# KERSHNER SECURITIES, LLC X-17A-5 (2024-02-29) — Broker-dealer annual report - Company: KERSHNER SECURITIES, LLC - Form: X-17A-5 - Filed: 2024-02-29 - Period: 2023-12-31 - Accession: 0001438071-24-000003 - 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: jsanderson@kershnertrading.com - Website: kershnertrading.com - Signed by: Jon B. Sanderson (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1438071/000143807124000003/ks23fs1.pdf --- {0}------------------------------------------------ UNITED STATES **SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | OMBAPPROVAL | | |--------------------------|--| | 0MB Number: 3235-0123 | | | Expires: Nov. 30, 2026 | | | Estimated average burden | | | hours per response: l 2 | | # **ANNUAL REPORTS FORM X-17 A-5 PART** Ill | SEC FILE NUMBER | | |-----------------|--| | 8-67922 | | **FACING PAGE** **Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** | FILING FOR THE PERIOD BEGINNING 01/01/2023 | | AND ENDING | 12/31/2023 | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|--------------------------------|------------|------------------------------------------------|--|--| | | MM/DD/VY | | | MM/DD/VY | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | __
NAME OF FIRM: | K_e_r_s_h_ne_r_s_ec_u_r_it_ie_s_, _L_L_C | _______________ | | _ | | | | TYPE OF REGISTRANT (check all applicable boxes):
D Security-based swap dealer
12] Broker-dealer
□ Major security-based swap participant
□ Check here if respondent is also an OTC derivatives dealer | | | | | | | | 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 | jsanderson@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 | Texas | | 78755 | | | | (Address) | (City) | | (State) | (Zip Code) | | | | 11/20/14 | | 6072 | | | | | | rte of R,glstrntioo with PCAOB)l;f applicable) | FOR OFFICIAL USE ONLY | | | I
(PCAOB R,gOtrntioo N,mb-,, ;f appllcabl•I | | | • 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-S(e)(l)(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 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** # Jon B. Sanderson | Jon B. Sanderson
_________________
I, | ___, swear (or affirm) t~~t, to the best of my knowledge and belief, the | | |---------------------------------------------|-----------------------------------------------------------------------------------|-------| | financial report pertaining to the firm of | Kershner Secunt1es, LLC | as of | | 2~
December 31 | 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 proprieta interest in any account classified solely as that of a customer. #### **This filing0 contains (check all applicable boxes):** - I!!!!! (a) Statement of financial condition. - □ (b) Notes to consolidated statement offinancial condition. - I!!!!! (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). - I!!!!! {d) Statement of cash flows. - I!!!!! (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - I!!!!! (g) Notes to consolidated financial statements. - I!!!!! (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D {i) Computation of tangible net worth under 17 CFR 240.18a-2. - I!!!!! (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D **(k}** 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. - Iii (m) Information relating to possession or control requ irements 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. - Iii (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-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.lSa-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. - I!!!!! (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 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. - **lil** (s) Exemption report in accordance with 17 CFR 240.l 7a-5 or 17 CFR 240.18a-7, as applicable. - D (t) Independent public accountant's report based on an examination of the statement of financial condition. - I!!!!! (u) Independent public accountant's report based on an examination of the financial report or 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. - (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 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or 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 certain portions of this filing, see 17 CFR 240.17a-5(e}{3) or 17 CFR 240.18a-7(d){2}, as applicable. APRIL S PITTS Notary ID #131911788 My Commission Expires March 10, 2027 {2}------------------------------------------------ # **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, 2023 {3}------------------------------------------------ # **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Index to Financial Statements and Supplemental Schedules December 31, 2023 | 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 | | SUPPLEMENTAL SCHEDULES | | | Computation of Net Capital and Aggregate Indebtedness
I.
Pursuant to Rule 15c3-l | 11 | | Computation for Determination of Reserve Requirements
II.
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 FIRM'S 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 ENTITY'S SIPC ASSESSMENT | | | RECONCILIATION | 15 | | Schedule of Assessment Payments on Form SIPC-7 as required under
Rule l 7a-5(e)(4)(i) of the Securities and Exchange Commission | 17 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### 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 , 2023, the related statements of operations, changes in member's 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 , 2023, 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 l 5c3-l 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 21 , 2024 Bauer & Company, **LLC** P.O. Box 27887 Austin, TX 78755 Tel 512.731.3518 / www.bauerandcompany.com {5}------------------------------------------------ # **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Financial Condition December 31 , 2023 #### **Assets** | Cash and cash equivalents
Receivable from clearing organization
Receivable from related entities
Other receivables | \$
91 ,893
1,271
,740
271
,610
137,067 | |-----------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------| | Total assets | \$
1,772,310
==:::::::::::===== | | Liabilities and member's equity | | | Accounts payable | \$
19,949 | | Other accrued expenses | 38,090 | | Payable to related entities | 26,126 | | Total liabilities | 84,165 | | Member's equity | 1,688,145 | | Total liabilities and member's equity | \$
1,772,310 | {6}------------------------------------------------ # **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Operations December 31 , 2023 | Revenue | | |--------------------------------------------------------|------------------| | Related party brokerage commissions | \$
15,655,457 | | Interest income | 116,930 | | Other revenue | 137,067 | | Total revenue | 15,909,454 | | Expenses | | | Related party labor allocation | 293,178 | | Commissions and clearing fees | 8,009,739 | | Related party communications and technology allocation | 19,647 | | Related party occupancy allocation | 26,847 | | Regulatory fees and expenses | 40,579 | | Related party other expenses | 1,857 | | Interest expense | 108,203 | | Other expenses | 53,104 | | Total expenses | 8,553,154 | | Income before income tax expense | 7,356,300 | | Franchise taxes | 51 ,303 | | Net income | \$
7,304,997 | {7}------------------------------------------------ # **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Changes in Member's Equity December 31 , 2023 | Balance at December 31
, 2022 | \$
2,173,148 | |----------------------------------|----------------------------------------| | Capital distributions | (7,790,000) | | Net income | 7,304,997 | | Balance at December 31
, 2023 | \$
1,688,145
==:::::i::::::===== | {8}------------------------------------------------ # **KERSHNER SECURITIES, LLC** **(A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Cash Flows December 31 , 2023 | Cash flows from operating activities: | | |-----------------------------------------------------------------------|-----------------| | Net income | \$
7,304,997 | | Adjustments to reconcile net income to net cash provided by operating | | | activities: | | | Changes in operating assets and liabilities: | | | Receivable from clearing organization | 227,307 | | Receivable from related entities | 462,444 | | Other receivables | (137,067) | | Accounts payable | (93,494) | | Other accrued expenses | (136,343) | | Payable to related entities | 2,225 | | Net cash provided by operating activities | 7,630,069 | | Cash flows from financing activities: | | | Capital distributions | (7,790,000) | | Net cash used in financing activities | (7,790,000) | | Net change in cash and cash equivalents | (159,931) | | Cash and cash equivalents at beginning of year | ,824
251 | | Cash and cash equivalents at end of year | \$
91 ,893 | | Supplemental disclosures of cash flow information: | | | Cash paid during the year for: | | | Interest | \$
108,208 | | Franchise taxes | \$
53,573 | {9}------------------------------------------------ #### **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 Company's 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 ("Goldman"). 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. In November 2023, the Company entered into a Referral and Commission Sharing Agreement ("RCSA") with T3 Trading Group, LLC ("T3TG") to refer certain of its related party clients for execution services relating to the purchase and sale of exchange listed equity securities and options contracts. Under this T3TG agreement, the Company will be paid a portion of the commissions and other related transactional income for transactions executed by T3TG. In 2023, substantially all of the Company's revenues are derived from commission income from a related entity (see Note 5). A small portion of the Company's 2023 revenues were derived from the referral fees under the RCSA with T3TG. #### **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 Company's 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. {10}------------------------------------------------ #### Receivable from Clearing Organization For the business the Company introduces to Goldman on behalf of its customer the transactions are cleared on a fully disclosed basis through its clearing broker-dealer, Goldman Sachs Execution & Clearing, L.P. At December 31 , 2023, the amount receivable from Goldman totaled \$1,271 ,740 consisting offees and commissions earned and collected on securities transactions for the Company. #### Other Receivables The Company entered into a Referral and Commission Sharing Agreement with T3 Trading Group, LLC ("T3TG") on referred business of a related party. At December 31 , 2023, the amount of the receivable from T3TG totaled \$137,067 consisting ofreferral fees earned on securities transactions. #### 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. Revenue also includes referral fees and dividends. Referral fees are recorded as earned and dividends are recorded on the exdividend 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. #### *Referred Revenue* The Company serves a source ofreferrals to T3TG and receives a referral fee for the purchases and sales transactions of its referred customer. Referral fees are recorded when earned based on when the Company's performance obligations under the referral agreement are deemed to have been met. The Company believes that the performance obligation is satisfied on the trade date of the underlying financial transaction and/or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have 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 , 2023. #### 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 {11}------------------------------------------------ Parent. The Company has recorded \$51 ,303 of Texas margin tax expense for the year ended December 31 , 2023. 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. Umecognized 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 , 2023 . #### 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 , 2023 due to their relatively short maturities and prevailing market terms. #### 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 Company's financial position, results of operations or cash flows. #### **Note 3 - Member's 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 l 5c3-l 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 , 2023, the Company had net capital of \$1 ,266,468 and net capital requirements of\$100,000. The Company's ratio of aggregate indebtedness to net capital was 0.07 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 l 5c3-3 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. {12}------------------------------------------------ #### **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 \$211 ,653 of expense under this agreement for the year ended December 31 , 2023, of which \$22,080 was payable at December 31 , 2023. 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 , 2023, of which \$4,046 was payable at December 31 , 2023 . 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 \$15,655,457 in commission income directly through transactions processed at the clearing broker during 2023 resulting from trading activity of Americas of which \$271 ,610 was receivable at December 31 , 2023. The Company anticipates collection of the receivable and has not recorded an allowance. Additionally,. The balance of the payment to be received from Americas is charged via the invoicing process outlined previously. The Company also paid Americas \$81 ,324 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 Company's clearing agreement with its clearing broker-dealer is an indemnification clause. This clause relates to instances where the Company's 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 , 2023, 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. {13}------------------------------------------------ #### *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 Company's financial position, results of operations or cash flows. #### *Risk Management* The Company maintains various forms of insurance that Company's management believes are adequate to reduce the exposure to these risks to an acceptable level. # **Note 7** - **Subsequent Events** The Company has evaluated subsequent events through February 21 , 2024, 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 \$1,150,000. {14}------------------------------------------------ #### **KERSHNER SECURITIES, LLC** **(A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-l As of December 31 , 2023 #### **SCHEDULE I** | Net capital: | | |--------------------------------------------------------------------------------------------|-----------------| | Total member's equity | \$
1,688,145 | | Less: | | | Receivable from related entities | 271 ,610 | | Other receivables | 137,067 | | | | | Net capital before haircuts on securities positions | 1,279,468 | | | | | Other deductions | 13,000 | | | | | Net capital | \$
1,266,468 | | | | | Aggregate indebtedness: | | | Total liabilities | \$
84,165 | | | | | Total aggregate indebtedness | \$
84,165 | | | | | Minimum net capital requirement (greater of 6 2/3% of aggregate indebtedness or \$100,000) | \$
100,000 | | | | | Net capital in excess of minimum requirement | \$
1,166,468 | | | | | Ratio: Aggregate indebtedness to net capital | 0.07 to 1 | | | | The above computation does not differ from the Computation of Net Capital under Rule 15c3-l as of December 31, 2023 as recorded by Kershner Securities, LLC on Form X-17 A-5, as amended and filed on February 21 , 2024. Accordingly, no reconciliation is deemed necessary. See notes to financial statements and report of independent registered public accounting firm. {15}------------------------------------------------ # **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Schedule** II **and Schedule** III December 31 , 2023 # **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. {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) #### 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 l 7a-5, in which (l) Kershner Securities, LLC a Wholly Owned Subsidiary of Kershner Trading Group, LLC identified the following provision of 17 C.F.R. § l 5c3-3(k) under which Kershner Securities, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provision") and (2) Kershner Securities, LLC stated that Kershner Securities, LLC met the identified exemption provision throughout the most recent fiscal year of December 31 , 2023 without exception. Kershner Securities, LLC's management is responsible for compliance with the exemption provision 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 Kershner Securities, LLC's compliance with the exemption provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opm10n. 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 (k)(2)(ii) of Rule l 5c3-3 under the Securities Exchange Act of 1934. **BAUER & COMPANY, LLC** Austin, Texas February 21 , 2024 {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) Kershner Securities, LLC's Exemption Report Kershner Securities, LLC (the "Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240. l 7a-5 "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.l 7a-5(d)(l) and (4). To the best of its 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, affinn that, to the best of my knowledge and belief, this Exemption Report is true and correct. ief Financial Officer F ebn1ary 21, 2024 {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES To Those Charged with Governance and Member of Kershner Securities, LLC We have performed the procedures included in Rule l 7a-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 , 2023. 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 , 2023. 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: - l) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17 A-5 Part III for the year ended December 31 , 2023 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31 , 2023, noting no differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 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 following differences: no differences; - 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. 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 AICP A 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 , 2023. 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. {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) 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 21 , 2024 {20}------------------------------------------------ #### SECURITIES INVESTOR PROTECTION CORPORATION SIPC-7 37 REV 0722 #### **GENERALASSESSMENTFORM** For the fiscal year ended 12/31/2023 | | Determination of "SIPC NET Operating Revenues" and General Assessment for:
MEMBER NAME
SEC No.
KERSHNER SECURITIES LLC
8-67922 | | |---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | 1/1/2023
and ending
For the fiscal period beginning | 12/31/2023 | | 1 | Total Revenue (FOCUS Report - Statement of Income (Loss)-
Code 4030) | \$ 15,909,454.00 | | 2 | Additions: | | | | a Total revenues from the securities business of subsidiaries (except foreign
subsidiaries) and predecessors not included above. | | | | b Net loss from principal transactions in securities in trading accounts. | | | | c Net loss from principal transactions in commodities in trading accounts. | | | | d Interest and dividend expense deducted in determining item 1. | | | | e Net loss from management of or participation in the underwriting or
distribution of securities. | | | | f Expenses other than advertising, printing, registration fees and legal fees
deducted in determining net profit management of or participation in
underwriting or distribution of securities. | | | | g Net loss from securities in investment accounts. | | | | h Add lines 2a through 2g. This is your total additions. | \$ 0.00 | | 3 | Add lines 1 and 2h | \$ 15,909,454.00 | | 4 | Deductions: | | | | a Revenues from the distribution of shares of a registered open end investment
company or 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. | | | | b Revenues from commodity transactions. | | | | c Commissions, floor brokerage and clearance paid to other SIPC members
in connection with securities transactions. | \$7,758,313.00 | | | d Reimbursements for postage in connection with proxy solicitations. | | | | e Net gain from securities in investment accounts. | | | | f 100% commissions and markups earned from transactions in (I) certificates
of deposit and (ii) Treasury bills, bankers acceptances or commercial paper
that mature nine months or less from issuance date. | | | | g 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). | | | | h Other revenue not related either directly or indirectly to the securities business.
Deductions in excess of \$100,000 require documentation | | | 5 | a Total interest and dividend expense (FOCUS Report - Statement
of Income (Loss)- Code 4075 plus line 2d above) but
not in excess of total interest and dividend income
\$ 108,203.00 | | | | b 40% of margin interest earned on customers securities accounts
(40% of FOCUS Report- Statement of Income (Loss)-
Code 3960) | | | | c Enter the greater of line 5a or 5b | \$ 108,203.00 | | 6 | Add lines 4a through 4h and 5c. This is your total deductions. | \$7,866,516.00 | {21}------------------------------------------------ | SIPC-7
37 REV 0722 | SECURITIES INVESTOR PROTECTION CORPORATION | | SIPC-7
37 REV 0722 | |-----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|-----------------------| | | GENERAL ASSESSMENT FORM | | | | | For the fiscal year ended
12/31/2023 | | | | 7 | Subtract line 6 from line 3. This is your SIPC Net Operating Revenues. | | \$ 8,042,938.00 | | 8 | Multiply line 7 by .0015. This is your General Assessment. | | \$12,064.00 | | 9 | Current overpayment/credit balance, if any | | \$ 0.00 | | 10 | General assessment from last filed 2023 SIPC-6 or 6A | \$7,924.00 | | | 11 | \$ 0.00
a Overpayment(s) applied on all 2023 SIPC-6 and 6A(s)
\$ 0.00
b Any other overpayments applied
\$7,924.00
c All payments applied for 2023 SIPC-6 and 6A(s)
d Add lines 11a through 11c | \$ 7,924.00 | | | 12 | LESSER of line 10 or 11d. | | \$7,924.00 | | | 13 a Amount from line 8
b Amount from line 9
c Amount from line 12
d Subtract lines 13b and 13c from 13a. This is your assessment balance due. | \$12,064.00
\$ 0.00
\$7,924.00 | \$4,140.00 | | 14 | Interest (see instructions) for
O
days late at 20% per annum | | \$ 0.00 | | 15 | IIAmount you owe SIPC. Add lines 13d and 14. | | \$4,140.0011 | | 16 | Overpayment/credit carried forward (if applicable) | | \$ 0.00 | | SEC No.
8-67922 | Designated Examining Authority
FYE
DEA: FINRA
2023
MEMBER NAME
KERSHNER SECURITIES LLC
MAILING ADDRESS
1825-B KRAMER LANE STE 200 | Month
Dec | | | | AUSTIN , TX 78758-4281
UNITED STATES | | | Subsidiaries (S) and predecessors (P) included in the form (give name and SEC number) [Z] By checking this box, you certify that you have the authority of the SIPC member to sign this form; that all information in this form is true and complete; and that on behalf of the SIPC member, you are authorized , and do hereby consent, to the storage and handling by SIPC of the data in accordance with SI PC's Privacy Policy | KERSHNER SECURITIES LLC | Jon B. Sanderson | |-------------------------|--------------------------------| | (Name of SIPC Member) | (Authorized Signatory) | | 2/22/2024 | jsanderson@kershnertrading.com | | (Date) | (e-mail address) | Completion of the "Authorized Signatory" line will be deemed a signature. **This form and the assessment payment are due 60 days after the end of the fiscal year.** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.