| | 28,591 |
| | 63,391 |
| | 5,995 |
| | 72,998 |
| | 10,862,067 |
| | 9,921,191 |
| | 67,496 |
| \$ | 9,853,695 |
| | |
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Statement of Changes in Member's Equity December 31, 2022
Balance at December 31, 2021 \$ 1,719,453 Capital distributions (9,400,000) Net income 9,853,695 Balance at December 31, 2022 \$ 2,173,148
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
| KERSHNER SECURITIES, LLC | |
|---------------------------------------------------------------------------------------|-------------|
| (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) | |
| Statement of Cash Flows
December 31, 2022 | |
| | |
| Cash flows from operating activities: | |
| Net income
\$ | 9,853,695 |
| Adjustments to reconcile net income to net cash provided by operating | |
| activities: | |
| Changes in operating assets and liabilities:
Receivable from clearing organization | (264,402) |
| Receivable from related entities | (61,023) |
| Accounts payable | 9,713 |
| Other accrued expenses | (7,988) |
| Payable to related entities | (8,677) |
| Net cash provided by operating activities | 9,521,318 |
| Cash flows from financing activities: | |
| Capital distributions | (9,400,000) |
| Net cash used in financing activities | (9,400,000) |
| Net change in cash and cash equivalents | 121,318 |
| Cash and cash equivalents at beginning of year | 130,506 |
| Cash and cash equivalents at end of year
\$ | 251,824 |
| Supplemental disclosures of cash flow information: | |
| Cash paid during the year for: | |
| Interest
\$ | - |
| Franchise taxes
\$ | 68,775 |
| | |
| | |
| | |
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Notes to Financial Statements December 31, 2022
#### Note 1 - Nature of Business
Kershner Securities, LLC (the Company), was organized as a Delaware Limited Liability Company on February 22, 2008. The Company is a broker-dealer in securities registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Companys sole member is Kershner Trading Group, LLC, (KTG, the Parent, or the Member).
The Company operates under the provisions of Paragraph k(2)(ii) of Rule 15c3-3 of the SEC, and accordingly is exempt from the remaining provisions of that Rule. The Company does not hold customer funds or securities, but as an introducing broker or dealer, will clear all transactions on behalf of customers on a fully disclosed basis through a clearing broker-dealer, Goldman Sachs Execution & Clearing, L.P. The clearing broker-dealer carries all of the accounts of the customers and maintains and preserves all related books and records as are customarily kept by a clearing broker-dealer. Under these exempt provisions, the Computation for Determination of Reserve Requirements and Information Relating to the Possession and Control Requirements are not required.
Substantially all of the Companys revenues are derived from commission income from a related entity (see Note 5).
#### Note 2 - Significant Accounting Policies
#### Basis of Accounting
These financial statements are presented on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America. Revenues are recognized in the period earned and expenses when incurred.
#### Use of Estimates
The 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 the reported amounts 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 those estimates.
The Companys critical accounting estimates affecting the financial statements include the allocation of income and expenses with affiliated entities.
#### Cash Equivalents
For purposes of reporting cash flows, the Company has defined cash equivalents as highly liquid investments with original maturities of less than ninety days that are not held for sale in the ordinary course of business.
#### Receivable from Clearing Organization
The Company clears all transactions on behalf of customers on a fully disclosed basis through its clearing broker-dealer, Goldman Sachs Execution & Clearing, L.P. (Goldman.) At December 31, 2022, the amount receivable from Goldman totaled \$1,499,047 consisting of fees and commissions earned and collected on securities transactions for the Company.
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Notes to Financial Statements
December 31, 2022
#### Revenue
Revenue includes related party brokerage commissions and related party fees. Purchases and sales of securities, and commission revenue and expense, are recorded on a trade date basis. Dividends are recorded on the ex-dividend date.
#### Related Party Brokerage Commissions
The Company serves as an introducing broker-dealer and will charge a commission for the purchases and sales transactions of its related party customer. Related party commissions and clearing expenses are recorded on the trade date (the date that the trade order is filled with a counterparty and confirmed with the related party customer.) The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument and/or purchaser are identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer.
#### Financial Instruments and Credit Risk
Financial instruments that potentially subject the Company to credit risk include cash and cash equivalents and receivables from the clearing organization. Receivables from the clearing organization represent cash deposited and commissions receivable from the organization, \$500,000 of which are insured from theft by the Securities Investor Protection Corporation.
#### Advertising Costs
Advertising costs are expensed as incurred. There were no advertising expenses for the year ended December 31, 2022.
#### Income Taxes
The Company will be taxed at the member level rather than at the corporate level for federal income tax purposes. The Company is liable for a pro rata allocation of the Texas margin tax, which is filed with the Parent. The Company has recorded \$67,496 of Texas margin tax expense for the year ended December 31, 2022.
In the ordinary course of business, there are many transactions for which the ultimate tax outcome is uncertain. The Company regularly assesses uncertain tax positions in each of the tax jurisdictions in which it has operations and accounts for the related financial statement implications. Unrecognized tax benefits are reported using the two-step approach under which tax effects of a positions are recognized only if it is more-likelythan-not to be sustained and the amount of the tax benefit recognized is equal to the largest tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement of the tax position. Determining the appropriate level of unrecognized tax benefits requires the Company to exercise judgment regarding the uncertain application of tax law. The amount of unrecognized tax benefits is adjusted when information becomes available or when an event occurs indicating a change is appropriate. The company includes interest and penalties related to its uncertain tax positions as part of income tax expense, if any. There are no uncertain tax positions as of December 31, 2022.
#### Fair Value of Financial Instruments
The carrying amount of cash and cash equivalents, receivable from clearing organization, accounts payable and accrued expenses approximated fair market value at December 31, 2022 due to their relatively short maturities and prevailing market terms.
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Notes to Financial Statements December 31, 2022
#### Recent Accounting Pronouncements
Accounting standards that have been issued or proposed by the Financial Accounting Standards Board (FASB) or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows.
#### Note 3 - Members Equity
The Company has one class of membership interest and the sole member of the Company is Kershner Trading Group, LLC.
The Member makes capital contributions to the Company as it may determine from time to time. No interest accrues on such contributions and the Member does not have the right to withdraw, or be repaid on its contributions, except as provided in the LLC Agreement.
Capital account withdrawals and distributions are made in accordance with the LLC Agreement. Capital distributions to its Member can be made under a capital distribution policy approved by the Member.
#### Note 4 - Net Capital Requirements
Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate daily. At December 31, 2022, the Company had net capital of \$1,426,095 and net capital requirements of \$100,000. The Company's ratio of aggregate indebtedness to net capital was 0.22 to 1. The Securities and Exchange Commission permits a ratio of no greater than 15 to 1.
The Company is exempt from the customer protection provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, in that the Company's activities are limited to those set forth in the conditions for exemption appearing in paragraphs (k)(2)(ii) of the Rule.
#### Note 5 - Related Party Transactions
The Company has an Expense Sharing Agreement (Sharing Agreement) with its Parent. The Sharing Agreement provides for the pro rata sharing of office space, office equipment and the expenses of certain administrative and other personnel and ancillary services. The parties have agreed to share the fees and costs based on headcount. The Parent invoices the Company for those expenses monthly. The Company incurred \$225,912 of expense under this agreement for the year ended December 31, 2022, of which \$19,856 was payable at December 31, 2022.
The Company entered into a Technology Services Agreement (Technology Agreement) to outsource all of its technology needs to Kershner Technology and Innovation, LLC, which is wholly owned by the Parent. The Technology Agreement provides for a monthly fixed fee of \$1,000. Additionally, the Technology Agreement calls for technology support and a pro rata sharing of administrative and other personnel based on a predetermined percentage of personnel cost. The Company incurred \$48,552 of expense under this agreement for the year ended December 31, 2022, of which \$4,046 was payable at December 31, 2022.
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Notes to Financial Statements
December 31, 2022
The Company executed agreements to provide electronic trading services to Kershner Trading Americas, LLC and Kershner Trading Americas II, LLC (collectively Americas), both are wholly owned by the Parent. The trading service agreements provide Americas with the right to use the software, equipment, telecommunications and connectivity resources of the Company to enter and route orders and execute securities and futures transactions. In exchange for the provision of trading services (pursuant to the agreements) the Company charges monthly fees on a per share basis which are invoiced at month end. The Company earned \$7,286,558 under these agreements for the year ended December 31, 2022, of which \$734,053 was receivable at December 31, 2022. The Company anticipates collection of the receivable and has not recorded an allowance. Additionally, the Company earned \$13,496,700 in commission income directly through transactions processed at the clearing broker during 2022 resulting from trading activity of Americas. The balance of the payment to be received from Americas is charged via the invoicing process outlined previously. The Company also paid Americas \$77,964 for personnel and related costs for supporting the trading services activities.
Related party other income is discussed above in Note 2 Significant Accounting Policies.
#### Note 6 - Commitment and Contingencies
Included in the Companys clearing agreement with its clearing broker-dealer is an indemnification clause. This clause relates to instances where the Companys customers fail to settle security transactions. In the event this occurs, the Company will indemnify the clearing broker-dealer to the extent of the net loss on any unsettled trades. At December 31, 2022, management of the Company had not been notified by the clearing brokerdealer, nor were they otherwise aware, of any potential losses relating to this indemnification.
The Company is required to have an account at the clearing broker that shall at all times contain cash, securities, or a combination of both, having a market value of \$500,000 reflecting the combined total of the Minimum Equity Requirement of \$400,000 and the Clearing Deposit of \$100,000. These amounts are included within receivables from clearing organizations on the statement of financial condition.
#### Litigation
The Company from time to time may be involved in litigation relating to claims arising out of its normal course of business. Management believes that there are no claims or actions pending or threatened against the Company, the ultimate disposition of which would have a material impact on the Companys financial position, results of operations or cash flows.
#### Risk Management
The Company maintains various forms of insurance that Companys management believes are adequate to reduce the exposure to these risks to an acceptable level.
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# KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Notes to Financial Statements December 31, 2022
#### Note 7 Subsequent Events
The Company has evaluated subsequent events through February , 2023, the date the consolidated financial statements were available to be issued. Subsequent to the year end, the Company made a distribution to the Parent totaling \$495,000.
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
#### SCHEDULE I
| KERSHNER SECURITIES, LLC
(A Wholly Owned Subsidiary of Kershner Trading Group, LLC)
Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-1
As of December 31, 2022 | |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|
| SCHEDULE I | |
| Net capital:
Total member's equity | \$
2,173,148 |
| Less:
Receivable from related entities | 734,053 |
| Net capital before haircuts on securities positions | 1,439,095 |
| Other deductions | 13,000 |
| Net capital | \$
1,426,095 |
| Aggregate indebtedness:
Total liabilities | \$
311,776 |
| Total aggregate indebtedness | \$
311,776 |
| Minimum net capital requirement (greater of 6 2/3% of aggregate indebtedness or \$100,000) | \$
100,000 |
| Net capital in excess of minimum requirement | \$
1,326,095 |
| Ratio: Aggregate indebtedness to net capital | 0.22 to 1 |
The above computation does not differ from the Computation of Net Capital under Rule 15c3-1 as of December 31, 2022 as recorded by Kershner Securities, LLC on Form X-17A-5, filed on January 24, 2023. Accordingly, no reconciliation is deemed necessary.
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#### KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Schedule II and Schedule III December 31, 2022
#### Schedule II
#### Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission
The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the Rule. The Company does not hold funds or securities for or owe money or securities to customers.
#### Schedule III
#### Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission
The Company is exempt from provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the Rule. The Company did not maintain possession or control of any customer funds or securities.
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#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Those Charged with Governance and Member of Kershner Securities, LLC
We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule 17a-5, in which (1) Kershner Securities, LLC a Wholly Owned Subsidiary of Kershner Trading Group, LLC Securities, LLC claimed an exemption Securities, LLC stated that Kershner identified the following provision of 17 C.F.R. §15c3-3(k) under which Kershner from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provision") and (2) Kershner Securities, LLC met the identified exemption provision throughout the most recent fiscal year of December 31, 2022 without exception. Kershner Securities, LLC's management is responsible for compliance with the exemption provision and its statements. States) and, accordingly, included inquiries and other required procedures to obtain evidence about Kershner Securities, LLC's compliance with the exemption provision. A review is substantially less in scope than an examination, the Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph
Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion.
(k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934.
BAUER & COMPANY, LLC
Austin, Texas February 8, 2023
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Kershner Securities, LLC's Exemption Report
Kershner 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 (k)(2)(ii).
- (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.
Kershner Securities, LLC
I, Jon B. Sanderson, affirm that, to the best of my knowledge and belief, this Exemption Report is true and correct.
By:
Title: Chief Financial Officer
February 8, 2023
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#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES
To Those Charged with Governance and Member of Kershner Securities, LLC
We have 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 on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2022. Management of Kershner Securities, LLC, a Wholly Owned Subsidiary of Kershner Trading Group, LLC (the Company) is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7.
Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. 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 respective cash disbursement records entries, noting 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and
- no differences;
- ended December 31, 2022 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2022, noting the following difference: total revenues per the Form SIPC-7 were \$20,521,054 and total revenues per the audited financial statements were \$20,783,259, a difference of \$262,205;
- differences;
- working papers supporting the adjustments, noting following differences: total revenues per the Form SIPC-7 were \$20,521,054 and total revenues per the audited financial statements were \$20,783,259, a difference of \$262,205; net operating revenues per the Form SIPC-7 were \$10,386,579 and net operating revenues per the audited financial statements were \$10,453,080, a difference of \$66,501; and the general assessment per the Form SIPC-7 was \$15,580 and the general assessment per the audited financial statements was \$15,680 a difference of \$100. 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was
- originally computed, noting no differences.
P.O. Box 27887 Austin, TX 78755 We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
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We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties.
BAUER & COMPANY, LLC
Austin, Texas February 8, 2023
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| SIPC-7 | | SECURITIES INVESTOR PROTECTION CORPORATION
Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001 | | SIPC | |
|-------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|--|
| (36-REV 12/18) | General Assessment Reconciliation | | | (36-REV 12/18) | |
| | | 12/31/2022
For the fiscal year ended | | | |
| | | (Read carefully the instructions in your Working Copy before completing this Form) | | | |
| | | TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS | | | |
| | purposes of the audit requirement of SEC Rule 17a-5: | 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for | | | |
| Kershner Securities, LLC
1825-B Kramer Lane, Suite 200
Austin, TX 78758 | | | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form filed. | | |
| | | | Name and telephone number of person to
contact respecting this form.
Jon Sanderson 512-439-8140 | | |
| 07/11/2022
Date Paid
C. Less prior overpayment applied
G. PAYMENT: V the box
H. Overpayment carried forward | 2. A. General Assessment (item 2e from page 2)
B. Less payment made with SIPC-6 filed (exclude interest)
D. Assessment balance due or (overpayment)
Check mailed to P.O. Box Funds Wired
Total (must be same as F above) | E. Interest computed on late payment (see instruction E) for _________________________________________________________________________________________________________________
F. Total assessment balance and interest due (or overpayment carried torward)
કા
3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | \$ 15,580
9,565
6,015
- 0 -
6,015 | | |
| and complete. | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | Tershner Securities, LLC | (Name of Corpora on, Partnership or other organization)
(Authorized Signature) | | |
| Dated the 18th day of January | | | (Title) | | |
| Dates:
Postmarked | Received | This form and the assessment payment is due 60 days after the end of the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place.
Reviewed | | | |
| PC REVIEWER
Calculations _
Exceptions: | | Documentation _ | | Forward Copy ------ | |
| | | | | | |
| S
Disposition of exceptions: | | | | | |
网
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#### DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT
Amounts for the fiscal period
beginning 01/01/2022
| | | and ending 12/31/2022 |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
| Item No. | | Eliminate cents
\$20,521,054 |
| | 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | |
| 2b. Additions: | (1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | |
| | (2) Net loss from principal transactions in securities in trading accounts. | |
| | (3) Net loss from principal transactions in commodities in trading accounts. | |
| | (4) Interest and dividend expense deducted in determining item 2a. | |
| | (5) Net loss from management of or participation in the underwriting or distribution of securities. | |
| | (6) Expenses other than advertising, printing, registration fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | |
| | (7) Net loss from securities in investment accounts. | |
| | Total additions | |
| 2c. Deductions: | | |
| | (1) Revenues from the distribution of shares of a registered open end investment company of unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | |
| | (2) Revenues from commodity transactions. | |
| | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | 10,134,475 |
| | (4) Reimbursements for postage in connection with proxy solicitation. | |
| | (5) Net gain from securities in investment accounts. | |
| | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months of less
from issuance date. | |
| | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | |
| | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | |
| | (Deductions in excess of \$100,000 require documentation) | |
| | | |
| | | |
| | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
of total interest and dividend income. | |
| | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | |
| | Enter the greater of line (i) or (ii) | |
| | Total deductions | 10,134,475 |
| | 2d. SIPC Net Operating Revenues | 10,386,579 |
| | 2e. General Assessment @ .0015 | 15,580 |
| | | to nage 1 line 2 A 1 |
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.