# JANE STREET EXECUTION SERVICES, LLC X-17A-5 (2025-02-27) — Broker-dealer annual report - Company: JANE STREET EXECUTION SERVICES, LLC - Form: X-17A-5 - Filed: 2025-02-27 - Period: 2024-12-31 - Accession: 0001572095-25-000003 - CIK: 1572095 - File #: 8-69254 - Type: Broker-dealer - Material weakness: No - Auditor: Ernst & Young LLP - Auditor location: New York, NY - Contact: Marie Harrison - Phone: 212-651-6069 - Signed by: Davor Zgaljic (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1572095/000157209525000003/jsespublic2024.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) #### STATEMENT OF FINANCIAL CONDITION Jane Street Execution Services, LLC December 31, 2024 With Report of Independent Registered Public Accounting Finn {1}------------------------------------------------ ### Statement of Financial Condition December 31 , 2024 ### **Contents** | Independent
Registered
Public
Accounting
Report
of
Firm | 1 | |-------------------------------------------------------------------------------------------------------|--------| | of
Statement
Financial
Condition | | | Statement
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Financial
Condition
Statement
of
Notes
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Financial
Condition | 2
3 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) Ernst & Young LLP One Manhattan West New York, NY 10001 Tel: +1 212 773 3000 Fax: +1 212 773 6350 ey.com #### **Report of Independent Registered Public Accounting Firm** To the Members and Subsidiary Operating Committee of Jane Street Execution Services, LLC: #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition ofJane Street Execution Services, LLC (the "Company") as of December 31, 2024 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2024, in conformity with U.S. generally accepted accounting principles. #### **Basis for Opinion** Thisfinancial statement is the responsibility ofthe Company's management. Our responsibility isto express an opinion on the Company's 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2013. February 27, 2025 {3}------------------------------------------------ # Statement of Financial Condition December 31, 2024 | Assets | | |------------------------------------------------------------|--------------------| | Cash | \$
42,414,422 | | Due
from
brokers
and
clearing
organizations | 56,072,125 | | Due
from
affiliates | 48,358,995 | | Other
assets | 11,512,452 | | Total
assets | \$
158,357,994" | | | | | Liabilities
and
members'
equity | | | Due
brokers
to | \$
819,213 | | Due
to
Parent | 33,486,457 | | Duc
to
affiliate | 26,927 | | Accrued
expenses
and
other
liabilities | 30,181,908 | | Total
liabilities | 64,514,505 | | | | | Members'
equity | 93,843,489 | | Total
liabilities
members'
equity
and | \$
158,357,994 | | | | *See accompanying notes.* {4}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2024 #### **1. Nature of Operations** Jane Street Execution Services, LLC (the "Company"), is a Delaware limited liability company registered as a broker-dealer under the Securities Exchange Act of 1934 ("1934 Act"). The Company is majority owned by Jane Street Group, LLC (the "Parent"). JSES Holding, LLC, a wholly owned subsidiary of the Parent, holds a minority ownership stake which entitles it to a portion of the annual profits of the Company. The Company is a member of various exchanges, and the Financial Industry Regulatory Authority, Inc. ("FINRA"), who serves as its Designated Examining Authority. The Company is also registered as an introducing broker of the National Futures Association ("NFA"). The Company provides brokerage services to third-party broker-dealer clients and other institutional customers primarily on an agency basis. Third-party orders are generally executed by matching such orders against contra-side orders provided by affiliate entities. Upon request, the Company may also route orders directly to various exchanges. Additionally, the Company engages in riskless principal transactions, whereby an order to buy or sell a security is received from a third-party client or customer, contemporaneously with an order to sell or buy a security from an affiliate entity. All terms and pricing of riskless principal transactions are agreed to by all parties prior to the order being executed. The Company also facilitates intercompany securities transactions amongst certain affiliates. In the course of performing the brokerage services described above, the Company clears its transactions through two clearing brokers on a fully disclosed basis and does not carry securities accounts for customers or perform custodial functions relating to customer securities. The Company is also a clearing broker-dealer under the 1934 Act, as well as a member of the Depository Trust Company ("DTC") and the National Securities Clearing Corporation ("NSCC"). In this capacity, the Company executes and clears exchange-listed US equity transactions for a non broker-dealer affiliate via its account at the NSCC. This activity is also exempt from the Securities Exchange Commission ("SEC") Rule 15c3-3. ### **2. Summary of Significant Accounting Policies** ### *Basis of Presentation* This financial statement has been prepared in conformity with accounting principles generally accepted in the United States of America. {5}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2024 #### *Segment Reporting* The Company is engaged in a single line of business as a securities broker-dealer, which primarily involves facilitating agency transactions (see Note 1). The Company has identified its Chief Executive Officer as the chief operating decision maker ("CODM"), who uses net income to evaluate the results of the business and determine how to allocate resources. Additionally, the CODM uses excess net capital (see Note 7), which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy, such as whether to reinvest profits or withdraw capital. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using the Company's information as a whole. The measure of segment assets is equal to the total assets shown on the Statement of Financial Condition. The accounting policies used to measure the profit and loss of the segment are the same as those described here within the summary of significant accounting policies. ### *Use of Estimates* The preparation of this financial statement requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of this financial statement. Actual amounts could differ from these estimates. ### *Cash* Cash includes amounts maintained in bank accounts. The Company at times may maintain cash in deposit accounts in excess of Federal Deposit Insurance Corporation limits. The Company has not experienced any losses on such accounts. ### *Commissions* Commission revenues are generated by the Company for acting as an agent on behalf of its customers, including certain affiliates, where the Company's performance obligation consists of trade execution services. Because this obligation is satisfied on trade date, commission revenues are recognized on a trade date basis, net of any soft dollar component (as defined by Section 28(c) of the 1934 Act). Any soft dollars collected from customers are ultimately passed through to third-party providing brokers. The Due to brokers balance as of December 31, 2024 represents soft dollars owed to the providing brokers. {6}------------------------------------------------ # Notes to Statement of Financial Condition ### December 31, 2024 On trades in which the Company acts as riskless principal it earns commission revenues from the affiliate entities who arc party to such trades. These revenues arc also recognized on a trade date basis, at which time its performance obligation is satisfied. Commission revenues also include fees charged to customers and certain affiliates to cover supervisory and regulatory fees charged by oversight organizations. Included in Other assets as of December 31, 2024 arc commissions receivable of \$9,751,540, net of an allowance for credit losses of \$348,320. Expected credit losses are measured based on the average historical loss rate, adjusted for current and expected future economic conditions as applicable, then applied to the current receivable balance. ### *Income Taxes* As a partnership for U.S. tax purposes, the partners are individually liable for U.S. federal taxes, and certain state and local income taxes. The Company itself is subject to income taxes in the U.S., including New York City ("NYC") unincorporated business tax ("UBT"), state pass-through entity taxes, and other entity level taxes imposed by certain U.S. states. A deferred tax asset of \$1,437,740 has been recognized to reflect the future tax consequences attributable to the differences between the treatment of software development and similar costs, which are comprised of compensation and certain related expenditures. Based on all available evidence, the Company has not recorded a valuation allowance against this deferred tax asset at December 31, 2024. The Company's estimated tax payable as of December 31, 2024 is \$889,027. This amount is included in Accrued expenses and other liabilities. Other than NYC UBT and the aforementioned state taxes, no additional benefit or provision is made in the accompanying financial statement. The Company's U.S. federal income tax return is generally subject to examination by the Internal Revenue Service for a period of three years after it is filed. State and local tax returns and/or other filings may be subject to examination for different periods, depending upon the tax rules of each {7}------------------------------------------------ # Notes to Statement of Financial Condition ### December 31, 2024 applicable jurisdiction. The Company currently has no open tax examinations at the federal, state, or local level. Tax laws arc complex, and subject to different interpretations by the taxpayer and taxing authorities. Significant judgment is required when evaluating tax positions and related uncertainties. Future events such as changes in tax legislation could require a provision for income taxes. Any such changes could significantly affect the amounts reported in Members' equity. In accordance with ASC 740-10, *Accounting for Uncertainty in Income Taxes,* the Company has not accrued any amounts related to income tax positions and related uncertainties. ### *Accounting Pronouncements* In March 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-01, *Leases—Common Control Arrangements (Topic 842).* This ASU provides updated guidance for accounting for common control leases and leasehold improvements, and is effective for periods beginning after December 15, 2023. The Company evaluated the effect of this pronouncement on its financial statement and determined that there is no impact. In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280).* This ASU expands the disclosures for reportable segments, requiring public business entities to disclose significant expenses for reportable segments. Public business entities with a single reportable segment are required to provide the new disclosures and all segment disclosures required under ASC 280. This pronouncement is effective for periods beginning after December 15, 2023. The Company's expanded disclosures related to its single reportable segment included within Note 2 did not have a material impact on its financial statement. In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740).* This ASU provides updated guidance to enhance the transparency and decision usefulness of income tax disclosures. This pronouncement is effective for periods beginning after December 15, 2024. The Company is evaluating the effect of this pronouncement on its financial statement. In March 2024, the FASB issued ASU 2024-01, *Compensation—Stock Compensation (Topic 718).* This ASU provides clarification and illustrative examples on how an entity determines whether a profits interest or similar award should be accounted for as a share-based payment arrangement. This pronouncement is effective for periods beginning after December 15, 2024. The Company is evaluating the effect of this pronouncement on its financial statement. {8}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2024 #### **3. Fair Value of Financial Instruments** As of December 31 , 2024, the Company did not own any financial instruments other than cash. ### **4. Concentration of Credit Risk** The Company maintains domestic as well as foreign cash deposit accounts with financial institutions which, at times, may exceed U.S. federal or local insured limits. In the event of a financial institution's insolvency, recovery of assets may be limited to account insurance or other protection afforded to such accounts. The Company has not experienced any losses on these accounts. Additionally, the Company is engaged in brokerage activities, where the counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. In accordance with its clearing agreements, the Company has agreed to indemnify its clearing brokers for losses, if any, which the clearing brokers may sustain from transactions introduced or conducted by the Company. The risk of default depends on the creditworthiness of each counterparty. It is the Company's policy to review, as necessary, the credit standing of its counterparties. ### **5. Due From Brokers and Clearing Organizations** The clearing and depository operations for the Company may be provided by various brokers. The amounts presented in Due from brokers and clearing organizations are primarily composed of clearing deposits and cash balances resulting from or associated with trading activities, net of related transaction fees. ### **6. Intercompany and Related Party Transactions** #### *Expense Allocation* The Parent pays for and allocates payroll and certain operating expenses on behalf of the Company. The Company may also pay for various expenses on behalf of the Parent. Any unsettled amounts between the Company and the Parent arc reflected as Duc to Parent. Additionally, certain affiliates may pay for various operating expenses on behalf of the Company, and the Company may pay for various expenses on behalf of certain affiliates. The amounts reflected as Duc to affiliate and Duc from affiliates include the unpaid portion of these expenses. {9}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2024 #### *Commissions* Separate from the above, the Company cams commissions from its affiliates and a related party investment partnership. For certain orders from third-party clients, the Company earns commissions and may make an incentive payment to its affiliates for acting as a counterparty to such orders. The uncollected commissions earned and incentive fee payable are netted within the Due from affiliates or Duc to affiliate balances. #### *Subordination Agreement* Where the Company engages in self-clearing activities for its non-broker-dealer affiliate, the affiliate's claims are subordinated to the claims of creditors of the Company. ### *Investor, Equity and IP Units* Upon direction from its Operating Committee, units of the Parent are issued to certain members, including those that provide services to the Company. These units are a means of distributing the residual profit and loss of the Parent. All of these units are issued at the Parent level. The Parent has made a policy election to account for equity units and IP units awarded to certain members who provide services to the Company as distributions from equity. #### *Other* An Intercompany Loan Agreement ("the Intercompany Loan") between the Parent and the Company defines specific terms and conditions under which the Parent may lend the Company sums of money on a revolving basis. The aggregate principal amount outstanding at any one time shall not exceed \$250,000,000. The Intercompany Loan expires in December 2027, and carries interest at a commercial rate to be determined by the Parent on the first day of each calendar quarter in which an advance is made. Since the inception of the Intercompany Loan through the period ended December 31, 2024, no funds have been loaned from the Parent under the agreement. ### **7. Regulatory Requirements** As a registered broker-dealer, the Company is subject to the Uniform Net Capital Rule 1 5c3-l ("net capital rule") of the SEC. The Company has elected to be subject to the alternative standard permitted by the rule, which requires that its net capital be at minimum the greater of \$250,000 or 2% of aggregate debit items. Additionally, as a member of the NFA, the Company is subject to Regulation 1.17 of the Commodity Futures Trading Commission, which requires the Company to maintain {10}------------------------------------------------ # Notes to Statement of Financial Condition ### December 31, 2024 "adjusted net capital" greater than \$45,000. The Company's minimum net capital requirement is the greater of the requirement under the net capital rule or Regulation 1.17. As of December 31, 2024, the Company had net capital of \$37,547,336, which exceeded its largest minimum requirement of \$250,000 by \$37,297,336. The Company applies judgment in interpreting certain provisions of the net capital rule. Those interpretations, which arc reviewed periodically by FINRA and the SEC, can have a significant impact on computed net capital. Management believes its interpretations arc appropriate. The Company's equity withdrawals are subject to certain provisions of the net capital rule of the SEC and other regulatory bodies. ### **8. Members' Equity** As of December 31 , 2024, Members' equity is composed of the following: | -
Class
Interests
Jane
Street
Group,
LLC
A | \$
92,732,171 | |-----------------------------------------------------------------|------------------| | Class
Interests
-
JSES
LLC
B
Holding, | 1,111,318 | | Members'
equity | \$
93,843,489 | Although Class B interests are entitled to no voting rights, such interests entitle the holder to a distribution preference in the event of liquidation up to the value of the corresponding capital account balance. ### **9. Guarantees and Commitments** The Company provides guarantees to clearing organizations. Under the standard clearing organization agreement, members are required to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearing organization, other members would be required to meet the resulting shortfalls. The maximum potential amount of future payments that the Company could be required to make under its guarantees 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 Statement of Financial Condition. {11}------------------------------------------------ ### Notes to Statement of Financial Condition December 31, 2024 #### **10. Subsequent Events** The Company has evaluated all events through the date this financial statement was issued and determined no additional events or transactions required recognition or disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.