# MCP SECURITIES, LLC X-17A-5 (2020-03-10) — Broker-dealer annual report - Company: MCP SECURITIES, LLC - Form: X-17A-5 - Filed: 2020-03-10 - Period: 2019-12-31 - Accession: 0001479459-20-000002 - CIK: 1479459 - File #: 8-68473 - Material weakness: No - Auditor: OHAB AND COMPANY, P.A. - Auditor location: MAITLAND, GA - Contact: JILL RECKAMP - Phone: 239-810-9646 - Signed by: JILL RECKAMP (FINOP/CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1479459/000147945920000002/auditmcpsecurities.pdf --- {0}------------------------------------------------ UNITED Sf A TES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ...... 12.00 ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | SEC FILE NUMBER | |-----------------| | S-68473 | **FACING PAGE** Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING 01/01/2019 | | | | | |-----------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | MM/0D/YY | | ----------
MM/0D/YY | | | | | | | | | | | | OFFICIAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | FIRM I.D. NO. | | | | | | | | | | NY | | 10017 | | | | (State) | | (Zip Code) | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
JILL RECKAMP | | | | | | | | (Area Code-Telephone Number) | | | | | | | | | | | | | | | | | FL | 32751 | | | | (City) | (State) | (Zip Code) | | | | | | | | | | | NAME OF BROKER-DEALER: MCP SECURITIES, LLC
777 THIRD AVENUE, 25TH FLOOR
(No. and Street)
100 E SYBELIAAVE, STE 130 MAITLAND | AND ENDING 12/31/2019
A. REGISTRANT IDENTIFICATION
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
(Name- if individual, state last,first, middle name)
Accountant not resident in United States or any of its possessions.
FOR OFFICIAL USE ONLY | | | *\*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 form are not required to respond unless the form displays a currently valid 0MB control number.** SEC 1410 (06-02) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, JILL RECKAMP | | | , swear (or affirm) that, to the best of | |----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | MCP SECURITIES, LLC | my knowledge and belief the accompanying financial statement and supporting schedu | | les pertaining to the firm of
--------------------------------------------, | | of DECEMBER 31 | | 20 19 | as
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 fo | llows: | | | ;£--""'--"--'--'#-1,-
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This report ** contai ns (check all applicable boxes):
✓ (b) Statement of Financial Condition.
✓ (c) Statement of Income (Loss).
✓ (d) Statement of Changes in Financial Condition.
✓ (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
✓ (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
✓ (g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule l 5c3-3. | • •• 'i\$-,, •
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[2] G) | Information Relating to the Possession or Control Requirements Under Ru le I 5c3-3. | | A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule I 5c3-
I and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | | consolidation. | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Cond | | ition with respect to methods of | | [Z] (I) An Oath or Affirmation. | 0 (m) A copy of the SIPC Supplemental Report. | | | | | | | 0 (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. ! 7a-5(e)(3).* {2}------------------------------------------------ ## MCP SECURITIES, LLC FINANCIAL STATEMENTS AND SCHEDULES December 31, 2019 With Report of Registered Public Accounting Firm {3}------------------------------------------------ ## **MCP SECURITIES, LLC Financial Statements for the Year Ended December 31, 2019 Table of Contents** | Report of Independent Registered Public Accounting Firm | 1 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------|-----| | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Subordinated Liabilities | 5 | | Statement of Cash Flows | 6 | | Notes to Financial Statements | 7-9 | | Supplementary Schedule I -
Computation of Net Capital Under Rule 15c3-1 of the Securities
and Exchange Commission Act of 1934 and Aggregate Indebtedness | 10 | | Supplementary Schedule II -
Computation for Determination of Reserve Requirements | 11 | | Supplementary Schedule Ill -
Information Relating to the Possession or Control Requirements | 11 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 100 E. Sybelia Ave. Suite 130 Maitland, FL 32751 *Certified Public Acco1111ta111s* Email: pam@ohabco.com Telephone 407-740-7311 Fax 407-740-6441 #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Member's of MCP Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of MCP Securities, LLC as of December 31, 2019, the related statements of operations, changes in member's equity, statement of subordinated liabilities, 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 MCP Securities, LLC as of Decemb~r 31, 2019, 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 MCP Securities, LLC's management. Our responsibility is to express an opinion on MCP 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 MCP 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 Schedules I, II and Ill (see page numbers 10 & 11) have been subjected to audit procedures performed in conjunction with the audit of MCP Securities, LLC's financial statements. The supplemental information is the responsibility of MCP 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 Schedules I, II and Ill are fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as MCP Securities, LLC's auditor since 2016. Maitland, Florida March 7, 2020 {5}------------------------------------------------ ## **MCP SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION As of December 31, 2019** #### ASSETS | Cash
Accounts receivable
Property and equipment, at cost, less accumulated
depreciation and amortization of \$11,896
Right of use asset
Prepaid expenses and other assets | \$
1,422,762
1,795,074
38,648
845,656
125,729 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------| | Total assets | \$
4,227,869 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities | | | Accounts payable and accrued expenses | \$
496,901 | | Lease liability | 854,614 | | Subordinated loan
Subordinated loan accrued interest | 200,000
7,140 | | | | | Total liabilities | 1,558,655 | | Member's equity | 2,669,214 | | Total liabilities and member's equity | \$
4,227,869 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ ## **MCP SECURITIES, LLC STATEMENT OF OPERATIONS For the Year Ended December 31, 2019** | REVENUES | | |---------------------------|------------------| | Investment banking fees | \$
61,920,434 | | Placement fees | 426,000 | | Advisory fees | 257,500 | | Interest income | 192,611 | | Other income | 52,422 | | Total revenues | 62,848,967 | | | | | EXPENSES | | | Compensation and benefits | 62,328,569 | | Communications | 12,463 | | Interest expense | 4,760 | | Professional fees | 192,340 | | Occupancy | 195,997 | | Regulatory fees | 72,887 | | Technology | 79,317 | | Other operating expenses | 270,330 | | Total expenses | 63,156,663 | | | | | NET INCOME (LOSS) | \$
(307,696) | The accompanying notes are an integral part of these financial statements. {7}------------------------------------------------ ## **MCP SECURITIES, LLC STATEMENT OF CHANGES IN MEMBER'S EQUITY For the Year Ended December 31, 2019** | Balance, December 31, 2018 | \$ 3,496,910 | |----------------------------|--------------| | Member's Distributions | (520,000) | | Net Income (Loss) | (307,696) | | Balance, December 31, 2019 | \$ 2,669,214 | The accompanying notes are an integral part of these financial statements. 4 {8}------------------------------------------------ ## **MCP SECURITIES, LLC STATEMENT OF CHANGES IN SUBORDINATED LIABILITIES For the Year Ended December 31, 2019** Balance, December 31, 2018 \$ 200,000 Balance, December 31, 2019 \$ 200,000 The accompanying notes are an integral part of these financial statements. 5 {9}------------------------------------------------ ## **MCP SECURITIES, LLC STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019** | CASH FLOWS FROM OPERATING ACTIVITIES: | | |--------------------------------------------------------------------------------------|-----------------| | Net income (loss) | \$
(307,696) | | Adjustments to reconcile net income (loss) to net cash used by operating activities: | | | Depreciation and amortization | 5,904 | | Changes in operating assets and liabilities | | | Accounts receivable | 1,547,609 | | Right of use asset | (845,656) | | Prepaid expenses and other assets | (2,638) | | Accounts payable and accrued liabilities | 445,410 | | Lease liability | 793,622 | | Net cash used by operating activities | 1,636,555 | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | Purchase of fixed assets | (27,268) | | Net cash used in investing activities | (27,268) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | Subordinated Loan | | | Member's Contributions | | | Member's Distributions | (520,000) | | Net cash provided by financing activities | (520,000) | | NET CHANGE IN CASH | 1,089,287 | | | | | CASH: | | | Beginning of period | 333,475 | | End of period | \$ 1,422,762 | The accompanying notes are an integral part of these financial statements. {10}------------------------------------------------ #### **MCP SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2019** NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **Organization and Description of Business:** MCP Securities, LLC (the "Company"), a Delaware Limited Liability Company organized in December 2009, is a securities broker-dealer registered with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA"). The Company is a wholly owned subsidiary of Mccarvill Capital Partners, LLC ("Member'). The Member purchased the Company in April 2016. The Company's primary purpose is to provide funding for private placement of securities. **Basis of Presentation:** The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of Amercia. **Income Taxes:** As a single member limited liability company, the Comany is a disregarded entity for federal income tax purposes. Income taxes are, therefore, the responsibility of the Member of the Company. The Company has adopted the provisions of FASB Accounting Standards Codification 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity's status, including its status as a pass-through entity, and the decision not to file a tax return. The Company is subject to New York City taxes. The Company has evaluated each of its tax positions and has determined that no provision or liability for income taxes is necessary. The member and the Company are generally not subject to U.S. federal, state, or local income tax examinations related to the Company's activities for tax years before 2014. #### **Revenue from Contracts with Customers:** *Significant Judgements* Revenue from contracts with customers include investment banking fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgement 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; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events. **M&A advisory fees.** The Company provides advisory services on mergers and acquisitions (M&A). Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled. **However, for certain contracts, revenue is recognized over time for advisory arrangements in which** the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgement is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. At December 31, 2019, all amounts were immaterial. {11}------------------------------------------------ ## **MCP SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2019** ## NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) **Estimates:** Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. **Cash and Cash Equivalents:** For the purposes of reporting the statement of cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash balances in excess of FDIC and similar insurance coverage are subject to the usual banking risks associated with funds in excess of those limits. The Company maintains its bank accounts at a high credit quality bank in the United States. Balances, at times may exceed federally insured limits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. **Accounts Receivables:** Accounts receivable consist of trade receivables for the private placement of securities. The Company regularly reviews its accounts receivable for any bad debts. The review for bad debts is based on an analysis of the Company's collection experience, customer worthiness, and current economic trends. At December 31, 2019 the Company did not have an allowance for doubtful accounts as all receivable amounts are deemed to be fully collectible. **Property and Equipment:** Property and equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the asset which is estimated to be five years. Depreciation expense for the year ended December 31, 2019 equaled \$5,904. ## NOTE B - NET CAPITAL AND AGGREGATE INDEBTEDNESS REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2019, the Company had net capital of \$909,763, which was \$875,563 more than its required net capital of \$34,200 and the ratio of aggregate indebtedness to net capital was .56 to 1.0. 8 {12}------------------------------------------------ #### **MCP SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December 31, 2019** #### NOTE C - COMMITMENTS AND CONTINGENCIES The Company does not have any commitments or contingencies, other than lease (Note F). #### NOTED - BUSINESS CONCENTRATIONS The Company earned revenue from three major customers that accounted for 98% of revenue earned for the year ended December 31, 2019. #### NOTE E - LEASES The Company has obligations as a lessee for office space with initial noncancelable terms in excess of one year. The Company classified this lease as an operating lease. These leases generally contain renewal options for periods ranging from two to five years. Because the Company is not reasonably certain to exercise these renewal options, the optional periods are not included in determining the lease term, and associated payments under these renewal options are excluded from lease payments. The Company's lease does not included termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus, for Company's lease, variable payments. The Company's office space leases require it to make variable payments for the Company's proportionate share of the building;s property **taxes, insurance, and common area maintenance. These variable lease payments are not included** in lease payments used to determine lease liability and are recognized as variable costs when **incurred.** Amounts reported in the balance sheet as of December 31, 2019 were as follows: Operating leases: | Operating lease ROU asset | \$
845,656 | |---------------------------|---------------| | Operating lease liability | \$
854,614 | Rent paid under this lease agreement was \$249,394 for year ended December 31, 2019. Future minimum rental payments under the office premises leases are the following: | 2020 | \$
253,963 | |-------|---------------| | 2021 | 258,810 | | 2022 | 263,754 | | 2023 | 178,062 | | Total | \$
954,589 | NOTE F - PROPERTY AND EQUIPMENT A summary of the cost and accumulated depreciation of premises and equipment follows: | December 31, 2019 | | |--------------------------------|--------------| | Computer equipment and website | \$
50,544 | | Accumulated depreciation | (11,896) | | Property and equipment, net | \$
38,648 | Depreciation expense for the year ended December 31, 2019 amounted to \$5,904. #### NOTE G - SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date which the financial statements were available to be issued, and has determined that the Company had no events occurring subsequent to December 31, 2019 requiring disclosure. {13}------------------------------------------------ ## MCP SECURITIES, LLC Supplementary Information Pursuant to rule 17(a)-5 of the Securities Exchange Act of 1934 December 31, 2019 {14}------------------------------------------------ ## **MCP SECURITIES, LLC** ## **SCHEDULE** I **COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION ACT OF 1934 AND AGGREGATE INDEBTEDNESS** #### **December 31, 2019** | Net Capital | | |-------------------------------------------------------------------------------------------------------------------------------------|-----------------| | Total member's equity qualified for net capital
Additions: | \$
2,669,214 | | Subordinated loans | 200,000 | | Deduction for non-allowable assets: | | | Accounts receivable -
non-allowable | (1,795,074) | | Property and equipment | (38,648) | | Prepaid expenses | (125,729) | | Net capital | \$
909,763 | | Minimum net capital required (greater than \$5,000 or 6 2/3% of aggregate | | | indebtedness) | \$
34,200 | | | | | Aggregate Indebtedness: | | | Liabilities, net of subordinated loan | \$
512,999 | | Minimum net capital based on aggregate indebtedness | \$
34,200 | | Ratio of aggregate indebtedness to net capital | .56 to 1.0 | | Excess net capital | \$
875,563 | | | | | RECONCILIATION WITH COMPANY'S COMPUTATION OF NET CAPITAL INCLUDED IN PART IIA
OF UNAUDITED FORM X-17A-5 AS OF DECEMBER 31, 2019. | | | Net capital as reported in Part IIA of Form X-17a-5 | \$
881,280 | | To reduce right of use asset and lease liability | 28,483 | | Net capital as reported above | \$
909,763 | | | | {15}------------------------------------------------ ## **MCP SECURITIES, LLC** ## **SCHEDULE** II **COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2019** The Company is not required to file the above schedule as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(i) of the rule and does not hold customers' monies or securities. ## **SCHEDULE** Ill **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2019** The Company is not required to file the above schedule as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(i) of the rule and does not hold customers' monies or securities. {16}------------------------------------------------ **hab and Conipany, P.A.** 100 E. Sybelia Ave. Suite 130 Maitland, FL 32751 *Certified Public Accountants* Email: pam@ohabco.com Telephone 407-740-73 l l Fax 407-740-6441 #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Member's of MCP Securities, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) MCP Securities, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which MCP Securities, LLC claimed an ex~mption from 17 C.F.R. §240.15c3-3: (2)(i) (exemption provisions) and (2) MCP Securities, LLC stated that MCP Securities, LLC met the identified exemption provisions throughout the most recent fiscal yea~ without exception. MCP Securities, LLC'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 MCP Securities, LLC'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) (i) of Rule 15.c3-3 under the Securities Exchange Act of 1934. ~.J ~.,~ Maitland, Florida March 7, 2020 {17}------------------------------------------------ # **MCP Sec.urities** March 2, 2020 Ohab and Company, P.A. 100 E. Sybelia Ave. Ste 130 Maitland, FL 32751 Attn: Pamela Ohab MCP Securities (the "Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the Securities and Exchange Commission (l 7C.F.R. 240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17C.F.R. 240.17a-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 l 7C.F .R. §240. l 5c3-3 under the following provisions of l 7C.F .R. §240. l 5c3-3(k)(2)(i): - (2) The Company met the identified exemption provisions in 17C.F .R. §240.15c3-3(k)(2)(i) throughout the most recent fiscal year without exception. I, Jill Reckamp affirm that, to the best of my knowledge and belief, this Exemption report is true and correct. Title: CFO/FINOP Date: March 2, 2020 MCP Securities, LLC Member FINRA/SIPC {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) 100 E. Sybelia Ave. Suite 130 *Certified Public Accountants* Telephone 407-740-7311 Maitland, FL 32751 Email: pam@ohabco.com Fax 407-740-6441 **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED UPON PROCEDURES** Board of Directors MCP Securities, LLC We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules and related supplemental guidance, which are enumerated below, and were agreed to by MCP Securities, LLC and the SIPC, solely to assist you and SIPC in evaluating MCP Securities, LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2019. MCP Securities, LLC's management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31, 2019, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2019 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 no differences; and - 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 not engaged to, and did not conduct an examination or a review, the objective of which would be the expression of an opinion or conclusion, respectively, MCP Securities, LLC's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2019. 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. This report is intended solely for the information and use of the MCP Securities, LLC and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. ~ ~ ~ t *{'(!--* Ohab and Company, PA Maitland, Florida March 7, 2020 {19}------------------------------------------------ | SIPC-7 | |---------------| | (35-REV 6/17) | SECURITIES INVESTOR PROTECTION CORPORATION P.O. Box 92185 Washing1on, D.C. 20090-2185 202-371- 8300 **General Assessment Reconciliation** **SIPC-7** (35-REV 6/17) For the fiscal year ended 1213112019 \_\_ \_ (Read carefully the instructions in your Working Copy before completing this Form) #### **TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS** 1. Name of Member, address, Designated Examining Authority, 1934 Act reg istration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: | | | I 068473
FINRA
MCP SECURITIES LLC
777 THIRD AVENUE, 25TH FLOOR
NEW YORK, NY 10017
L | DEC | 7
_J | indicate on the form filed . | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
Name and telephone number of person to
contact respecting this form.
JILL RECKAMP 678-679-8639 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|--------------------|------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | 2. A. General Assessment (item 2e from page 2) | | | | \$94,204.60 | | | | B. Less payment made with SIPC-6 filed (exclude interest)
08/06/2019 | | | | ( 15,158.08 | | | | Date Paid | | | | | | | | C. Less prior overpayment applied | | | | | | | | D. Assessment balance due or (overpayment) | | | | 79,046.52 | | | | E. Interest computed on late payment (see instruction E) for ______ days at 20% per annum | | | | 0 | | | F. | Total assessment balance and interest due (or overpayment carried forward) | | | | \$79,046.52 | | | | ~
G. PAYMENT:
✓ the box
Check mailed to P.O. Box
Total (must be same as Fa ove) | r71
Funds Wiredl.tJ | \$_7_9_,0_4_6_.5_2 | _____
_ | | | | | H. Ov erpayment carri ed forward | | _______
\$( | _ | | | | | 3. Subsidiaries (S) and predecess ors (P) included in this form (give name and 1934 Act registration number): | | | | | | The SIPC member submitting this form and the
person by whom it is executed represent ther eby
that all information contained herein is true, correct
and complete. | | | (Name of C | | MCP SECURITIES LLC | | | | | | | | | | | --
20 20 ,
Dated the 10
day of MARCH | | | Fl NOP/CFO | | | | | | | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | | (Title) | | | | cc Dates: | | | | | |---------------|------------------|-------------------------------|----------|----------------|--------------| | LU
:s:: | | Postmarked | Received | Reviewed | | | LU
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LU | Calculations | | | Docum entation | Forward Copy | | cc | c.:» Exceptions: | | | | | | c | | en Disposition of exceptions: | | | | {20}------------------------------------------------ ## **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period beginning JANUARY 1,2019 and ending DEcEMBER,1. 2019 | Item No.
2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | Eliminate cents
\$62,848,967 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------| | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | (2) Net loss from principal transactions in securities in trading accounts. | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | (4) Interest and dividend expense deducted in determining item 2a. | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit 1rom management of or participation in underwriting or distribution o1 secu rities. | | | (7) Net loss from securities in investment accounts. | | | Total additions | | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company 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. | | | (2) Revenues from commodity transactions. | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transact ions. | | | (4) Reimbursements for postage in connection with proxy solicitation. | | | (5) Net gain from securities in investment accounts. | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | (B) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | REIMBURSED EXPENSES | 45,898 | | (Deductions in excess of \$100,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
__________
Code 4075 plus line 2b(4) above) but not in excess
\$
_
of total interest and dividend income. | | | __________
(ii) 40% of margin interest earned on customers securities
\$
_
accounts (40% of FOCUS line 5, Code 3960). | | | Enter the greater of line (i) or (ii) | | | Total deductions | 45,898 | | 2d. SIPC Net Operating Revenues | \$ 62,803,069 | | Rate effective 1/1/2017
2e. General Assessment @ .001 5 | \$94,204.60 | | | (to page f, line 2.A.) | {21}------------------------------------------------ ## SIPC-7 Instructions This form is to be filed by all members of the Securities Investor Protection Corporation whose fiscal years end in 2011 and annually thereafter. The form together with the payment is due no later than 60 days after the end of the fiscal year, or after membership termination. Amounts reported herein must be readily reconcilable with the member's records and the Securities and Exchange Commission Rule 17a-5 report filed. Questions pertaining to this form should be directed to SIPC via e-mail at form@sipc.org or by telephoning 202-371-8300. A. For the purposes of this form, the 1erm "SIPC Ne1 Operating Revenues" shall mean gross revenues from the securities business as detined in or pursuant lo the applicable sections of 1he Securities Investor Pro1ec1ion Ac1 of 1970 ("Act") and Article 6 of SI PC's bylaws (see page 4). less i1em 2c(9) on page 2. B. Gross revenues of subsidiaries, except foreign subsidiaries, are required lo be included in SIPC Ne1 Operating Revenues on a consolidated basis except 1or a subsidiary filing separately as explained hereina11er. 11 a subsidiary was required lo 1ile a Rule 17a-5 annual audited s1a1emen1 of income separately and is also a SIPC member, 1hen such subsidiary must itself file SIPC-7, pay the assessment, and should not be consolidated in your SIPC-7. SIPC Ne1 Operating Revenues of a predecessor member which are no1 included in item 2a, were no1 reported separately and the SIPC assessments were no1 paid thereon by such predecessor, shall be included in i1em 2b(1). C. Your General Assessment should be computed as follows: - (1) I ;ne ?a For the applicable period enter total revenue based upon amounts reported in your Rule 17a-5 Annual Audited Statement of Income prepared in conformity with generally accepted accounting principles applicable to securities brokers and dealers. or if exempted from that rule, use X-17A-5 (FOCUS Report) Line 12, Code 4030. - (2) AdJ11stments The purpose of 1he ad1us1men1s on page 2 is lo determine SIPC Ne1 Operating Revenues. - (ai *Mdiliaas* Lines 2b(1) through 2b(7) assure 1hat assessable income and gain items of SIPC Ne1 Operating Revenues are 1o1aled, unreduced by any losses (e.g., if a net loss was incurred for 1he period from all transactions in trading account securities, 1ha1 ne1 loss does not reduce other assessable revenues). Thus, line 2b(4) would include all short dividend and interest payments including those incurred in reverse conversion accounts, rebates on stock loan positions and repo interest which have been netted in determining line 2(a). - (b) Deductions Line 2c(1) 1hrough line 2c(9) are either provided for in 1he s1a1ue, as in deduction 2c(1), or are allowed lo arrive al an assessment base consisting of net operating revenues from 1he securities business, For example, line 2c(9) allows for a deduc1ion of either 1he 1o1al of in1eres1 and dividend expense (no1 lo exceed in1eres1 and dividend income), as reported on FOCUS line 22/PART IIA line 13 (Code 4075), plus line 2b(4) or 40% of in1eres1 earned on customers' securities accounts (40% of FOCUS Line 5 Code 3960). Be cer1ain 1o comple1e bo1h line (i) and (ii), en1ering 1he grea1er of 1he 1wo in 1he far righ1 column. Dividends paid 1o shareholders are no1 considered "Expense" and 1hus are no1 lo be included in 1he deduc1ion. Likewise, in1eres1 and dividends paid 1o par1ners pursuan1 lo 1he partnership agreemen1s would also no1 be deducted. If the amount reported on !me 2c /8) aggregates to \$100,000 or greater, supporllng documentation must accompany the form that identifies these deductions. Exampies of support information *include, contractual agreements, prospectuses,* and limited partnership documentation. - (i) Determine your SIPC Ne1 Operating Revenues, i1em 2d, by adding lo i1em 2a, the 1o1al of item 2b, and deducting the total o1 i1em 2c. - (ii) Multiply SIPC Net Operating Revenues by the applicable rate. Enter the resulting amount in i1em 2e and on line 2A of page 1. - (iii) Enter on line 2B 1he assessment due as reflected on the SIPC-6 previously filed. - (iv) Subtract line 2B and 2C 1rom line 2A and enter the difference on line 2D. This is the balance due for the period. - (v) Enter interest computed on la1e payment (i1 applicable) on line 2E. - (vi) Enter 1he total due on line 2F and the payment of the amount due on line 2G. - (vii) Enter overpayment carried forward (if any) on line 2H. D. Any SIPC member which is also a bank (as defined in the Securities Exchange Ac1 011934) may exclude from SIPC Ne1 Operating Revenues dividends and in1eres1 received on securities in its investment accounts to the extent 1hat it can demonstrate to SIPC's satisfaction 1ha1 such securities are held, and such dividends and interest are received, solely in connection with its operations as a bank and not in connection with i1s operations as a broker, dealer or member of a national securities exchange. Any member who excludes 1rom SIPC Ne1 Operating Revenues any dividends or in1eres1 pursuant to the preceding sentence shall file wi1h 1his form a supplementary s1a1ement setting forth the amount so excluded and proo1 o1 its en1i11emen1 to such exclusion. E Interest on Assessments If all or any par1 oi assessment payable under Section 4 o11he Act has not been postmarked within 15 days a11er 1he due dale thereof, 1he member shall pay, in addition to 1he amount of the assessment, interest al the rate of 20% per annum on the unpaid portion of 1he assessmen11or each day it has been overdue. F. Securities and Exchange Commission Rule 17a-5(e) (4) requires those who are not exempted from the audit requirement o1 the rule and whose gross revenues are in excess of \$500,000 lo file a supplemental independent public accountants report covering 1his SIPC-7 no later than 60 days after their fiscal year ends. **Mail this completed form to SIPC together with a check for the amount due, made payable to SIPC, using the enclosed return PO BOX envelope or wire the payment lo: Bank Name: Citibank, New York Swill: CITI US33 ABA#: 021000089 Account Number: 30801482 Address: 111 Wall Street. New York, New York 10043 USA On the wire identify the riame of the firm and its SEC Registration 8-# and label it as "for assessment." Please fax a copy of the assessment form lo (202)-371-6728 or e-mail a copy lo form@sipc.org on the same day as the** wire. {22}------------------------------------------------ ## **From Section 16(9) of the Act:** The term "gross revenues from the securities business" means the sum of (but without duplication)- (Ai commissions earned in connection with transactions in securities effected for customers as agent (net of commissions paid to other brokers and dealers in connection with such transactions) and markups with respect to purchases or sales of securities as principal: (Bl charges for executing or clearing transactions in securities for other brokers and dealers: (CJ the net realized gain, if any, from principal transactions in securities in trading accounts; (Di the net profit, if any, from the management of or participation in the underwriting or distribution of securities: (El interest earned on customers' securities accounts: (F) fees for investment advisory services (except when rendered to one or more registered investment companies or insurance company separate accounts) or account supervision with respect to securities; (G) fees for the solicitation of proxies with respect to, or tenders or exchanges of, securities; (Hi income from service charges or other surcharges with respect to securities: (Ii except as otherwise provided by rule of the Commission, dividends and interest received on securities in investment accounts of the broker or dealer; (J) fees in connection with put, call. and other options transactions in securities; (K) commissions earned for transactions in (i) certificates of deposit, and (ii) Treasury bills. bankers acceptances, or commercial paper which have a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof, the maturity of which is likewise limited, except that SIPC shall by bylaw include in the aggregate of gross revenues only an appropriate percentage of such commissions based on SI PC's loss experience with respect to such instruments over at least the preceding five years; and (L) fees and other income from such other categories of the securities business as SIPC shall provide by bylaw. Such term includes revenues earned by a broker or dealer in connection with a transaction in the portfolio margining account of a customer carried as securities accounts pursuant to a portfolio margining program approved by the Commission. Such term does not include revenues received by a broker or dealer in connection with the distribution of shares of a registered open end investment company or unit investment trust or revenues derived by a broker or dealer from the sales of variable annuities, the business of insurance, or transactions in security futures products, ## **From Section 16(14) of the Act:** The term "Security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, any collateral trust certificate, preorganization certificate or subscription, transferable share, voting trust certificate, certificate of deposit, certificate of deposit for a security, or any security future as that term is defined in section 78c(a)(55)(A) of this title, any investment contract or certificate of interest or participation in any profit-sharing agreement or in any oil, gas or mineral royalty or lease (if such investment contract or interest is the subject of a registration statement with the Commission pursuant to the provisions of the Securities Act of 1933 [15 U,S,C. 77a et seq.]), any put, call, straddle, option, or privilege on any security, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase or sell any of the foregoing, and any other instrument commonly known as a security. Except as specifically provided above, the term "security" does not include any currency, or any commodity or related contract or futures contract, or any warrant or right to subscribe to or purchase or sell any of the foregoing. ## **From SIPC Bylaw Article 6 (Assessments): Section 1(1):** The term "gross revenues from the securities business" includes the revenues in the definition of gross revenues from the securities business set forth in the applicable sections of the Act. ## **Section 3:** For purpose of this article: (a) The term "securities in trading accounts" shall mean securities held for sale in the ordinary course of business and not identified as having been held for investment. (b) The term "securities in investment accounts" shall mean securities that are clearly identified as having been acquired for investment in accordance with provisions of the Internal Revenue Code applicable to dealers in securities. (c) The term "fees and other income from such other categories of the securities business" shall mean all revenue related either directly or indirectly to the securities business except revenue included in Section 16(9)(A)-(L) and revenue specifically excepted in Section 4(c)(3)(C)[ltem 2c(1), page 2], ;.Jot,J 'f l~,J a ;;our;: cf m;;;,css;;;eci: c;;11c;;,cc: or; ,I;ie 2e ;if SIPC- 7 Is alorg wI1I, ·I,e S•f'(,.7 form ·o Slf'C a~c pay 11e 2~a;IeI amc·.1~1. 1:1cF1 ~12 c: '% cf "qross rc;·;ecILies :r:im 11°'•3 ;;ecL;;ItIes t-us;;rnss' m; c:,JfI;ie,:J flocve yoL; cca;r n;:im,t tr;flt ,:fllc;Jlat;oci 'O '8'/'8\V ty )'C'.1I Exam,r·i-,g /\·.1ti'Jll'.J ai-,d IJ)' Sl"C S.:.i.1.G \_\_ ExaG..L:JJJl[;.l\,;J\_;\_t;;JJ:;L.e.s.. | ASE | Ai::c:I::c.r: SIJCK | | Fl!·J~/l. | FIri!FICI(!: '~(l'.J\);ry Rq1,lalory /l,Jl~Jr,;y | |-----|------------------------------------------|---|-----------|--------------------------------------------------| | | 2-l'·cagc, Bowd Op:•ons
:~coIpoIlited | | r•;ysc: | Arca. Inc | | | Cl~.8agJ Steck bc%rge, :rcc:pJra:ec | 4 | | NAS~L'\W y,1x l">--il\ | | | | | | | SIPC- Sc;,;1,,I1I,J;; lil'ds:or ;:,rc:,cc:Ior; C-orporat;oci Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.