# MAREX CAPITAL MARKETS INC. X-17A-5 (2024-03-01) — Broker-dealer annual report - Company: MAREX CAPITAL MARKETS INC. - Form: X-17A-5 - Filed: 2024-03-01 - Period: 2023-12-31 - Accession: 0001540527-24-000007 - CIK: 1540527 - File #: 8-69039 - Type: Broker-dealer - Material weakness: Yes - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Chris Bates - Phone: 212-844-3693 - Email: cbates@marex.com - Website: marex.com - Signed by: Ram Vittal (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1540527/000154052724000007/MarexSOFC2023.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) # Statement of Financial Condition Marex Capital Markets Inc. December 31, 2023 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ Statement of Financial Condition December 31, 2023 #### Contents | Oath or Affirmation | | |---------------------------------------------------------|--| | Report of Independent Registered Public Accounting Firm | | | Statement of Financial Condition | | | Notes to Statement of Financial Condition | | {2}------------------------------------------------ Oath or Affirmation | | | | OMB APPROVAL | | | | | | | |-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|-------------------------------------------------|--|--|--|--|--|--| | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION | | OMB Number: 3235-0123
Expires: Nov. 30, 2026 | | | | | | | | | Washington, D.C. 20549 | | Estimated average burden | | | | | | | | | | | hours per response: 12 | | | | | | | | | ANNUAL REPORTS | | SEC FILE NUMBER | | | | | | | | | FORM X-17A-5 | | 8-69039 | | | | | | | | | PART III | | | | | | | | | | | FACING PAGE | | | | | | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | | | | | | | | | FILING FOR THE PERIOD BEGINNING 10/01/2022 AND ENDING 12/31/2023 | | | | | | | | | | | MM/DD/YY | | MM/DD/YY | | | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | | NAME OF FIRM: Marex Capital Markets Inc. | | | | | | | | | | | | | | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer | | | _ Major security-based swap participant | | | | | | | | Check here if respondent is also an OTC derivatives dealer | | | | | | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | | | 140 East 45th Street, 10th Floor | | | | | | | | | | | | (No. and Street) | | | | | | | | | | New York | New York | | 10017 | | | | | | | | (City) | (State) | | (Zip Code) | | | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | | | | Christopher Bates | 212-844-3693 | | cbates@marex.com | | | | | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing ** | | | | | | | | | | Deloitte & Touche LLP | | | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | | | | | | 30 Rockefeller Plaza | New York | NY | 10112 | | | | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | | | | 10/20/2003 | | 34 | | | | | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | * Claims for exemption from the requirement that the annual reports of an independent public | | | | | | | | | | CFR 240.17a-5(e)(1)(ii), if applicable. | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17
be are to recognd to the collection of information contained in this form are not required to respond unless th | | | | | | | | | displays a currently valid OMB control number. Filed pursuant to Rule 17a5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT {3}------------------------------------------------ #### OATH OR AFFIRMATION | 1. Ram Vittal | | | swear (or affirm) that, to the best of my knowledge and belief, the | |-------------------------------------------------------|------------------------------------------------------------------------------------------------------------|-------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | .12/31 | financial report pertaining to the firm of Marex Capital Markets Inc. | | as of
2 023 , is true and correct. I further swear (or affirm) that neither the company nor any | | | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | as that of a customer.
Notary Public | LORETTA A WAGNER
Notary Public, State of New York
No. 01WA6039830
Qualified in Richmond County 26 | Signature:
Title:
Chief Executive Officer | | | This filing ** contains (chock all annlicable hoves). | | | | - - (a} Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - [ (d) Statement of cash flows. - [ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [ (f) Statement of changes in liabilities subordinated to claims of creditors. - [ (g) Notes to consolidated financial statements. - [ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - [ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - [ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - [k] Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - [ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - [ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - [n] Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - [0] Reconcillations, including appropriate explanations, of the FOCUS Report with computation of net capible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - [p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - [r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - [0] Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - [ {v] Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [ {w} Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [ {x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - O (y) Report describing any material inadequacies found to existed since the date of the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12{k}. - O (z) Other: \*\* To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18e-7(d)/2), as opplicable. {4}------------------------------------------------ # **Deloitte.** **Deloitte & Touche LLP** 30 Rockefeller Plaza New York, NY 10112-0015 USA Tel : + 1 212 492 4000 Fax: +1 212 489 1687 www.d eloitte.com #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder and the Board of Directors of Marex Capital Markets Inc.: #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Marex Capital Markets Inc. (the "Company") as of December 31, 2023, 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, 2023, 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. 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| {6}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 ### 1. Organization and Nature of Business Marex Capital Markets Inc. ("the Company") is incorporated under the laws of the State of New York and is a direct, wholly-owned subsidiary of Marex Services Inc. ("MSI" or "the Parent"). Prior to December 1, 2022, the Company was an indirect, wholly-owned subsidiary of E D & F Man Holdings Ltd, a limited liability company incorporated in England. On December 1, 2022, the Capital Markets division of E D & F Man Holdings Ltd., of which the Company was a member, was acquired by Marex Group plc ("MG" or "the Ultimate Parent"), a limited liability company incorporated in England. Following the acquisition by the Ultimate Parent, the Company changed its name from E D & F Man Capital Markets Inc. to Marex Capital Markets Inc. and changed its fiscal year end from September 30 to December 31. On June 12, 2023, the Company acquired the membership interests of Marex North America LLC ("MNA"), an affiliated company indirectly owned by the Ultimate Parent, in a non-cash transaction at a value of \$9,224. On December 22, 2023, the membership interests of MNA were transferred to MSI, in a non-cash transaction at the Company's then carrying value of \$14,921. The Company operates as a broker and a dealer in U.S. treasury, government agency and other fixed income securities. The Company also executes and clears commodity futures, fixed income, FX, equity, and equity option transactions for the accounts of its customers and operates as a broker in listed and over-the-counter derivative contracts. The Company is registered as a broker-dealer with the U.S. Securities and Exchange Commission ("SEC") and as a Futures Commission Merchant ("FCM") with the U.S. Commodity Futures Trading Commission ("CFTC") and is approved as a member of the Financial Industry Regulatory Authority ("FINRA") and the National Futures Association ("NFA"). The Company is a clearing member of the principal U.S. futures exchanges and the Government Securities and Mortgage Backed Securities Divisions of the Fixed Income Clearing Corporation ("FICC"). Additionally, the Company is a member of the Securities Investor Protection Corporation ("SIPC"). ### 2. Significant Accounting Policies #### Basis of Accounting The Company maintains its financial records in U.S. dollars. The Company's financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). #### Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the financial statements. Management believes that the estimates utilized in preparing its financial statements and the accompanying notes are reasonable; however, actual results could differ materially from those estimates {7}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 ## 2. Significant Accounting Policies (continued) ## Cash and Cash and Securities Segregated under Federal and Other Regulations At December 31, 2023, cash and securities segregated under federal and other regulations on the statement of financial condition consisted solely of cash. The Company's cash balances are held with nationally recognized financial institutions, and exceed the federally insured limit. The Company has not experienced any losses in cash accounts and believes it is not subject to any significant credit risk on cash. #### Trading Assets and Liabilities Trading assets and liabilities and related gains and losses are recorded on a trade date basis. #### Fair Value Measurements The Company's financial instruments are reported at fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures ("ASC 820"). The estimated fair value of trading assets and liabilities are generally based on quoted market prices or dealer quotes. Certain other financial instruments are not carried at fair value but are recorded at amounts that approximate fair value due to their liquid or short-term nature and generally negligible credit risk. These financial assets include cash and cash equivalents and cash and securities segregated under Federal and other regulations or amounts deposited with broker-dealers and clearing organizations and would generally be presented within Level 1 of the fair value hierarchy. Receivables from brokers, dealers and clearing organizations, receivables from customers, receivables from affiliates, payables to brokers and dealers, payables to customers and payables to affiliates, are not carried at fair value; however, the recorded amounts approximate fair value due to their liquid or short term nature. ### Collateralized Financing Transactions The Company's collateralized financing transactions include securities purchased under agreements to resell (resale agreements), securities sold under agreements to repurchase (repurchase agreements) and securities borrowed and securities loaned transactions. Resale and repurchase agreements are accounted for as collateralized financing transactions where the Company has an agreement to sell (or purchase) the same or substantially the same securities before maturity at a fixed or determinable price. It is the policy of the Company to take possession of securities collateralizing resale agreements at the time such agreements are made. In the same manner, the Company provides securities to counterparties in order to collateralize repurchase agreements. These agreements are collateralized primarily by U.S. Treasury and government agency securities, with a fair value equal to or in excess of the principal amount loaned. {8}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 2. Significant Accounting Policies (continued) The market value of the underlying collateral is reviewed daily, and additional cash or other collateral is obtained or returned as necessary. The Company records resale and repurchase agreements at contract price, plus accrued interest, which approximates fair value. At December 31, 2023, the Company had obtained securities as collateral under resale agreements that could be repledged, delivered, or otherwise transferred, with a fair value of \$20,572,387. The firm has \$175,324 pledged to a clearing organization to meet margin requirements. Securities borrowed and securities loaned transactions in equity and corporate debt securities are accounted for as collateralized financing transactions and are recorded at the amount of cash collateral advanced plus accrued interest. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lenders. The Company monitors the market value of securities borrowed and securities loaned on a daily basis, with additional collateral obtained or refunded as necessary. Substantially all of these securities have been repledged, delivered, or otherwise transferred, either as collateral under repurchase agreements or to satisfy the settlement of trading obligations of the Company and its clearing customers. The Company nets certain repurchase agreements and resale agreements with the same counterparty on the statement of financial condition when the requirements of ASC 210-20, Balance Sheet - Offsetting, are met, including the existence of master netting agreements between the Company and its counterparties. #### Translation of Foreign Currencies Assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the statement of financial condition date. #### Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the value assigned to the net assets, including identifiable intangible assets, of a business acquired. Goodwill and finite-lived intangible assets are evaluated annually for impairment. Intangible assets are amortized over their estimated useful lives. #### Memberships and Stock in Exchanges Owned Memberships and stock in exchanges include trading rights and publicly traded shares of exchange stock, some of which is required to be held for membership privileges. Memberships in exchanges and stock in clearing organizations are carried at cost and periodically evaluated for impairment. 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| | (&(,8\$%.(5 | | | \$;\$%.(5 | |----------------------|-------------|--|--|-----------| | C@<6C
62=6CD | | | | | | =62C:?8&C82?:K2E:@?D | | | | | | | | | | | #### **1..\$6(4\$.,<(',0\$0&,0\*!4\$05\$&6,105** !? 244@C52?46 H:E9 ) 2=2?46 )966E &77D6EE:?8 &E96C 'C6D6?E2E:@? \$2EE6CD N) O E96@>A2?J@77D6EDC6AFC492D62?5C6D2=628C66>6?ED@?E96DE2E6>6?E@77:?2?4:2= 4@?5:E:@? H:E9 E96 D2>6 4@F?E6CA2CEJ H96C6 E96J 92G6 2 =682==J 6?7@C4623=6 >2DE6C ?6EE:?8 28C66>6?E2?52==4C:E6C:27@C?6EE:?892G6366?>6E {11}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 5. Collateralized Financing Transactions (continued) The following table presents information about offsetting securities financing transactions and related collateral amounts. Securities financing transactions are included on the statement of financial condition as securities purchased under agreements to resell or securities borrowed and securities sold under agreements to repurchase or securities loaned. | | | | Amounts offset on
the statement of
Gross amount financial condition financial condition | Net amounts
presented on the
statement of | | Cash and financial
instruments not offset on
the statement of
financial condition | | Net amount | |-----------------------------------------------------------------------------|-------------------------|----|-----------------------------------------------------------------------------------------------|-------------------------------------------------|-------|--------------------------------------------------------------------------------------------|---|------------------| | Financial Assets | | | | | | | | | | Securities purchased
under agreement to resell \$
Securities borrowed | 20,369,997
2,501,383 | તે | (15,894,767) \$ | 4,475,230
2,501,383 | ર્ તે | (4,416,030)
(2,458,176) | ಕ | 59,200
43,207 | | Financial Liabilities | | | | | | | | | | Securities sold under
agreements to repurchase \$ | 19,013,629 \$ | | (15,894,767) \$ | 3,118,862 | | (3,096,160) \$ | | 22,702 | | Securities loaned | 2,323,263 | | | 2,323,263 | | (2,268,997) | | 54,266 | The following table presents the Company's gross obligations disaggregated by the class of collateral pledged and the remaining maturity of securities sold under agreements to repurchase and securities loaned at December 31, 2023. | | Remaining Contractual Maturity of the Agreements | | | | | | | | | |---------------------------------------------------------|--------------------------------------------------|---------------|--|---------------|---|------------|---|--------------|--------------| | | | Overnight and | | | | | | Greater than | | | | | Continuous | | Up to 30 Days | | 30-90 Days | | 90 Days | Total | | Repurchase agreements | | | | | | | | | | | U.S. Treasury and agency securities \$ \$ \$ 27,538,454 | | | | \$ 1,031,730 | ಕ | 443.445 | ಕ | | \$19,013,629 | | Securities lending agreements | | | | | | | | | | | Equity Securities | | 2,323,263 | | | | | | | 2,323,263 | | | | | | | | | | | | | Gross recognized liabilities | | 19,861,717 | | \$ 1,031,730 | | 443,445 | | | \$21,336,892 | {12}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 6. Fair Value Measurements ASC 820 establishes a fair value hierarchy which prioritizes the inputs used in valuation techniques, based on their observability in the market. The use of observable inputs is maximized while the use of unobservable inputs is minimized as ASC 820 requires that the most observable inputs be used when available. The three levels of the fair value hierarchy are defined as follows, with Level 1 representing the highest priority inputs and Level 3 representing the lowest priority inputs: Level 1 - Assets and liabilities whose values are based on unadjusted quoted markets in active markets for identical assets or liabilities. Examples include highly liquid U.S. government securities, equity securities and listed options. Level 2 - Assets and liabilities whose values are based on observable inputs, but do not qualify as Level 1 inputs. If the asset or liability has a specified (contractual or redemption) term, a Level 2 input must be observable for substantially the full term (contractual life) of the asset or liability. Examples include U.S. government agency and corporate securities. Level 3 - Assets and liabilities whose values are based on unobservable inputs are classified as Level 3. Unobservable inputs are based on the reporting entity's own assumptions that other market participants would consider (including assumptions about risk) under the best information available in the circumstances. Financial assets and financial liabilities are classified as Level 3 if the unobservable inputs have more than an insignificant impact on the fair value measurement of an instrument. The availability of observable inputs can vary from security and is affected by a wide variety of factors, including, for example, the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. A description of the valuation techniques applied to the Company's major categories of assets and liabilities measured at fair value on a recurring basis is as follows: U.S. government, equity securities and exchange traded options are valued using quoted market prices. These securities are generally traded in active markets and therefore are classified within Level 1 of the fair value hierarchy. {13}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| | (8(. | (8(. | (8(. | !16\$. | |---------------------------------------------|------|------|-------|--------| | 55(65 | | | | | | (646:G23=6D7C@>3C@<6C
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|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{14}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 7. Derivative Instruments (continued) #### Derivatives not designated or qualifying as hedging instruments | | | | | Positive | | | | Negative | | |--------------------------------------|---|-----------------|--|----------|-----|-------------------------|--|-------------|--| | | | Replacement | | | | | | Replacement | | | | | Notional | | Value | | Notional | | Value | | | Exchange-traded futures contracts \$ | | 479 S | | | 4 8 | 4.883 S | | 87 | | | TBA forward contracts | ಕ | 155.500 S | | 7,207 \$ | | 155,407 \$ | | 7.300 | | | Equity options | | \$ 3,427,730 \$ | | | | 942,188 \$ 3,449,267 \$ | | 168,338 | | Exchange-traded futures transactions are classified within Level 1 of the fair value hierarchy. TBA transactions are classified within Level 2 of the fair value hierarchy. #### 8. Goodwill and Intangible Assets | | | | | Accumulated | | Net Book | |------------------------|----------------|---|-----------|--------------|--------|----------| | | Estimated Life | | Cost | Amortization | | Value | | | | | | | | | | Goodwill | N/A | S | 1.717 S | | - \$ | 1.717 | | Customer Relationships | 10-15 years | | 12,088 | 348 | | 11,740 | | Total | | S | 13,805 \$ | | 348 \$ | 13,457 | On July 17, 2023, the Company acquired the customer assets and liabilities and related business assets of an affiliate, MNA, a Delaware limited liability company. MNA was a registered futures commission merchant and engaged in a business which comprised the execution and clearing of listed derivative transactions on designated contract markets and the provision of trade clearing services to institutional and retail market participants and affiliates. As this was a transfer of assets and liabilities between related entities under common control of the Ultimate Parent, the assets were acquired at carrying value. As part of the transfer, the Company paid \$6,204 to acquire intangible assets (customer relationships). #### Acquisition of Cowen's Prime Services and Outsourced Trading On December 1, 2023, the Company acquired the clients, certain staff and selected assets of the prime services and outsourced trading business of Cowen and Co LLC ("Cowen"), a Delaware limited liability company. The Company paid \$32,315 to acquire net assets of \$24,714 and goodwill and intangible assets of \$7,601. The accounting for the acquisition of certain assets of Cowen has only been provisionally determined at the end of the reporting period. As of the date of finalization of these financial statements, the necessary market valuations and other calculations have not been finalized. {15}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 9. Liabilities Subordinated to Claims of General Creditors At December 31, 2023, liabilities subordinated to the claims of general creditors consisted of subordinated borrowings carried at contracted amounts, which approximate fair value. These borrowings are subordinated to the claims of general creditors, are covered by agreements approved by FINRA, and are included by the Company for the purposes of computing net capital under the SEC's Uniform Net Capital Rule. To the extent that these borrowings are required for the Company's continued compliance with minimum net capital requirements, they may not be repaid. On September 28, 2012, MSI provided a subordinated note payable to the Company of \$20,000, with a maturity date of September 28, 2025. The interest rate, which resets periodically, is based on the Secured Overnight Financing Rate ("SOFR") plus 450 basis points. On April 22, 2022, MSI provided a subordinated note payable to the Company of \$20,000, with a maturity date of April 22, 2025. The interest rate, which resets periodically, is based on SOFR plus 450 basis points. On March 24, 2023, MSI provided a subordinated note payable to the Company of \$55,000, with a maturity date of March 24, 2026. The interest rate, which resets periodically, is based on SOFR plus 450 basis points. Lastly, on July 14, 2023, MSI provided a subordinated note payable to the Company of \$250,000, with a maturity date of July 14, 2026. The interest rate, which resets periodically, is based on SOFR plus 450 basis points. #### 10. Commitments, Contingent Liabilities, and Guarantees In accordance with its clearing agreements, the Company may be required to indemnify its clearing brokers against specified potential losses, if any, arising from the provision of clearing services to the Company. The maximum potential amount of future payments that the Company could be required to make under this indemnification cannot be estimated. The Company, however, believes it is unlikely it will have to make payments under these arrangements and, as such, has not recorded any contingent liability in the financial statements for this indemnification. The Company is a member of certain clearing organizations and exchanges. As a member, the Company may be required to pay a proportionate share of the financial obligations of a defaulting member of the clearing organizations or exchanges. While the rules governing different exchange memberships vary, in general, the Company's guarantee obligations would arise only if the exchange had previously exhausted its own resources. In addition, any such guarantee obligations would be apportioned among the other non-defaulting members of the exchange. Any potential contingent liability under these membership agreements cannot be estimated. The Company has not recorded any contingent liability in the financial statements for these guarantees, and management believes that any potential requirement to make payments under these guarantees is remote. {16}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E96 ?@C>2= 4@FCD6 @7 3FD:?6DD E96 @>A2?J >2J 6?E6C :?E@ 7@CH2C5 DE2CE:?8 C6AFC492D6 2?5 C6D2=6 28C66>6?ED H:E9 4@F?E6CA2CE:6D H9:49 2C6 ?@E C6A@CE65 @? E96 DE2E6>6?E @7 7:?2?4:2= 4@?5:E:@?E646>36C E96 AC:?4:A2= G2=F6 @7E96D6 C6AFC492D6 2?5 C6D2=628C66>6?ED H2D 2?5 C6DA64E:G6=J !?244@C52?46H:E9E96AC@G:D:@?@7) @?E:?86?4:6DN) O E96@>A2?J244CF6D7@C2 =:E:82E:@? C6=2E65=:23:=:EJH96?E96 2DD6DD65=:<6=:9@@5 @7 C62=:K:?8 2 7FEFC6=@DD:D AC@323=6 2?5E96 2>@F?E@7=@DD42?36 C62D@?23=J6DE:>2E65 !?2AA=J:?8E96D6AC:?4:A=6D E96:?7@C>2E:@?2G2:=23=6 >2J:?5:42E6E92EE966DE:>2E652>@F?E@7=@DD:DH:E9:?2C2?86@72>@F?ED-96?2?2>@F?EH:E9:?2 C2?86 @7=@DD:D:56?E:7:65 2DE96 >@DE=:<6=J C6DF=E H:E9:?E96 C2?86 E96 2>@F?E:D 244CF65 3JE96 @>A2?J !?E96?@C>2=4@FCD6@73FD:?6DD E96@>A2?J>2J364@>6A2CEJE@ @C36?2>65:? =2HDF:ED@C D:>:=2CAC@4665:?8D\*96@>A2?J36=:6G6D 32D65@?:EDAC6D6?E2E6C:2=67764E@? E96@>A2?JPDDE2E6>6?E@77:?2?4:2=4@?5:E:@? {17}------------------------------------------------ Notes to Statement of Financial Condition (In Thousands) December 31, 2023 #### 11. Related-Party Transactions At December 31, 2023, the Company has the following outstanding balances with related parties: | Receivables from affiliates (included in other assets): | | | |---------------------------------------------------------|---|--------| | Marex US Holdings Inc. | S | 267 | | Marex Spectron International Ltd. | | 173 | | X-Change Financial Access LLC | | 171 | | Other | | 163 | | | S | 774 | | Payables to affiliates: | | | | Marex Financial | S | 13.941 | | Marex Services Inc. | | 4,044 | | Marex Group plc | | 2,151 | | Marex Client Services Inc. | | 1,574 | | Other | | 2,330 | | | | 24,040 | In the normal course of business, the Company enters into transactions with affiliated companies. The Company executes and clears trades for affiliates and utilizes clearing brokers to execute and clear transactions on exchanges where the Company is not a member. Included in receivables from broker-dealers is \$92,501 from Marex Financial ("MF"), related to such transactions. Included in payables to customers are \$1,057,623 due to MF, \$9,034 due to Marex Derivative Products Inc., and \$1,102 payable to employees. The Company was included in the consolidated tax returns of E D & F Man Capital Markets US Holdings Inc. ("USH") from October 1, 2022 through November 30, 2022. During the 15 month period ended December 31, 2023, the Company made tax payments of \$549 to USH. The Company was included in the consolidated tax returns of MNAH beginning December 1, 2022. During the 15 month period, the Company made tax payments of \$3,190 to MNAH. At December 31, 2023, the Company had \$345,000 in subordinated borrowings payable to MSI. In the normal course of business, Marex Client Services Inc. ("MCS") purchases outstanding receivables from the Company at a discount to book value. The total amount of receivables purchased by MCS in the 15 month period ended December 31, 2023 was \$33,698. The Company introduces business to and executes trading activity on behalf of MF. #### 12. Employee Benefit Plans Substantially, all employees of the Company are covered by MSI's defined contribution benefit plan. The Company's contribution is determined under provisions of the plan. {18}------------------------------------------------ %@E6DE@)E2E6>6?E@7:?2?4:2=@?5:E:@? *-* 646>36C #### **!\$:\$6,10** D@7646>36C E96@>A2?J92D C64@C5652?6E5676CC65E2I2DD6E@7 H9:49:D :?4=F565:?@E96C2DD6ED@?E96DE2E6>6?E@77:?2?4:2=4@?5:E:@?\*96?6E5676CC65E2I2DD6E4@?D:DED AC:>2C:=J@7E6>A@C2CJ5:776C6?46DC6=2E65E@6IA6?D6244CF2=D2?55:776C6?46D:?E963@@<2?5E2I 32D:D@78@@5H:==2?5:?E2?8:3=62DD6ED \*96 @>A2?J 244CF6D :?4@>6 E2I6D 2E E96 6?24E65 DE2EFE@CJ C2E6 \*96 AC:?4:A2= C62D@?D 7@C E96 5:776C6?4636EH66?E96@>A2?JPD67764E:G6E2IC2E62?5E96DE2EFE@CJ7656C2=:?4@>6E2IC2E6C6=2E6 E@A6C>2?6?E:E6>DDE2E62?5=@42=E2I6D \*96@>A2?J92D2?2=JK65:EDE2IA@D:E:@?DH:E9C6DA64EE@E962AA=:423=6:?4@>6E2I:DDF6D7@CE96 @A6? E2I J62CD E9C66 J62CD 368:??:?8 H:E9 7:D42= J62C :? 6249 C6DA64E:G6 ;FC:D5:4E:@? :?4=F5:?8%6H/@C< %6H/@C<:EJ2?5!==:?@:D 2?556E6C>:?65?@>2E6C:2=E2I=:23:=:E:6D6I:DE65 2D@7646>36C \$% :D?@EF?56C2?J7656C2=@CDE2E6E2I2F5:E2EE9:DE:>6 #### **(6\$2,6\$.(37,4(/(06** \*96@>A2?J:D DF3;64EE@E96)PD+?:7@C>%6E2A:E2=(F=6 (F=6 42?5E96\*PD >:?:>F> 7:?2?4:2= C6BF:C6>6?ED 7@C \$D 2?5 :?EC@5F4:?8 3C@<6CD (68F=2E:@? H9:49 C6BF:C6DE96>2:?E6?2?46@7>:?:>F>?6E42A:E2=\*96@>A2?J4@>AFE6D:ED?6E42A:E2=F?56CE96 2=E6C?2E6>6E9@5@7(F=64 H9:49C6BF:C6DE96>2:?E6?2?46@7>:?:>F>?6E42A:E2=6BF2=E@ E968C62E6C@7 @C@7288C682E6563:E:E6>D 2D567:?65 @C @C@7FDE@>6C2?5 %@? FDE@>6C C:D< >2:?E6?2?46 >2C8:? C6BF:C6>6?ED 2D 567:?65 2D 2 C68:DE6C65 \$ H:E9E96 \*E646>36C E96@>A2?J925?6E42A:E2=@7 2?56I46DD?6E42A:E2=@7 5G2?46D E@ 277:=:2E6D C6A2J>6?E @7 DF3@C5:?2E65 =:23:=:E:6D 5:G:56?5 A2J>6?ED 2?5 @E96C6BF:EJH:E95C2H2=D2C6DF3;64EE@46CE2:?=:>:E2E:@?D2?5@E96CAC@G:D:@?D@7E9642A:E2=CF=6D @7E96)2?5@E96CC68F=2E@CD #### **7%5(37(068(065** \*96@>A2?J92D6G2=F2E656G6?EDDF3D6BF6?EE@646>36C E9C@F89\$2C49 E9652E6 @? H9:49 E96D6 7:?2?4:2= DE2E6>6?ED H6C6 :DDF65 \*96C6 H6C6 ?@C64@8?:K23=6 @C ?@? C64@8?:K23=6 DF3D6BF6?E6G6?ED5FC:?8E9:DA6C:@5 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.