# MACRO RISK ADVISORS LLC X-17A-5 (2019-03-15) — Broker-dealer annual report - Company: MACRO RISK ADVISORS LLC - Form: X-17A-5 - Filed: 2019-03-15 - Period: 2018-12-31 - Accession: 0001442138-19-000001 - CIK: 1442138 - File #: 8-67973 - Material weakness: No - Auditor: WITHUMSMITH&BROWN - Auditor location: PHILADELPHIA, PA - Contact: Janice Parise - Phone: 212 751-4422 - Signed by: DEAN CURNUTT (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1442138/000144213819000001/shortver2018v7.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** # **ANNUAL AUDITED REPORT FORM X-17A-5 PARTIII** 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ...... 12.00 # SEC FILE NUMBER 8-67973 **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the** | -----------
AND ENDING 12/31/2018
MM/DD/YY | | |--------------------------------------------------|--| | | | | OFFICIAL USE ONLY | | | FIRM I.D. NO. | | | | | | | | | | | | | | | (212)287-2640 | | | (Area Code - Telephone Number) | | | | | | | | | | | | | | | 19103 | | | (Zip Code) | | | | | | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* > **Potential persons who are to respond to the collection of Information contained In this f1. | |--------------------| |--------------------| I, DEAN CURNUTT , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of MACRO RISK ADVISORS LLC , as of DECEMBER 31 are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: | Signature | | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|--|--|--| | JANICE PARISE
Notary Public, State of New York
CHIEF EXECUTIVE OFFICER | | | | | | No. 41-4968956
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Expires J1.1ly 9, 26.iA!t-- | | | | | | | | | | | | This repor
ontains (check all applicable boxes): | | | | | | 0 (a) Facing Page. | | | | | | [2] (b) Statement of Financial Condition.
D (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. | | | | | | B
□ (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | | | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | | | | | | | | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | | | | § (g) Computation of Net Capital.
(i) lnfonnation Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | | | | D (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule l 5c3- | l and the | | | | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l 5c3-3. | | | | | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
consolidation. | | | | | | An Oath or Affirmation. | | | | | | (m) A copy of the SIPC Supplemental Report. | | | | | | § (1)
(n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | | | | | | | | | | | | ** For conditions of confidential treatment of certain portions of this filing, see section 240. I 7 a-5(e)(3). | | | | | {2}------------------------------------------------ Macro Risk Advisors, LLC With Report of Independent Registered Public Accounting Firm Statement of Financial Condition Pursuant to Rule 17a-5 under the Securities Exchange Actof1934 December 31, 2018 {3}------------------------------------------------ # **Page(s)** | Report of Independent Registered Public Accounting Firm 1 | | |------------------------------------------------------------|--| | Statement of Financial Condition 2 | | | Notes to Statement of Financial Condition . 3--6 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member Macro Risk Advisors, LLC ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Macro Risk Advisors, LLC (the "Company"), as of December 31, 2018, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. ## **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2015. March 14, 2019 {5}------------------------------------------------ # **Macro Risk Advisors, LLC Statement of Financial Condition December 31, 2018** | Assets | | |--------------------------------------------------------------------------|------------------------| | Cash | \$
2,972,009 | | Accounts receivable, net | 1,748,458 | | Due from clearing broker | 1,708,058 | | Contract assets | 1,338,549 | | Prepaid expenses | 65,393 | | Total assets | \$
7,832,467 | | Liabilities and Member's Equity
Accounts payable and accrued expenses | \$
2,178,437 | | Total liabilities
Member's equity | 2,178,437
5,654,030 | | Total Liabilities and Member's Equity | \$
7,832,467 | The accompanying notes are an integral part of this Statement of Financial Condition. {6}------------------------------------------------ #### **1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### **Organization** Macro Risk Advisors, LLC (the **"Company''),** a New York Limited Liability Company, is a registered broker-dealer under the Securities Exchange Act of 1934. The Company clears its securities transactions on a fully disclosed basis with a clearing broker. The Company's effective date of organization was May 9, 2008, and the effective date of the Company's registration as a brokerdealer was April 14, 2009. The Company is a derivatives strategy and transaction execution firm specializing in generating trade ideas and providing financial market intelligence to institutional investors. The Company uses its expertise in derivative sales trading and its access to a diverse liquidity pool to help its clients execute trades in an efficient manner. The Company is a wholly owned subsidiary of Macro Holdings, LLC (the **"Parent''),** and is a member of the Securities Investor Protection Company **(''SIPC'')** and Financial Industry Regulatory Authority **("FINRA'').** #### **Accounting Estimates** The preparation of financial statements in conformity with U.S generally accepted accounting principles 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. #### **Concentrations of Credit Risk** Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company places its cash with high credit quality financial institutions. At times, such amounts may exceed federally insured limits. Account monitoring procedures are utilized to minimize the risk of loss from accounts receivable. The Company generally does not require collateral or other security from its customers. #### **Accounts Receivable** Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company's historical losses, current economic conditions, and the financial stability of its customers. Accounts receivable are recognized when revenue is earned and billed, and are recorded net of collections or write-offs. During the period, accounts receivable were \$57,575 at January 1, 2018 and \$1,748,458 at December 31, 2018. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. The Company generally does not charge interest. At December 31, 2018, the Company carried an allowance of \$841,000 for doubtful accounts. #### **Revenue Recognition** Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (1) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, {7}------------------------------------------------ and (e) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applied the modified retrospective method of adoption which resulted in no adjustment as of January 1, 2018. Securities transactions and the related revenues and expenses are recorded on a trade-date basis as securities transactions occur. The Company believes that the performance obligation is satisfied on the trade-date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Research fees received in return for a research product, either directly from clients or from brokers, are recorded when services are delivered. Contract assets arise when the revenue associated with the contract is recognized prior to the Company's unconditional right to receive payment under a contract with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a receivable or the cash is received. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Contract assets were \$408,923 at January 1, 2018 and \$1,338,549 at December 31 , 2018. There were no contract liabilities as of December 31, 2018. Revenue from contracts with customers includes fees from commissions. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. Disaggregation of revenue is presented on the face of the Statement of Operations by type of revenue streams the Company earns. #### **Income Taxes** The Company is a limited liability company (LLC) and a wholly-owned subsidiary of the Parent which is also a limited liability company. For both federal and state tax purposes, LLC's are taxed as partnerships. All income taxes on net earnings are payable by the members of the LLC and, accordingly, no provision for income taxes is required. Accounting standards clarify the accounting for uncertainty in income taxes recognized in an enterprise's financial statements by prescribing a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Accounting standards also provide guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition. It is the Company's policy to record interest and penalties related to uncertain income tax positions, if any, as a component of income tax expense. As of December 31, 2018, the Company had no uncertain tax positions that would require recognition or disclosure in the financial statements. The Company does not file income tax returns because it is a disregarded entity for income tax purposes. {8}------------------------------------------------ ## Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases, which replaces the existing guidance in ASC 840, Leases. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. The guidance will be effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has evaluated the impact of ASU 2016-02 and the adoption is expected to have a significant impact on the Company's statement of financial condition , however, it will have a minimal impact on the statement of operations. ## **2. CLEARING AGREEMENT** The Company introduces its customer transactions to a clearing broker with which it has a correspondent relationship for execution and clearance in accordance with the terms of a clearance agreement. In connection therewith, the Company is required to maintain a collateral account with its clearing broker that serves as collateral for any losses that the clearing broker may sustain as a result of the failure of the Company's customers to satisfy their obligations in connection with their securities transactions. As of December 31, 2018, the Company has a receivable of \$1,708,058 from clearing broker. ## **3. REGULATORY REQUIREMENTS** The Company is exempt from the provisions of Rule 15c3-3 of the Securities Exchange Act of 1934 (reserve requirements for brokers and dealers) in that the Company does not hold funds or securities for customers. All customer transactions are cleared through another broker-dealer on a fully-disclosed basis. Pursuant to the net capital provisions of Rule 15c3-1 under the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined, equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2018, the Company had net capital of \$2,501,517 and minimum net capital requirements of \$145,230. The ratio of aggregate indebtedness to net capital was .87 to 1. #### **4. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET CREDIT RISK** As discussed in Note 3, the Company's customers' securities transactions are introduced on a fully disclosed basis with its clearing broker/dealer. The clearing broker/dealer and other custodians carry all of the accounts of the customers of the Company and are responsible for custody, collection and payment of funds, and receipt and delivery of securities related to customer transactions. Off-balance-sheet risk exists with respect to these transactions due to the possibility that customers may be unable to fulfill the contractual commitments wherein the clearing broker/dealer may charge any losses it incurs to the Company. The Company seeks to minimize this risk through procedures designed to monitor the credit worthiness of its customers and to ensure that customer transactions are processed properly by the clearing broker/dealer. As of December 31, 2018, all unsettled securities transactions were settled with no resulting liability to the Company. {9}------------------------------------------------ In addition, the Company maintains a cash account with the clearing broker/dealer. As a result, the Company is exposed to credit risk in the event of insolvency or other failure of the clearing broker/dealer to meet its obligations. The Company manages this risk by dealing with a major financial institution and monitoring its credit worthiness. #### **5. COMMITMENTS** The Parent of the Company is the named lessee of the Company's office space. However, all costs of this lease are absorbed by the Company. This lease expires in 2021. Future minimal payments under this lease are \$455,832 in 2019, \$466,088 in 2020 and \$275,420 in 2021. #### **6. SUBSEQUENT EVENTS** Subsequent events have been evaluated through the date the financial statements were issued. No material subsequent events have occurred since December 31, 2018 that required recognition or disclosure in our current period financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.