# SABADELL SECURITIES USA, INC. X-17A-5 (2022-02-28) — Broker-dealer annual report - Company: SABADELL SECURITIES USA, INC. - Form: X-17A-5 - Filed: 2022-02-28 - Period: 2021-12-31 - Accession: 0001442140-22-000001 - CIK: 1442140 - File #: 8-67975 - Type: Broker-dealer - Material weakness: No - Auditor: KPMG LLP - Auditor location: Miami, FL - Contact: Steven Singer - Phone: 561-784-8922 - Email: ssinger@sabsecurities.com - Website: sabsecurities.com - Signed by: Virginia Labiste (President and CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1442140/000144214022000001/sabadellsecurities2021.pdf --- {0}------------------------------------------------ # **Sabadell Securities USA, Inc.** **Financial Statements and Supplemental Schedules Pursuant to Rule 17a-5 of the Securities and Exchange Commission December 31, 2021** {1}------------------------------------------------ | | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 | | OMB APPROVAL
OMB Number: 3235-0123
Expires: Oct. 31, 2023
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hours per response: 12 | | |----------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------|--| | | | ANNUAL REPORTS | | SEC FILE NUMBER | | | | FORM X-17A-5 | | | 8-67975 | | | | | PART III | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934
FILING FOR THE PERIOD BEGINNING | 01/01/2 | FACING PAGE
FREE P REAL COMPLETERS | AND ENDING | 12/31/21 | | | | | MM/DD/YY | | MM/DD/YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: | SABADELL SECURITIES USA, INC. | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
O Check here if respondent is also an OTC derivatives dealer | Security-based swap dealer | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 1111 BRICKELL AVENUE, 30TH FLOOR | | | | | | | | | (No. and Street) | | | | | MIAMI | | FLORIDA | | 33131 | | | (City) | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | STEVEN SINGER | | 561-784-8922 | | SSINGER@SABSECURITIES.COM | | | (Name) | | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
KPMG, LLP | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 78 SW 7TH STREET, SUITE 1200 | | MIAMI | FL | 33130 | | | (Address) | | (City) | (State) | (Zip Code) | | | 10/20/2003 | | | 185 | | | | (Date of Registration with PCAOB)(if applicable) | | FOR OFFICIAL USE ONLY | | (PCAOB Registration Number, if applicable) | | | * Claims for exemption from the requirement that the annual reports of an independent public | | | | | | {2}------------------------------------------------ | VIRGINIA LABISTE | swear (or affirm) that, to the best of my knowledge and believe | |--------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of SABADELL SECURITIES USA, INC. | | | DECEMBER 31 | 2 U21 , is true and correct. I further swear (or affirm) that neither the company n | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified | | as that of a customer. | | | | | | | Signature! | | | KATHERINE BLANCO
| - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # **Sabadell Securities USA, Inc. Index December 31, 2021** | Page(s) | | | |---------|--|--| | | | | | Report of Independent Registered Public Accounting Firm 1 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Financial Statements | | Statement of Financial Condition 2 | | Statement of Income 3 | | Statement of Changes in Stockholder's Equity 4 | | Statement of Cash Flows 5 | | Notes to Financial Statements 6–10 | | Supplemental Schedules | | Schedule I – Computation of Net Capital under Rule 15c3-1 of
the Securities and Exchange Commission 11 | | Schedule II – Computation for Determination of Customer Reserve Requirements
and PAB Accounts Reserve Requirements and Information for Possession or Control
Requirements for Broker-Dealers under Rule 15c3-3 of the Securities and Exchange Commission 12 | | Other Information | | Sabadell Securities USA, Inc.'s Exemption Report 13 | | Report of Independent Registered Public Accounting Firm on Sabadell Securities USA, Inc.'s
Exemption Report 14 | | Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon
Procedures on the General Assessment Reconciliation (Form SIPC-7) Required by
Rule 17a-5(e)(4) of the Securities and Exchange Commission 15–16 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) KPMG LLP Brickell City Center, Suite 1200 78 SW 7 Street Miami, FL 33130 ### **Report of Independent Registered Public Accounting Firm** To the Stockholder and the Board of Directors Sabadell Securities USA, Inc.: ### *Opinion on the Financial Statements* We have audited the accompanying statement of financial condition of Sabadell Securities USA, Inc. (the Company) as of December 31, 2021, the related statements of income, changes in stockholder's equity, and cash flows for the year then ended, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles. #### *Basis for Opinion* These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a 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. #### *Accompanying Supplemental Information* The supplemental information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. § 240.17a-5. In our opinion, the supplemental information contained in Schedules I and II is fairly stated, in all material respects, in relation to the financial statements as a whole. ![](_page_4_Picture_11.jpeg) We have served as the Company's auditor since 2020. February 25, 2022 {5}------------------------------------------------ # **Sabadell Securities USA, Inc. Statement of Financial Condition December 31, 2021** #### **Assets** | Cash and cash equivalents | \$
3,929,554 | |--------------------------------------------------------|-----------------| | Securities owned, at fair value | 3,088,598 | | Deposit with clearing broker | 250,000 | | Deferred tax assets, net | 60,451 | | Prepaids and other assets | 102,170 | | Total assets | \$
7,430,773 | | Liabilities and Stockholder's Equity | | | Accrued expenses and other liabilities | \$
226,989 | | Total liabilities | 226,989 | | Stockholder's equity | | | Common stock, \$10 par value, 1,000 shares authorized, | | | issued and outstanding | 10,000 | | Additional paid-in capital | 790,000 | | Retained earnings | 6,403,784 | | Total stockholder's equity | 7,203,784 | | Total liabilities and stockholder's equity | \$
7,430,773 | {6}------------------------------------------------ #### **Revenues** | Commissions | \$
3,356,689 | |----------------------------------------|-----------------| | Interest income and other income | 4,267 | | Total revenues | 3,360,956 | | Expenses | | | Salaries and benefits | 1,177,490 | | Fees and services | 947,834 | | Professional fees | 230,416 | | Telecommunications and data processing | 81,366 | | Other | 41,309 | | Occupancy | 36,162 | | Interest | 3,460 | | Total expenses | 2,518,037 | | Income before income tax expense | 842,919 | | Income tax expense | 198,499 | | Net income | \$
644,420 | {7}------------------------------------------------ # **Sabadell Securities USA, Inc. Statement of Changes in Stockholder's Equity Year Ended December 31, 2021** | | Common Stock | | | | Additional
paid-in | Retained | Total
stockholder's
equity | | |-------------------------------|--------------|--------|--------|---------|-----------------------|-----------------|----------------------------------|-----------| | | Shares | Amount | | capital | earnings | | | | | Balances at December 31, 2020 | 1,000 | \$ | 10,000 | \$ | 790,000 | \$
5,759,364 | \$ | 6,559,364 | | Net income | - | | - | | - | 644,420 | | 644,420 | | Balances at December 31, 2021 | 1,000 | \$ | 10,000 | \$ | 790,000 | \$
6,403,784 | \$ | 7,203,784 | {8}------------------------------------------------ | Cash flows from operating activities | | |-----------------------------------------------------------------------------------------------------------------------|-----------------| | Net income | \$
644,420 | | Adjustments to reconcile net income to net cash | | | provided by operating activities | | | Deferred tax expense | (5,565) | | Changes in assets and liabilities | | | Securities owned, at fair value | (783) | | Prepaids and other assets | (42,855) | | Accrued expenses and other liabilities | (170,967) | | Net cash provided by operating activities | 424,250 | | Net increase in cash, cash equivalents, and restricted cash | 424,250 | | Cash, cash equivalents, and restricted cash | | | Beginning of year | 3,755,304 | | End of year | \$
4,179,554 | | Supplemental cash flow disclosures | | | Cash paid | | | Interest | \$
3,460 | | Income taxes | \$
448,000 | | Reconciliation of cash, cash equivalents, and restricted cash
reported within the Statement of Financial Condition | | | Cash and cash equivalents | \$
3,929,554 | | Deposit with clearing broker | \$
250,000 | | | | {9}------------------------------------------------ #### **1. Organization and Summary of Significant Accounting Policies** Sabadell Securities USA, Inc. (the "Company"), a wholly owned subsidiary of Banco Sabadell S.A., incorporated on May 23, 2008, is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company's registration with FINRA was effective as of May 21, 2009. The operations start date was February 24, 2010, upon receiving approval from the Federal Reserve to commence operations. On October 26, 2010, the Company received FINRA approval for an expansion of certain business lines including: mutual fund retailer, municipal securities broker, private placements of securities, and investment advisory services. The Company provides introductory brokerage and investment services primarily for Banco Sabadell S.A. and its subsidiaries. Custody of securities owned by customers of the Company and all securities transactions are settled through a third party clearing broker on a fully disclosed basis. Revenues derived from these services are recognized in the accompanying statement of income. Following is a description of the significant accounting policies and practices followed by the Company in the preparation of the accompanying financial statements. These policies conform to U.S. generally accepted accounting principles ("U.S. GAAP"). #### **Use of Estimates** The preparation of financial statements in conformity with U.S. GAAP 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. #### **Cash and Cash Equivalents and Deposit with Clearing Broker** Cash and cash equivalents consist of cash in banks, money market funds, and firm margin accounts at the clearing institution. There is also a deposit held with the clearing institution in accordance with the clearing agreement. These funds are considered restricted cash and are presented in the statement of financial condition as deposit with clearing broker. #### **Customers' Securities Transactions** Customers' securities transactions and the related riskless principal trading fees, commissions, and expenses are recorded on a trade date basis. 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. Receivable from customers and payable to brokers, if any, represent security transactions that have not settled. #### **Securities Owned** Securities owned are recorded on a trade date basis and carried at fair value, and the related changes in fair value are included in other income in the statement of income. #### **Income Taxes** The Company is subject to U.S. federal and state income taxes. The Company utilizes an asset and liability approach to account for income taxes. The asset and liability approach requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. Deferred tax assets are required to be reduced by a valuation allowance to the extent that management believes {10}------------------------------------------------ it is more likely than not that the deferred tax asset will not be realized. Management has determined that a valuation allowance is not necessary as of December 31, 2021. The Company recognizes tax benefits from uncertain tax positions when it is more likely than not that the related tax positions will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the tax positions. An uncertain tax position is a position taken in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law. The Company measures tax benefits related to uncertain tax positions based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. If the initial assessment fails to result in recognition of a tax benefit, the Company subsequently recognizes a tax benefit if (i) there are changes in tax law or case law that raise the likelihood of prevailing on the technical merits of the position to more-likely-than-not, (ii) the statute of limitations expires, or (iii) there is a completion of an examination resulting in a settlement of that tax year or position with the appropriate agency. The Company would recognize interest and penalties related to unrecognized tax positions in the provision for income taxes and other liabilities. Management has identified no uncertain tax positions at December 31, 2021. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2018. #### **Net Capital Requirements** The Company is subject to the SEC Uniform Net Capital Rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital, as defined, equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness, as defined. At December 31, 2021, the Company had net capital of \$6,979,175 which was \$6,964,042 in excess of the minimum amount required. The Company claims exemption from the SEC's Customer Protection Rule ("Rule 15c3-3"). Section (k)(2)(ii) of Rule 15c3-3 allows for this exemption since all customer transactions are cleared through other broker-dealers on a fully-disclosed basis. #### **2. Cash Segregated Under Federal Regulations** Rule 15c3-3 under the Securities and Exchange Act of 1934 (the "Rule") specifies certain conditions under which brokers and dealers carrying customer accounts are required to maintain cash or qualified securities in a special reserve bank account for the exclusive benefit of customers. The Company clears all transactions with and for customers on a fully disclosed basis, and the Company does not otherwise hold funds or securities for, or owe money to customers. The Company claims exemption from the provisions of Rule 15c3-3 pursuant to the provisions of subparagraph (k)(2)(ii). #### **3. Related Party Transactions** The Company entered into a Networking and Services Agreement with Banco de Sabadell, S.A. – Miami Branch (the "Branch") that commenced on May 1, 2009 and is periodically reviewed and amended. Under this agreement, salaries and bonuses, rent, IT support, HR support and administration and other general services are paid to the Branch and are considered related party transactions. Included in the statement of income are revenues and expenses resulting from various securities trading with certain affiliates, as well as fees for administrative services performed by the Company under the terms of various agreements. {11}------------------------------------------------ # **Sabadell Securities USA, Inc. Notes to Financial Statements December 31, 2021** The following table sets forth the Company's related party revenues and expenses for the year ended December 31, 2021: #### **Revenues** | Commissions | \$
2,513,755 | |----------------------------------------|-----------------| | Total revenues | \$
2,513,755 | | Expenses | | | Salaries and benefits | \$
1,177,490 | | Occupancy | 36,162 | | Other | 26,400 | | Telecommunications and data processing | 25,200 | | Total expenses | \$
1,265,252 | #### **4. Income Taxes** The components of the income tax provision are as follows for the year ended December 31, 2021: | Current | | |--------------------|---------------| | Federal | \$
173,745 | | State | 30,319 | | | 204,064 | | Deferred | | | Federal | (4,611) | | State | (954) | | | (5,565) | | Income tax expense | \$
198,499 | At December 31, 2021, the Company's deferred tax assets (liabilities) consist of the following taxeffected temporary differences: | Deferred tax assets | | |-------------------------------------|--------------| | Accrued professional fees | \$
57,454 | | Capitalized start-up expenditures | 14,287 | | Total deferred tax assets | 71,741 | | Deferred tax liabilities | | | Prepaid expenses | (11,285) | | Unrealized loss on securities owned | (5) | | Total deferred tax liabilities | (11,290) | | Net deferred tax assets | \$
60,451 | The deferred tax provision consists of income tax related to differences between the tax basis of assets and liabilities and their financial reporting amounts. The Company's effective tax rate for the year ended December 31, 2021 was 23.5% comprised of the U.S. federal statutory rate of 21% and a state rate of 2.5%, net of federal benefit. {12}------------------------------------------------ #### **5. Fair Value of Financial Instruments** Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a hierarchy that prioritizes inputs used to determine fair value measurements into three levels based on the observability and transparency of the inputs: - Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. - Level 2 Observable inputs other than Level 1 inputs, including quoted prices for similar assets and liabilities, quoted prices for identical assets and liabilities in less active markets and other inputs that can be corroborated by observable market data. - Level 3 Unobservable inputs supported by little or no market activity or data and inputs requiring significant management judgment or estimation. The following table presents the Company's fair value for assets and liabilities measured at fair value on a recurring basis as of December 31, 2021: | | December 31, 2021 | | | | | | | | |----------------------------|-------------------|-----------|---------|---|---------|---|-------|-----------| | | Level 1 | | Level 2 | | Level 3 | | Total | | | | | | | | | | | | | Assets | | | | | | | | | | Securities owned (1) | \$ | 3,088,598 | \$ | - | \$ | - | \$ | 3,088,598 | | Total assets at fair value | \$ | 3,088,598 | \$ | - | \$ | - | \$ | 3,088,598 | (1) Consists of a U.S. Government Treasury Debt Security There are no liabilities measured at fair value on a recurring basis at December 31, 2021. #### **Level 1 Valuation Techniques** The valuation of U.S. Government Treasury debt securities is based on quoted prices for identical assets in active markets that can be accessed as of the measurement date. U.S. GAAP requires the disclosure of estimated fair value of financial instruments including those financial instruments for which the Company did not elect the fair value option or are not measured at fair value on a recurring basis. The fair value of such instruments has been derived, in part, from the amount and timing of future cash flows and estimated discount rates. Due to the short term maturity or repricing frequency, the carrying value was considered to approximate the fair value for cash and cash equivalents, and deposit with clearing broker. Management considered such instruments to be classified as Level 1. {13}------------------------------------------------ #### **6. Subsequent Events** Subsequent events have been evaluated through the date that the financial statements were available to be issued on February 25, 2022. The Company has not identified any events that would require disclosure or have a material impact on the financial position, result of operations or cash flows of the Company as of and for the year ended December 31, 2021. {14}------------------------------------------------ **Supplemental Schedules** {15}------------------------------------------------ # **Sabadell Securities USA, Inc. Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission December 31, 2021 Schedule I** | Computation of net capital | | |----------------------------------------------------------------------------------------------|-----------------| | Total stockholder's equity | \$
7,203,784 | | Deductions and/or charges: | | | Nonallowable assets: | | | Deferred tax assets | 60,451 | | Prepaids | 59,442 | | Other assets | 39,531 | | Haircuts on securities | 65,185 | | Total deductions and/or charges | 224,609 | | Net capital | 6,979,175 | | Computation of basic net capital requirement | | | Minimum net capital required | 15,133 | | Excess net capital | \$
6,964,042 | | Computation of aggregate indebtedness
Items included in statement of financial condition: | | | Accrued expenses and other liabilities | \$
226,989 | | Total aggregate indebtedness | \$
226,989 | | Ratio of aggregate indebtedness to net capital | 3.25% | There are no material differences between the preceding computation and the Company's corresponding unaudited FOCUS Part IIA of Form X-17A-5 as of December 31, 2021 filed on January 26, 2022. See accompanying report of independent registered public accounting firm. {16}------------------------------------------------ # **Sabadell Securities USA, Inc. Computation for Determination of Customer Reserve Requirements and PAB Accounts Reserve Requirements and Information for Possession or Control Requirements for Broker-Dealers Under Rule 15c3-3 of the Securities and Exchange Commission December 31, 2021 Schedule II** The Company clears all transactions with and for customers on a fully disclosed basis, and the Company does not otherwise hold funds or securities for, or owe money to customers. The Company claims exemption from the provisions of Rule 15c3-3 pursuant to the provisions of subparagraph (k)(2)(ii). See accompanying report of independent registered public accounting firm. {17}------------------------------------------------ - - ![](_page_17_Picture_13.jpeg) {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) KPMG LLP Brickell City Center, Suite 1200 78 SW 7 Street Miami, FL 33130 ### **Report of Independent Registered Public Accounting Firm** The Board of Directors Sabadell Securities USA, Inc.: We have reviewed management's statements, included in the accompanying Sabadell Securities USA, Inc.'s Exemption Report (the Exemption Report), in which (1) Sabadell Securities USA, Inc. (the Company) identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3(k)(2)(ii), and (2) the Company stated that it met the identified exemption provisions throughout the year ended December 31, 2021 without exception. The Company's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to 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) under the Securities Exchange Act of 1934. February 25, 2022 {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) KPMG LLP Brickell City Center, Suite 1200 78 SW 7 Street Miami, FL 33130 ### **Report of Independent Registered Public Accounting Firm** The Board of Directors Sabadell Securities USA, Inc. In accordance with Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and with the Securities Investor Protection Corporation (SIPC) Series 600 Rules, we have performed the procedures enumerated below with respect to the accompanying General Assessment Reconciliation (Form SIPC-7) of Sabadell Securities USA, Inc. (the Company) for the year ended December 31, 2021.The Company's management is responsible for its Form SIPC-7 and 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 the SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2021. Additionally, the 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. No other parties have agreed to or acknowledged the appropriateness of these procedures for the intended purpose or 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 for the intended purpose is solely the responsibility of those parties specified in this report and we make no representation regarding the sufficiency of the procedures described below either for the intended purpose or for any other purpose. The procedures and the associated findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, and noted no differences; - 2. Compared the Total Revenue amount reported on the Annual Audited Form X-17A-5 Part III for the year ended December 31, 2021, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2021, and noted no difference; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, and noted no differences; and - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related supporting schedules and working papers supporting the adjustments, and noted 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 American Institute of Certified Public Accountants and in accordance with the standards of the Public Company Accounting Oversight Board (United States). {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) 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, 2021. 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. 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 the SIPC and is not intended to be and should not be used by anyone other than these specified parties. ![](_page_20_Picture_4.jpeg) February 25, 2022 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.