Company: COHN
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007158
Chunk: 600

Company: Cohen & Co Inc.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 13
Chunk 600
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ASB ASC 815, Derivatives and Hedging (“ASC 815”), provides for optional hedge accounting. When a derivative is deemed to be a hedge and certain documentation and effectiveness testing requirements are met, reporting entities can record all or a portion of the change in the fair value of a designated hedge as an adjustment to OCI rather than as a gain or loss in the statements of operations. To date, the Company has not designated any derivatives as hedges under the provisions included in ASC 815.
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   All of the derivatives that the Company enters into contain master netting arrangements.  If certain requirements are met, the offsetting provisions included in FASB ASC 210, Balance Sheet (“ASC 210”), allow (but do not require) the reporting entity to net the derivative asset and liability on the consolidated balance sheets.  It is the Company’s policy to present the assets and liabilities on a net basis if the conditions of ASC 210 are met.  However, in general the Company does not enter into offsetting derivatives with the same counterparties.
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   Derivative financial instruments are recorded at fair value. If the derivative was entered into as part of the Company’s broker-dealer operations, it will be included as a component of investments-trading or trading securities sold, not yet purchased. Otherwise, it is included in other investments, at fair value or other investments sold, not yet purchased. 
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   The Company  may, from time to time, enter into derivatives as investments or to manage its risk exposures arising from (i) fluctuations in foreign currency rates with respect to the Company’s investments in foreign currency denominated investments; (ii) the Company’s investments in interest sensitive investments; (iii) the Company's investments in equities; and (iv) the Company’s facilitation of mortgage-backed trading. Derivatives entered into by the Company  may include (a) foreign currency forward contracts; (b) purchase and sale agreements of TBAs and other forward agency MBS contracts; (c) other extended settlement trades; and (d) share forward arrangements ("SFAs").  See note 10. 
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   TBAs are forward contracts to purchase or sell MBS with collateral that remains “to be announced” until just prior to the trade settlement. In addition to TBAs, the Company sometimes enters into forward purchases or sales of agency MBS where the underlying collateral has been identified.  These transactions are referred