# SOFI SECURITIES LLC X-17A-5 (2025-03-03) — Broker-dealer annual report - Company: SOFI SECURITIES LLC - Form: X-17A-5 - Filed: 2025-03-03 - Period: 2024-12-31 - Accession: 0001472443-25-000003 - CIK: 1472443 - File #: 8-68389 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte Touche LLP - Auditor location: San Francisco, CA - Contact: Marshall Hill - Phone: 9047038194 - Website: deloitte.com - Signed by: Marshall Hill (Director and FinOp, Invest Operations) Original filing: https://www.sec.gov/Archives/edgar/data/1472443/000147244325000003/2024_SFS_PUBL_FINAL.pdf --- {0}------------------------------------------------ # SOFI SECURITIES LLC (SEC ID No. 8-68389) Statement of Financial Condition as of the year ended December 31, 2024 and Report of independent registered public accounting firm {1}------------------------------------------------ # TABLE OF CONTENTS | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|--| | Statement of Financial Condition | | | Notes to the Statement of Financial Condition | | {2}------------------------------------------------ Deloitte & Touche LLP 555 Mission Street Suite 1400 San Francisco, CA 94105 USA Tel: +1 415 783 4000 www.deloitte.com # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member and the Board of Directors of SoFi Technologies, Inc.: # Opinion on the Financial Statement We have audited the accompanying statement of financial condition of SoFi Securities LLC (the "Company") as of December 31, 2024, 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, 2024, in conformity with accounting principles generally accepted in the United States of America. ## Basis for Opinion The 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 of the financial statement provides a reasonable basis for our opinion. March 3, 2025 We have served as the Company's auditor since 2019. {3}------------------------------------------------ # SOFI SECURITIES LLC # STATEMENT OF FINANCIAL CONDITION # December 31, 2024 | ASSETS | | |---------------------------------------------|--| | Cash and cash equivalents (Note 2) | | | Cash - segregated under federal regulations | | | Securities owned | | | Prepaid expenses and other assets | | | Due from affiliates (Note 2) | | | Total assets | | | | | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities: | | | Accounts payable and accrued liabilities | | | Payable to brokerage clients | | | Due to affiliates (Note 2) | | | Total liabilities | | | | | | Member's equity | | | Total liabilities and member's equity | | {4}------------------------------------------------ #### SOFI SECURITIES LLC #### NOTES TO THE STATEMENT OF FINANCIAL CONDITION #### December 31, 2024 #### 1. Nature of business and summary of significant accounting policies #### Nature of business SoFi Securities LLC (the "Company") is a broker-dealer registered with the U.S. Securities and Exchange Commission ("SEC") pursuant to section 15(b) of the Securities Exchange Act of 1934, as amended ("the Act") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company's operating a cash management account ("CMA") which is a bank sponsored cash management account program on behalf of our customers"), in addition to facilitating brokerage transactions through our introductory relationship with APEX Clearing Corporation ("Clearing Broker"), as discussed below. The Company is wholly owned by Social Finance, LLC (the "Parent", a wholly owned subsidiary of SoFi Technologies, Inc., a public issuer) and is affiliated with SoFi Wealth"), an investment advisor registered with the SEC; and with SoFi Bank, National Association ("SoFi Bank"), an FDIC insured, nationally chartered bank. All aforementioned affiliates are wholly owned by the Parent. #### Introducing arrangement The Company has a clearing agreement with our Clearing Broker, who executes, clears and settles all customer securities transactions on a fully disclosed basis. Therefore, the Company does not carry or clear customer accounts with respect to this aspect of our business. The Company's agreement with its Clearing Broker provides that the Clearing Broker will make and keep such records of the transactions effected and cleared in the customer as are customarily made and kept by a clearing broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Act. Our Clearing Broker also performs all services customarily performed thereon, including the preparation and distribution of customers' confirmation and statements under the Act and the rules of FINRA of which the Company is a member. #### Self-clearing bank deposit program Through May 31st of the current year, the Company operated a bank sweep program wherein its customers had the ability to place funds on deposit with the Company and then were swept with program banks within the program ("the Bank Sweep Program"), which received regulatory approval from FINRA. The approval obtained removed the exemptive relief provided under subparagraph (k)(2)(ii) of SEC Rule 15c3-3 ("the Customer Protection Rule") thereby making the Company fully subject to the Customer Protection Rule and requiring the Company to hold customer funds-intransit in a special reserve account for the exclusive benefit of customers. SoFi Bank was the primary program bank under this model. Subsequent to May 31st of this year, the Company has provided a CMA program whereby its customers may place funds on deposit with SoFi Bank, N.A. directly. This is a change from the former sweep program as funds no longer pass through the custody of the Company and therefore there are no funds in transit that are required to be placed in a special reserve bank account for the exclusive benefit of customers. SoFi Bank is the sole program bank for this program. An aggregation of customer funds on account are tracked through an account held at SoFi Bank, N.A. for the exclusive benefit of customers that is separate and distinct from any other accounts maintained by the Company with SoFi Bank, N.A. ### Basis of presentation The statement of financial condition has been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). #### Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. {5}------------------------------------------------ ### Cash and cash equivalents Cash includes unrestricted deposits with financial institutions in operating accounts that are subject to credit risk to the extent those balances exceed the applicable Federal Deposit Insurance Corporation limits. Cash equivalents represents a money market fund held with a major financial institution. We consider all highly liquid investments with an original maturity date of three months or less to be cash equivalents. As of December 31, 2024 we held \$57,000,000 in a money market fund with one financial institution. ### Cash - segregated under federal regulations Cash segregated and on deposit for regulatory purposes consists primarily of qualified deposits in a special reserve bank account for the exclusive benefit of customers under the Customer Protection Rule. #### Prepaid expenses and other assets Prepaid expenses and other assets primarily consist of prepaid marketing costs which are expensed when they are earned by the vendor in conjunction with the opening of new CMA accounts and fees receivable from our clearing broker. ### Payable to brokerage clients Payable to brokerage clients represents cash incentive rewards earned by customers that have yet to be applied to the customers account (i.e., paid). The amounts are settled between the customer pursuant to the specific incentive terms. ### Fair value measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a three-level fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three levels are defined as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date. Level 2 - Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or observable inputs other than quoted prices. Level 3 - Unobservable inputs for assets or liabilities for which there is little or no market data, which requires us to develop our own assumptions. These unobservable assumptions reflect estimates of inputs that market participants would use in pricing the asset or liability the asset or liability. A financial instrument's categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's financial instruments measured at fair value on a recurring basis include securities owned, which rely on Level 1 inputs. The market approach to determine the fair value and uses quoted prices in active markets for an identical asset to measure the fair value for Level 1 inputs. Certain carrying amounts of the Company's financial instruments, including cash and cash - segregated under federal regulations, accounts receivable, and accounts payable, approximate fair value due to their short-term nature. During the year we had no Level 3 assets and therefore had no transfers into or out of Level 3. ### Income taxes The Company is a single member limited liability company, which is treated as an entity disregarded as separate from its owner for federal and state income tax purposes, and therefore does not pay income taxes in any jurisdiction. Accordingly, taxable income and losses of the Company are reported in the income tax return of the Parent and no provision for income taxes has been recorded in the accompanying financial statements. The Company, as a single-member LLC, is not allocated income taxes from the Parent because it does not have a tax-sharing agreement. {6}------------------------------------------------ ### Segment reporting In accordance with ASC Topic 280 - Segment Reporting ("ASC 280"), the Company has determined that it has a single operating and reportable segment. #### Recently adopted accounting standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The ASU improves reportable segments and requires a single segment public entity to provide all of the disclosures as required by ASC 280. The standard is effective for fiscal years beginning after December 15, 2023. The Company has adopted ASU 2023-07 effective beginning January 1, 2024. The adoption of this standard did not have any material impact on the Company's financial statements. #### 2. Related-party transactions #### Due from affiliates As of December 31, 2024, the amounts due from affiliates were as follows: | Due from Parent | 665-047 | |---------------------------|---------| | Due from SoFi Bank | 153.423 | | Total due from affiliates | 818.470 | As of December 31, 2024, the Company has a balance due from the Parent of \$655,047, which is comprised of intercompany receivables for interchange volume incentives of \$348,837 and reward point redemptions in broker-dealer products, which were earned through SoFi affiliate products of \$316,210. The revenue pertaining to volume incentives is recorded in interchange fees and the amount pertaining to reward point redemptions does not impact the statement of operations as it represents amounts reimbursable from the parent for payments made to customers on their behalf. Substantially all of our cash management from program banks were earned from SoFi Bank, an affiliated national banking association. As of December 31, 2024, the Company has a balance due from SoFi Bank of \$153,423 related to cash management fees net of certain expenses associated with the Bank Sweep Program. ### Due to affiliates The Company has a Banking Services Agreement with SoFi Bank, that provides consumer banking services and products. Under the Banking Services Agreement ("BSA"), SoFi Bank has the right to request repayment for the direct costs incurred to provide these services. These transactions are subject to Section 23B of the Federal Reserve Act which requires periodic management evaluation to ensure fees charged to affiliates are on comparable terms with those that would be charged to non-affiliates for similar services. The Company and its Parent, pursuant to a Management Services Agreement ("MSA"), agreed that the Parent will assume responsibility for certain indirect operating expenses incurred by the Company in accordance with FINRA Notice to Members 03-63 (the "Notice"). Consistent with the Notice, the Company maintains a schedule of unallocated indirect operating expenses paid for by the Parent on behalf of the Company. As of December 31, 2024, the Company has a combined amount due to SoFi Bank and the Parent under the BSA and MSA of \$121,651, which is presented within due to affiliates on the statement of financial condition. #### Other related party disclosures The Company has an operating account in its name with SoFi Bank to facilitate banking services. The operating account shall be used to settle day to day operating activities such as accrued interest on customer balances, interchange fees, and any negative balances related to customer's accounts as outlined in the Banking Services Agreement. The operating account is subject to SoFi Bank's standard deposit and is presented within Cash and cash equivalents on the statement of financial condition in the amount of \$7,518,066. Executives, directors, and all employees of SoFi Technologies, Inc. may apply for the Company's products. All such transactions by related persons were made in the ordinary course of business and offered with consistent terms available to third parties. {7}------------------------------------------------ #### 3. Off balance sheet transactions As discussed in footnote 1, the Company maintains a bank deposit program banks and subsequent to May 31st of this year, solely with SoFi Bank. As of December 31, 2024 the total amount of customer funds held at SoFi Bank was \$117,972,421. #### 4. Regulatory requirements The Company is subject to the SEC's Uniform Net Capital Rule ("Exchange Act Rule 15c3-1"), which requires the maintenance of minimum net capital. The Company elected to use the alternative method, permitted by Exchange Act Rule 15c3-1, which requires that the Company maintain net capital equal to the greater of \$250,000 or 2% of aggregate debit items. These regulations also prohibit a broker-dealer from repaying subordinated borrowings, making loans to its parent, affiliates or employees, or otherwise entering into transactions which would result in a reduction of its total net capital to less than 150% of its required minimum capital. The Company did not execute any of these transactions during 2024. Moreover, broker-dealers are required to notify the SEC and other regulators prior to repaying subordinated borrowings, paying dividends and making loans to its parent, affiliates or employees, or otherwise entering into transactions, which, if executed, would result in a reduction of 10% or more of its excess net capital (net capital less minimum requirement). The SEC and FINRA have the ability to prohibit or restrict such transactions if the result is detrimental to the financial integrity of the broker-dealer. As of December 31, 2024, the Company had net capital of \$68,938,135, which was in excess of its required net capital. The Company is also subject to the SEC Customer Protection Rule (SEC Rule 15c3-3), which requires the Company to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of customers. Amounts included within Cash - segregated under federal regulations in the statement of financial condition represent actual balances on deposit. Cash required to be segregated and on deposit for regulatory purposes at December 31, 2024 totaled \$924,916 and the balance in the reserve account was \$1,997,032. On January 3, 2025, the Company deposited \$500,000 into its segregated reserve bank account #### い Concentrations of credit risk The Company is engaged in various trading and brokerage activities in which counterparties primarily include brokerdealers, banks and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. #### 6. Commitments and contingencies ### Indemnifications In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. ### Legal contingency settlement In 2024, the Company and FINRA agreed to a settlement related to a FINRA Cause Examination from 2019. As a result, the Company paid a monetary sanction in the amount of \$1,100,000 upon notice that the Acceptance, Waiver and Consent (AWC) was accepted by FINRA on May 2, 2024. This amount had been previously accrued for in 2023. #### 7. Segment reporting The Company consists of a single operating and reportable segment that comprises the entire entity. The accounting policies of the segment are the same as those described in Note 1. The Company's President is its chief operating decision maker ("CODM"). The CODM reviews the Company's net income to allocate resources and assess performance. The CODM reviews the significant expense categories as presented on the statement of operations. Additionally, the CODM uses excess {8}------------------------------------------------ net capital (see Note 4), which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy. #### 8. Subsequent events The Company evaluated events through March 3, 2025, the date that the financial statement was available to be issued, and determined that there were no subsequent events requiring adjustment or disclosure in the financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.