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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   333-127385
 (Commission File Number)
    PENSON WORLDWIDE,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or Other
    Jurisdiction of
    Incorporation or Organization)

6211(Primary Standard
    Industrial
    Classification Code Number)

75-2896356(I.R.S. Employer
    Identification No.)   1700 Pacific Avenue, Suite 1400
 Dallas, Texas 75201
 (214) 765-1100
 (Address, including zip code,
    and telephone number, including area code, of the
    registrants principal executive offices)
  Securities registered pursuant to Section 12(b) of the
    Act
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value
    $0.01 per share

NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 



PENSON
    WORLDWIDE, INC.Form 10-K
    For the Fiscal Year Ended December 31, 2006
    TABLE OF CONTENTS
  Basis of
    Presentation


1Special
    Note Regarding Forward-Looking Statements


1PART I


4Item 1.


Business


4Item 1A.


Risk
    Factors


20Item 1B.


Unresolved Staff
    Comments


33Item 2.


Properties


33Item 3.


Legal
    Proceedings


33Item 4.


Submission of
    Matters to a Vote of Security Holders


33PART II


33Item 5.


Market for the
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


33Item 6.


Selected
    Financial Data


37Item 7.


Managements
    discussion and analysis of financial condition and results of
    operations


38Item 7A.


Quantitative and
    qualitative disclosure about market risk


53Item 8.


Financial
    Statements and Supplementary Data


54Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


54Item 9A.


Controls and
    Procedures


55Item 9B.


Other
    Information


55PART III


55Item 10.


Directors and
    Executive Officers of the Registrant


55Item 11.


Executive
    Compensation


56Item 12.


Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters


56Item 13.


Certain
    Relationships and Related Transactions


56Item 14.


Principal
    Accounting Fees and Services


56PART IV


56Item 15.


Exhibits and
    Financial Statement Schedules


56Signatures


57SubsidiariesCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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Basis of
    Presentation  Form 10-K,
     Special
    Note Regarding Forward-Looking Statements    
    interest rate fluctuations;
    general economic conditions and the effect of economic
    conditions on consumer confidence;
    reduced margin loan balances maintained by our customers;
    fluctuations in overall market trading volume;
    reductions in per transaction clearing fees;
    legislative and regulatory changes;
    our ability to attract and retain customers and key personnel;
    and
    those risks detailed from time to time in our press releases and
    periodic filings with the Securities and Exchange Commission.   1




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Glossary
    of selected terms
  Algorithmic traders
  Algorithmic trading
  ASP
  Back-end trading software
  Clearing
  Clearing firm and/or
  Client
  Correspondent and/or and/or
  Custody
  Customer
  Direct access or Direct market
    access
  Electronic Communications Network or
    ECN
  Execution routing
  FCM
  Front-end trading software
 2




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Level I market information
  Level II market information
  Level I trading software
  Level II trading software
  Online trading
  Settlement
 3




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PART I  Item 1.
    Business  Overview
             4




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Managements Discussion and Analysis of
    financial condition and results of operations
    Clients
  non-U.S. entities
    Market
    opportunity
    
    Increase in trading volumes and
    executions.  The increase in trading volumes and
    executions in equities, options and futures markets over the
    past several years has led to an increase in the number of
    transactions requiring execution, processing and settlement.
    Shift to outsourced solutions.  Broker-dealers
    outside the U.S. are increasingly following the continuing
    and common practice in the U.S. of outsourcing their
    clearing functions. In addition, firms in the global securities
    and investment industry are expanding their use of third-party
    technology to manage their securities trading infrastructure. 5




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
    Increase in trading in multiple
    markets.  Investors increasingly seek to trade in
    multiple instruments, multiple markets and in multiple
    currencies at once. The technological challenges associated with
    clearing, settlement, and custody in multiple geographies,
    currencies, and asset classes will push correspondents to seek
    the most comprehensive and sophisticated service providers.
    Industry consolidation.  Although the
    significant effort and potential business disruption associated
    with conversion to a new clearing firm may discourage
    correspondents from switching service providers, consolidation
    among clearing service providers has led to forced conversions.
    These conversions result in opportunities for correspondents to
    seek competing offers and, therefore, for service providers to
    solicit new correspondents business without having to
    overcome the difficulties of moving from an incumbent.
    Demand for increased reporting capabilities and integrated
    technology solutions.  Clients are increasingly
    demanding products that seamlessly integrate front, middle and
    back-office systems and allow for near real-time updating of
    account status and margin balances.
    Opportunities in Canadian, European and Asian
    markets.  The Canadian and European securities and
    investments industries have followed many of the same trends as
    the U.S. market. Although we have previously experienced
    difficulties in implementing our operational plan in the U.K.,
    (principally due to (i) a longer than anticipated time
    frame for certain of our clients to implement technology
    required to execute orders for new products that are derivatives
    of securities that trade on the London Stock Exchange,
    (ii) our inability to attract sufficient institutional
    order flow, and (iii) delays in implementing technology
    needed to expand our European order execution hub), during 2005,
    we revised our operating strategy in the U.K., restructured
    local management and scaled back our expense structure to better
    correspond with our level of revenues. Accordingly, we believe
    we are now well-positioned to exploit these opportunities based
    on our existing presence in these markets. In 2006, we were able
    to reduce our losses in the U.K. by 79%, but cannot guarantee
    that we will be able to continue to do so in 2007 and beyond.
    See Risk factors  Risks related to our business
    and our industry. In addition, clearing firms in these
    markets are less likely to own trading applications, creating
    opportunities for the sale of NEXAs products. We opened
    our first Asian office in Hong Kong in the first quarter of
    2007, and expect to increase our Asian operations in 2007. We do
    not expect our operations to develop in Asia as quickly as our
    operations developed in Canada and Europe due to the fact that
    we intend to principally grow our Asian office organically
    rather than initiate operations through the purchase of an
    existing business as we did in both Canada and the U.K. Our
    Asian operations will initially be limited to marketing our
    technology products.  Our
    differentiated product offerings
    
    Variable clearing costs and economies of
    scale.  We offer clearing services to our
    correspondents on a variable cost structure based on transaction
    volume. We believe that our pricing structure allows our
    correspondents to take advantage of economies of scale by
    leveraging our investment in technology, software and systems at
    a significantly lower cost than these correspondents would
    generally incur to self-clear. The ability to obtain securities
    clearing services on a cost-effective basis is a key factor in
    enabling direct access and online broker-dealers to charge their
    customers lower commissions than those charged by traditional
    broker-dealers.
    Trading support in multiple markets and
    currencies.  We offer multi-lingual,
    multi-currency international products. We believe that our
    global service offering provides our correspondents with the
    ability to operate efficiently across multiple markets, asset
    classes and currencies. Our global service offerings allow us to
    provide a single statement showing customer trades in multiple
    international markets. 6




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
    Enhanced account portfolio information
    services.  We have created customized software
    solutions to enable our correspondents to manage and analyze
    their accounts, which assists them in improving service levels
    to their customers while lowering fixed costs. We offer private
    label and custom development capability to meet the branding
    needs of our correspondent and other institutional clients.
    Technology and clearing integration.  Our
    solutions provide an integration of front, middle and back
    office systems and allow near real-time updating of account
    status and margin balances, providing better service to
    investors and better risk management to the correspondent.
    Facilitation of compliance with governmental
    regulation.  By outsourcing regulated activities,
    such as margin lending, our correspondents are able to minimize
    reporting requirements and reduce the burden on management of
    dealing with related compliance issues. In addition, we can
    facilitate broker-dealer compliance with other regulatory
    requirements by providing automated reporting, record keeping
    and other tasks.
    Margin lending availability.  We make margin
    loans directly to the customers of our correspondent
    broker-dealers. As a result, our correspondents can compete more
    effectively in attracting their customers by earning interest
    income relating to margin loans without having to satisfy
    related capital requirements.
    Foreign currency exchange trading
    availability.  In 2007, we began to act as a
    dealer for currency foreign exchange trades with certain
    institutional clients and other parties. In addition, we intend
    to begin to offer a third party banks foreign exchange
    trading program to certain of our retail clients in the near
    future.  Our
    competitive strengths
    
    Fully-integrated securities and futures processing and
    technology solutions.  We are a leading provider
    of infrastructure services to financial intermediaries offering
    a fully-integrated solution across major securities and futures
    processing needs. We believe our ability to integrate our
    technology offerings into all of our products and services is a
    significant factor in the successful expansion of our client
    base and the increase of our revenue from existing clients. Our
    products and services support trading in multiple markets,
    multiple investment products and multiple currencies, with
    integrated execution, clearing and settlement solutions. It is
    our belief that, while some clients are willing to obtain these
    products from multiple vendors, most will determine that it is
    easier to obtain solutions with lower integration costs and
    risks from one provider that can also address the regulated
    securities and futures aspects of their business. In addition,
    NEXA provides real-time and historical trading and brokerage
    management tools which complement our clearing services.
    Flexible services and infrastructure.  We
    provide a broad offering of infrastructure and technology
    products and services to our clients, available both on an
    unbundled basis and as a fully-integrated solution. Our clients
    may choose to host these products on their own computer
    infrastructure or select that we host them. In addition, clients
    may either incorporate NEXAs brand name or provide these
    products and services to their customers on a private label
    basis. We work closely with each of our clients to provide the
    set of products and services appropriate for their individual
    needs.
    Established market position as an independent provider of
    correspondent clearing services.  Since our
    establishment in 1995, we have grown organically and through
    acquisitions to become a leading provider of clearing services
    to approximately 230 active correspondents in the U.S., Canadian
    and U.K. markets. Unlike most other major clearing providers, we
    are not affiliated with a larger financial institution. As an
    independent clearing and technology solutions provider, we
    generally do not compete with our clients in other lines of
    business. Our independence is a key selling point when
    soliciting new business.
    Highly attractive and diversified client
    base.  Our client base is comprised of online,
    direct access and traditional retail broker-dealers, banks,
    hedge funds, FCMs and other futures traders, algorithmic traders
    and securities exchanges and is internationally diversified
    through our operations in Canada, the U.K. and Asia. For the
    year ended December 31, 2006, revenues from clearing
    operations, including related interest 7




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revenues, accounted for 84% of total revenues. Direct market
    access broker-dealers accounted for approximately 17.4% of these
    revenues and represented approximately 18.0% of our total
    correspondents, traditional retail broker-dealers accounted for
    approximately 19.7% of these revenues and represented
    approximately 38.9% of our total correspondents and online
    broker-dealers accounted for approximately 15.4% of these
    revenues and represented approximately 14.1% of our total
    correspondents. We have more recently expanded our market to
    include large banks, hedge funds, FCMs and other futures
    traders, algorithmic traders and securities exchanges which
    comprised the balance of our revenues and correspondents.  
    Scalable, recurring revenue business
    model.  Our business benefits from a scalable
    operating platform. Our existing infrastructure is capable of
    processing significant additional volumes with limited
    incremental increases in our fixed costs. We receive a recurring
    stream of revenues based on volumes from each of our
    correspondents with a low marginal cost of sales. In addition, a
    significant portion of our technology revenues are based on ASP
    arrangements with clients, linked to transactions and users.
    Proven and highly motivated management
    team.  With an average of over 31 years of
    industry experience and holding a substantial equity interest in
    Penson, our three-member Executive Committee has the proven
    ability to manage our business through all stages of the
    business cycle. Roger J. Engemoen, Jr., Daniel P. Son, and
    Philip A. Pendergraft, our Chairman, President and Chief
    Executive Officer, respectively, founded our business in 1995
    and have built it to its current position. This senior
    management group continues to own a significant portion of our
    Company.  Our
    growth strategies
    
    Capitalize on industry trends.  We believe we
    are positioned to benefit from several broad industry trends:  
    Internationalization.  Cross-border
    functionality is becoming increasingly important to attracting
    brokerage clients. With operations in four countries and the
    ability to provide access to markets as well as clearing and
    settlement services covering 40 depositories around the world in
    multiple currencies, we can provide this high-value service to
    our clients.
    Consolidation.  Typically, high conversion
    costs are a significant obstacle which must be overcome by a
    clearing firm which seeks to attract business from
    correspondents who are currently clients of another clearing
    firm. However, consolidation among clearing service providers
    has led to many forced conversions. As an independent provider
    and technology leader, we are well positioned to attract new
    clients faced with conversion decisions due to industry
    consolidation.
    Trading in multiple products.  Clients
    increasingly seek to trade in multiple products on the same
    computer terminal, including equities, options and futures. Our
    products and services provide this capability and we believe
    this trend provides us with a significant opportunity to grow
    our business.
    Outsourcing.  The high cost of self-clearing
    and increased regulatory scrutiny on securities and futures
    firms have driven many broker-dealers to outsource their
    clearing responsibilities and technology needs. Even some larger
    firms are finding it more efficient to outsource such services.
    We believe this trend will continue.  
    Enhance revenue potential of each client
    relationship.  We offer a variety of products and
    solutions to broker-dealers and securities firms, which together
    form an
    end-to-end
    solution. As a result, we intend to grow in part by selling
    additional products to our existing clients. Some of NEXAs
    clients are not currently clearing clients of Penson. We believe
    we have a significant opportunity to offer the full spectrum of
    clearing and execution services to many of NEXAs clients,
    as well as offering technology services to our clearing and
    execution clients. 8




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
    Leverage existing platform to expand our product set and
    client base.  Due to our significant investments
    in technology, we believe our infrastructure provides the
    leading fully-integrated securities clearing and technology
    package to our core market. This infrastructure facilitates
    clearing across several security types, including options and
    futures, and additional products can be offered and new clients
    added with minimal marginal cost. Using this infrastructure, we
    intend to expand our client base by:  
    Focusing on the high-volume direct access, online
    broker-dealers and the futures trading
    industry.  We will continue to target our clearing
    services to the growing futures trading, direct access and
    online broker-dealer markets and on margin lending as a core
    complementary service. By promoting our integrated suite of
    solutions, we believe our clearing and margin lending activities
    will increase as our market share grows while the size of the
    direct access and online brokerage industry increases.
    Further expanding our client base in the institutional and
    retail brokerage markets.  As the brokerage
    industry has added a broader array of products and services and
    the operating margins in the industry have diminished, the
    profitability of the infrastructure services offered by many
    traditional institutional and retail brokers is under pressure.
    We believe this trend will favor our business model of
    cost-effectively providing dedicated infrastructure solutions to
    the broader brokerage community. Accordingly, we are expanding
    our focus on the traditional institutional and retail brokerage
    industry. Many institutional and retail brokers in the
    U.S. have outsourced their clearing functions, and we
    believe this trend is now increasing internationally, which
    creates opportunities for us on a global basis. We are also
    targeting these firms for our technology products and services.
    Expanding our client base in the algorithmic trading and
    hedge fund sectors.  Our technology products
    enable us to increasingly market our services to algorithmic
    traders and hedge funds. These sectors are among the most
    significant drivers of growth in the overall securities markets
    and we intend to increase our focus on these clients.
    Expanding our operations internationally.  We
    previously acquired a London-based clearing company with
    extensive experience in agency clearing operations in European
    securities markets and a Canadian clearing company that provides
    clearing services to the direct access, on-line discount and
    traditional retail markets in Canada. In the first quarter of
    2007 we opened our first Asian office in Hong Kong. We have used
    these platforms to increase significantly our international
    capabilities to clear securities transactions and market our
    technology products. We believe our ability to service clients
    throughout the North American and European securities markets
    will become more important as investors increasingly trade on a
    global basis, and we intend to expand our offering of technology
    products in the Asian markets in fiscal year 2007 and beyond. In
    addition, we intend to expand our margin lending business
    internationally.  
    Pursue accretive acquisitions.  Through our
    past acquisitions, we have grown internationally, expanded our
    product base and added additional correspondents. We intend to
    continue to pursue accretive acquisitions that will expand our
    technology product offerings, our clearing service capabilities
    and our client base.  Securities
    processing
    Clearing
    operations
  United
    States
   9




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Canada
  and/or
    United
    Kingdom
      Asia
    Execution
    routing services
   10




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Internet
    account portfolio information services
    Holding
    and safeguarding securities and cash deposits
    Securities
    lending and borrowing
    Proprietary
    trading
    Technology
    and data products
       11




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Institutional
    and active retail front-end trading software
      Global
    execution hub
   12




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Global
    data products
  tick-by-tick simple-to-use
    Key
    licensed technology and proprietary customization
    
    see critical information in real-time on a continuously updated
    basis;
    manage their buying power across different accounts containing
    diverse instruments such as equities, options and futures, and;
    receive highly customized reports relating to their activity.  non-U.S. customers, non-U.S. affiliates
  Sales and
    marketing
     13




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Strategic
    acquisitions
  Section 1-02 Regulation S-X.
         14




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Discontinued
    operations
  Accounting for the Disposal of Long-Lived Assets
  Competition
         15




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Intellectual
    property and other proprietary rights
      Government
    regulation
    cease-and-desist
       16




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Regulation
    of clearing activities
    Regulation
    of securities lending and borrowing
      Rules 8c-1
   17




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Regulation
    of internet activities
    Regulatory
    capital requirements
      30-day
 18




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on-site
      Margin
    risk management
   19




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State and
    provincial regulation
    Employees
      Item 1A.
    Risk
    Factors  Many factors could have an effect on PWIs financial
    condition, cash flows and results of operations. We are subject
    to various risks resulting from changing economic,
    environmental, political, industry, business and financial
    conditions. The principal factors are described below.
  Risks
    related to our business and our industry
  We
    face substantial competition from other securities and
    commodities processing and infrastructure firms, which could
    harm our financial performance and reduce our market
    share.
   20




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We
    depend on a limited number of clients for a significant portion
    of our clearing revenues.
    Our
    clearing operations could expose us to legal liability for
    errors in performing clearing functions and improper activities
    of our correspondents.
      Sharp
    decreases in short-term interest rates would negatively impact
    the profitability of our margin lending business.
   21




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Our
    margin lending business subjects us to credit risks and if we
    are unable to liquidate an investors securities when the
    margin collateral becomes insufficient, the profitability of our
    business may suffer.
    
    the pledged securities may not be actively traded;
    there may be an undue concentration of securities pledged; or
    a stop order may be issued with regard to pledged securities.      We
    rely, in part, on third parties to provide and support the
    software and systems we use to provide our services. Any
    interruption or cessation of service by these third parties
    could harm our business.
   22




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Our
    products and services, and the products and services provided to
    us by third parties, may infringe upon intellectual property
    rights of third parties, and any infringement claims could
    require us to incur substantial costs, distract our management
    or prevent us from conducting our business.
    If our
    clients account information is misappropriated, we may be
    held liable or suffer harm to our reputation.
      Any
    slowdown or failure of our computer or communications systems
    could subject us to liability for losses suffered by our clients
    or their customers.
    
    computer viruses or undetected errors in our internal software
    programs or computer systems;
    our inability to rapidly monitor all intraday trading activity; 23




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
    our inability to effectively resolve any errors in our internal
    software programs or computer systems once they are detected;
    heavy stress placed on our systems during peak trading times; or
    power or telecommunications failure, fire, tornado or any other
    natural disaster.    If our
    operational systems and infrastructure fail to keep pace with
    our anticipated growth, we may experience operating
    inefficiencies, client dissatisfaction and lost revenue
    opportunities.
      
    to improve our systems for operations, financial controls, and
    communication and information management;
    to refine our compliance procedures and enhance our compliance
    oversight; and
    to recruit, train, manage and retain our employees.    If we
    are unable to respond to the demands of our existing and new
    clients, our ability to reach our revenue goals or maintain our
    profitability could be diminished.
   24




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Our
    existing correspondents may choose to perform their own clearing
    services as their operations grow.
    Our
    ability to sell our services and grow our business could be
    significantly impaired if we lose the services of key
    personnel.
  and/or
  We may
    face risks associated with potential future acquisitions that
    could reduce our profitability or hinder our ability to
    successfully expand our operations.
    
    diversion of managements time and attention to the
    negotiation of the acquisitions;
    difficulties in assimilating acquired businesses, technologies,
    operations and personnel;
    the need to modify financial and other systems and to add
    management resources;
    assumption of unknown liabilities of the acquired businesses;
    unforeseen difficulties in the acquired operations and
    disruption of our ongoing business;
    dilution to our existing stockholders due to the issuance of
    equity securities;
    possible adverse short-term effects on our cash flows or
    operating results; and
    possible accounting charges due to impairment of goodwill or
    other purchased intangible assets.   25




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Restrictive
    covenants in our credit facilities may limit our ability to
    engage in certain transactions.
      We
    recently revised our operational strategy for our U.K.
    operations, and if it is not successful our financial results or
    growth prospects may be harmed.
    Our
    revenues may decrease due to declines in trading volume, market
    prices, liquidity of securities markets or proprietary trading
    activity.
    
    reduced trading activity;
    illiquid markets; 26




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
    declines in the market values of securities carried by our
    customers and correspondents;
    the failure of buyers and sellers of securities to fulfill their
    settlement obligations;
    reduced margin loan balances of investors; and
    increases in claims and litigation.      Our
    significant
    non-U.S. operations
    expose us to global exchange rate fluctuations that could impact
    our profitability.
      and/or
  General
    economic and political conditions and broad trends in business
    and finance that are beyond our control may contribute to
    reduced levels of activity in the securities markets, which
    could result in lower revenues from our business
    operations.
    
    the availability of short-term and long-term funding and capital;
    the level and volatility of interest rates;
    legislative and regulatory changes;    
    currency values and inflation; and
    national, state and local taxation levels affecting securities
    transactions.   27




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Our
    quarterly revenue and operating results are subject to
    significant fluctuations.
    
    changes in the proportion of clearing operations revenues and
    interest income;
    our lengthy sales and integration cycle with new correspondents;
    the gain or loss of business from a correspondent;
    reductions in per-transaction clearing fees;
    changes in bad debt expense from margin lending as compared to
    historical levels;
    changes in the rates we charge for margin loans, changes in the
    rates we pay for cash deposits we hold on behalf of our
    correspondents and their customers and changes in the rates at
    which we can invest such cash deposits;
    changes in the market price of securities and our ability to
    manage related risks;
    fluctuations in overall market trading volume;
    the relative success
    and/or
    failure of third party clearing competitors, many of which have
    increasingly larger resources than we have as a result of recent
    consolidation in our industry;
    the relative success
    and/or
    failure of third party technology competitors including, without
    limitation, competitors to our NEXA business;
    our ability to manage personnel, overhead and other expenses; and
    the amount and timing of capital expenditures.    period-to-period
  Our
    involvement in futures and options markets subjects us to risks
    inherent in conducting business in those markets.
    We may
    not be able to hedge our foreign exchange risk.
   28




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The
    securities and futures businesses are highly dependent on
    certain market centers that may be targets of
    terrorism.
    Risks
    related to government regulation
  All
    aspects of our business are subject to extensive government
    regulation. If we fail to comply with these regulations, we may
    be subject to disciplinary or other action by regulatory
    organizations, and our business may be harmed.
    
    sales methods;
    trade practices among broker-dealers;
    use and safekeeping of investors funds and securities;
    capital structure;
    margin lending;
    record keeping;
    conduct of directors, officers and employees; and
    supervision of investor accounts.     29




---



##### Table of Contents



non-U.S. businesses non-U.S. markets
  The
    regulatory environment in which we operate has experienced
    increasing scrutiny by regulatory authorities in recent years
    and further changes in legislation or regulations may affect our
    ability to conduct our business or reduce our
    profitability.
      If we
    do not maintain the capital levels required by regulations, we
    may be subject to fines, suspension, revocation of registration
    or expulsion by regulatory authorities.
       30




---



##### Table of Contents



Procedures
    and requirements of the USA PATRIOT Act may expose us to
    significant costs or penalties.
    Risks
    related to our corporate structure
  Our
    discontinued operations expose us to legal and other
    risks.
  
  Provisions
    in our certificate of incorporation and bylaws and under
    Delaware law may prevent or frustrate a change in control or a
    change in management that stockholders believe is
    desirable.
    
    a classified board of directors;
    limitations on the removal of directors;
    advance notice requirements for stockholder proposals and
    nominations; and
    the inability of stockholders to act by written consent or to
    call special meetings.   31




---



##### Table of Contents



Risks
    related to our requirements as a public company
  Our
    stockholders could be harmed if our management and larger
    stockholders use their influence in a manner adverse to other
    stockholders interests.
    The
    price of our common stock may be volatile.
    
    reductions in market prices or volume;    
    changes in securities or other government regulations;
    quarterly variations in operating results;
    our technological capabilities to accommodate any future growth
    in our operations or clients;
    announcements of technological innovations, new products,
    services, significant contracts, acquisitions or joint ventures
    by us or our competitors; and
    changes in financial estimates and recommendations by securities
    analysts or our failure to meet or exceed analyst estimates.    Our
    internal controls over financial reporting may not be effective
    and our independent auditors may not be able to certify as to
    their effectiveness, which could have a significant and adverse
    effect on our business and reputation.
   32




---



##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  Description
    of Property
    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    Information
      Price Range2006

High


LowQuarter ended June 30, 2006

$
20.44


$
17.21Quarter ended September 30,
    2006

$
19.59


$
15.90Quarter ending December 31,
    2006

$
27.81


$
18.16  33




---



##### Table of Contents



Holders
    Dividend
    Policy
      and/or
  PWIs
    Purchases of its Equity Securities
  Total Number of


Maximum Number (orShares Purchased as


Approximate Dollar Value)Total Number


Average Price


Part of Publicly


of Shares that May Yet beof Shares


Paid per Share


Announced Plans or


Purchased Under the PlansPeriod

Purchased(1)


(2)


Programs


or ProgramsOctober 1, 2006 through
    October 31, 2006













No publicly announced repurchase
    program in placeNovember 1, 2006 through
    November 30, 2006


27,238


$
22.46






No publicly announced repurchase
    program in placeDecember 1, 2006 through
    December 31, 2006













No publicly announced repurchase
    program in place     (1)
    
    Acquisitions of securities during the fourth quarter 2006 were
    pursuant to the terms of our 2000 Stock Incentive Plan and the
    terms of the equity-based awards made under those plans and
    consist solely of the surrender of restricted stock to pay
    required minimum income, Medicare and FICA tax withholding on
    the delivery of shares underlying restricted stock units.(2)
    
    The purchase price of a share of stock used for tax withholding
    is the amount of withholding paid per share used for that
    purpose, which is the market price of the stock on the delivery
    date of the stock underlying restricted stock units. 34




---



##### Table of Contents



Equity
    Compensation Plans
  Number of Securities to


Weighted-Averagebe Issued Upon Exercise


Exercise Price of


Number of Securitiesof Outstanding Options,


Outstanding Options,


Remaining AvailablePlan Category

Warrants and Rights(3)


Warrants and Rights


for Future IssuanceEquity Compensation Plans Approved
    by Security Holders(4)


1,839,698


$
15.44



929,286Equity Compensation Plans Not
    Approved by Security Holders










1,839,698


$
15.44



929,286   (3)
    
    Includes shares issuable for unvested restricted stock units.(4)
    
    Includes  shares issuable pursuant to the Penson Worldwide, Inc.
    Amended and Restated 2000 Stock Incentive Plan, of which there
    were 679,454 shares remaining available for future issuance
    and the Penson Worldwide, Inc. 2005 Employee Stock Purchase Plan
    of which there were 249,832 shares remaining available for
    future issuance.  Recent
    Sales of Unregistered Securities
  Rule 10b5-1 Rule 10b5-1
 35




---



##### Table of Contents



Stock
    Performance Graph
    Cumulative Total Return to Stockholders
    Penson Worldwide, Inc., NASDAQ Composite Index and NASDAQ
    Financial Stocks Index
    % Return to Stockholders, May 17, 2006 to December 29,
    2006
  
   36




---



##### Table of Contents



Item 6.
    Selected
    Financial Data    Year Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Consolidated statement of
    income dataTotal revenues

$
287,618


$
174,568


$
116,064


$
91,077


$
80,285Total expenses(1)


250,040



169,890



107,882



82,748



85,588Income (loss) from continuing
    operations before income taxes


37,578



4,678



8,182



8,329



(5,303
)Provision (benefit) for income
    taxes


13,299



1,951



1,489



503



(1,554
)Income (loss) from continuing
    operations


24,279



2,727



6,693



7,826



(3,749
)Income from discontinued
    operations, net of tax(2)


243



177



1,060



835



Net income (loss)

$
24,522


$
2,904


$
7,753


$
8,661


$
(3,749
)Earnings (loss) per
    share  basicEarnings (loss) per share from
    continuing operations

$
1.07


$
0.18


$
0.51


$
0.61


$
(0.30
)Earnings (loss) per share from
    discontinued operations


0.01



0.01



0.08



0.07



Earnings (loss) per share

$
1.08


$
0.19


$
0.59


$
0.68


$
(0.30
)Earning (loss) per
    share 
    dilutedEarnings (loss) per share from
    continuing operations

$
1.05


$
0.16


$
0.43


$
0.58


$
(0.30
)Earnings (loss) per share from
    discontinued operations


0.01



0.01



0.07



0.06



Earnings (loss) per share

$
1.06


$
0.17


$
0.50


$
0.64


$
(0.30
)Weighted average shares
    outstanding  basic and dilutedBasic


22,689



15,185



13,136



12,744



12,328Diluted


23,058



18,300



16,456



13,680



12,328     (1)
    
    Results from 2006 include $3.1 million of compensation
    expense related to the implementation of SFAS 123[R],
    Accordingly, 2006 results may not be comparable to prior periods.(2)
    
    Concurrent with our public offering, we split off certain
    non-core business operations into SAMCO Holdings, a newly formed
    company which gives effect to a capital contribution to SAMCO in
    an amount equal to the difference between the net book value of
    the division to be split off, as of such date, and the value of
    the 1,041,667 shares of our common stock to be exchanged in
    the split off. Except as otherwise indicated, financial
    information presented sets forth the results of operations and
    balance sheet data of the entities split off as 37




---



##### Table of Contents



discontinued operations. See Managements discussion
    and analysis of financial condition and results of
    operationsDiscontinued operations.  As of December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Consolidated balance sheet
    data:Cash and cash equivalents

$
103,054


$
99,506


$
35,155


$
18,434


$
26,045Total assets


4,644,390



3,578,881



2,342,844



1,893,714



1,010,716Notes payable


10,000



52,395



38,931



39,770



30,629Total stockholders equity


211,784



89,952



67,716



32,211



22,009   Item 7.
    Managements
    discussion and analysis of financial condition and results of
    operations  The following discussion and analysis should be read in
    conjunction with Part II, Item 6 Selected
    Financial Data and our audited consolidated financial
    statements and the related notes included elsewhere in this
    annual report on
    Form 10-K.
    This discussion contains forward-looking statements that involve
    risks and uncertainties. Our actual results could differ
    materially from those anticipated in the forward-looking
    statements as a result of certain factors including the risks
    discussed in Item 1A Risk factors Special
    Note Regarding Forward-Looking Statements and
    elsewhere in this annual report on
    Form 10-K.
  Overview
        Fiscal
    2006 Highlights
  
    In May 2006, we completed an initial public offering of
    7.2 million shares of common stock. Simultaneously, we
    converted all of our outstanding preferred stock to common stock.
    Concurrent with the IPO, we split off all SAMCO related
    operations.
    We entered into a new $75.0 million credit facility with a
    syndicate of lending institutions. 38




---



##### Table of Contents




    In January 2006, we completed the acquisition of CCS in a cash
    and stock transaction.
    In November 2006, we announced the acquisition of GHCO, a
    Chicago based futures and commodities clearing firm.
    In November 2006, we completed the acquisition of the clearing
    business of Schonfeld in exchange for shares of common stock.
    We expanded our stock loan conduit business.
    We improved the operations of our NEXA and PFSL businesses.  Initial
    Public Offering
    and/or
  Discontinued
    operations
  Accounting for the Disposal of
    Long-Lived Assets
     39




---



##### Table of Contents



Acquisition
    of CCS
    Acquisition
    of GHCO
    Acquisition
    of Schonfeld
    Financial
    overview
  Revenues
   40




---



##### Table of Contents



Expenses
  Employee
    compensation and benefits
    Interest
    expenses
    Other
    operating expenses
   41




---



##### Table of Contents



Profitability
    of services provided
   42




---



##### Table of Contents



Results
    of operations
    Year Ended December 312006


2005


2004


2003


2002Revenues:Revenues from clearing operations


27
%


34
%


54
%


64
%


69
%Technology revenues


4
%


4
%


3
%


1
%


Interest, gross


57
%


53
%


37
%


28
%


27
%Other revenues


12
%


9
%


6
%


7
%


4
%Total revenues


100
%


100
%


100
%


100
%


100
%Expenses:Employee compensation and benefits


28
%


34
%


35
%


35
%


24
%Floor brokerage exchange and
    clearance fees


7
%


8
%


14
%


17
%


19
%Communications and data processing


8
%


11
%


13
%


13
%


18
%Bad debt expenses


















16
%Interest expense on short-term
    obligations


31
%


27
%


12
%


7
%


10
%Occupancy and equipment


5
%


6
%


8
%


10
%


10
%Other expenses


7
%


9
%


9
%


7
%


8
%Interest expense on long-term debt


1
%


2
%


2
%


2
%


2
%Total expenses


87
%


97
%


93
%


91
%


107
%Income (loss) from continuing
    operations before income taxes


13
%


3
%


7
%


9
%


(7
)%Provision (benefit) for income
    taxes


5
%


1
%


1
%






(2
)%Income (loss) from continuing
    operations


8
%


2
%


6
%


9
%


(5
)%Income from discontinued
    operations, net of tax










1
%


1
%


Net income (loss)


9
%


2
%


7
%


10
%


(5
)%   Comparison
    of years ended December 31, 2006 and December 31,
    2005
  Overview
       43




---



##### Table of Contents



%Change fromAmount


Previous Year(In thousands)Revenues:Revenue from clearing operations

$
17,297



29.4Technology revenues


5,036



73.3Interest:Interest on asset based
    balances


28,872



36.7Interest on conduit
    borrows


41,026



442.9Money market


1,882



47.3Interest, gross


71,780



78.0Other revenue


18,937



112.7Total revenues


113,050



64.8Expenses:Employee compensation and benefits


20,467



34.5Floor brokerage, exchange and
    clearance fees


6,161



43.3Communications and data processing


4,188



21.1Occupancy and equipment


2,587



24.9Interest:Interest expense on liability
    based balances


4,979



13.0Interest on conduit
    loans


37,789



454.2Interest expense on short-term
    obligations


42,768



91.7Other expenses


4,151



25.4Interest expense on long-term debt


(172
)


(5.5
)Total expenses


80,150



47.2Income from continuing operations
    before income taxes

$
32,900



703.3   Revenues
   44




---



##### Table of Contents



Employee
    compensation and benefits
    Share-Based Payment Accounting for Stock Issued to Employees.
  Floor
    brokerage, exchange and clearance fees
    Communications
    and data processing
   45




---



##### Table of Contents



Occupancy
    and equipment
    Interest
    expenses on short-term obligations
    Other
    expenses
    Interest
    expense on long term debt
    Provision
    for income taxes
      Net
    income
    Comparison
    of years ended December 31, 2005 and December 31,
    2004
  Overview
   46




---



##### Table of Contents



47




---



##### Table of Contents



%Change fromAmount


Previous Year(In thousands)Revenues:Revenue from clearing operations

$
(4,012
)


(6.4
)Technology revenues


2,893



72.7Interest, gross


49,515



116.5Other revenue


10,108



151.0Total revenues


58,504



50.4Expenses:Employee compensation and benefits


18,388



45.0Floor brokerage, exchange and
    clearance fees


(1,656
)


(10.4
)Communications and data processing


4,706



31.0Occupancy and equipment


1,079



11.6Interest expense on short-term
    obligations


33,075



243.4Other expenses


5,625



52.6Interest expense on long-term debt


791



33.9Total expenses


62,008



57.5Income from continuing operations
    before income taxes

$
(3,504
)


(42.8
)   Revenues
    Employee
    compensation and benefits
    Floor
    brokerage, exchange and clearance fees
   48




---



##### Table of Contents



Communications
    and data processing
    Occupancy
    and equipment
      Interest
    expenses on short-term obligations
    Other
    expenses
    Interest
    expense on long term debt
    Income
    tax expense
    Income
    from continuing operations
    Income
    from discontinued operations, net of taxes
   49




---



##### Table of Contents



Net
    income
    Liquidity
    and capital resources
  Operating Liquidity
      Capital Resources 
     50




---



##### Table of Contents



(Rule 15c3-1), Rule 15c3-1, (Rule 15c3-3).
  Contractual
    obligations
    Less Than








More ThanContractual Obligations

Total


1 Year


13 Years


45 Years


5 Years(In thousands)Long-term debt obligations and
    accrued interest(1)

$
10,220


$
220


$
10,000


$



$
Capital lease obligations


6,467



3,156



3,311







Operating lease obligations


23,257



3,257



8,210



5,050



6,740Total

$
39,724


$
6,413


$
21,521


$
5,050


$
6,740     (1)
    
    The entire long-term debt balance is a revolving credit facility
    which the Company may pay down at any time, Accordingly, only
    interest accrued at December 31 has been included here.      Off-balance
    sheet arrangements
    Critical
    accounting policies
   51




---



##### Table of Contents



Revenue
    Recognition
      97-2, Software Revenue Recognition. percentage-of-completion SOP 97-2 81-1 (SOP 81-1) Accounting for Performance of Construction-Type and Certain
    Production Type Contracts Revenue Recognition SOP 98-1
  Software
    development
    Stock-based
    compensation
  Share-Based Payment,
 52




---



##### Table of Contents



Item 7A.
    Quantitative
    and qualitative disclosure about market risk       53




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K. page F-1.
  Quarterly
    results of operations
  Mar. 31,


Jun. 30,


Sep. 30,


Dec. 31,


Mar. 31,


Jun. 30,


Sep. 30,


Dec. 31,Quarter Ended

2005


2005


2005


2005


2006


2006


2006


2006(In thousands, except per share data)Revenues:Revenues from clearing operations

$
14,828


$
13,824


$
14,102


$
16,118


$
19,609


$
19,632


$
17,180


$
19,748Technology revenues


1,303



1,700



1,923



1,949



2,794



2,767



2,890



3,460Interest, gross


18,066



18,588



21,360



34,005



38,256



38,890



40,038



46,615Other revenues


3,227



3,528



4,199



5,848



8,446



9,046



8,684



9,563Total revenues


37,424



37,640



41,584



57,920



69,105



70,335



68,792



79,386Expenses:Employee compensation and
    benefits(1)


12,941



14,348



15,449



16,524



19,629



19,754



19,607



20,739Floor brokerage, exchange and
    clearance fees


4,261



4,015



3,196



2,758



4,966



6,182



5,265



3,978Communications and data processing


4,567



4,679



5,070



5,565



6,342



5,946



5,586



6,195Occupancy and equipment


2,386



2,504



2,569



2,949



3,100



3,332



3,346



3,217Interest expense on short-term
    obligations


8,825



8,715



8,982



20,139



22,398



21,232



19,030



26,769Other expenses


3,194



4,515



3,724



4,892



4,496



4,416



5,197



6,367Interest expense on long-term debt


697



879



686



861



1,162



911



539



339Total expenses


36,871



39,655



39,676



53,688



62,093



61,773



58,570



67,604Income (loss) from continuing
    operations before income taxes


553



(2,015
)


1,908



4,232



7,012



8,562



10,222



11,782Provision (benefit) for income taxes


221



(746
)


756



1,720



2,668



2,998



3,579



4,054Income (loss) from continuing
    operations


332



(1,269
)


1,152



2,512



4,344



5,564



6,643



7,728Income (loss) from discontinued
    operations, net of tax


(208
)


233



84



68



129



114



0



0Net income (loss)

$
124


$
(1,036
)

$
1,236


$
2,580


$
4,473


$
5,678


$
6,643


$
7,728Earnings (loss) per
    share  basic:Earnings (loss) per share from
    continuing operations

$
0.03


$
(0.08
)

$
0.08


$
0.17


$
0.29


$
0.25


$
0.27


$
0.31Earnings (loss) per share from
    discontinued operations


(0.02
)


0.01















0.01







Earnings (loss) per share

$
0.01


$
(0.07
)

$
0.08


$
0.17


$
0.29


$
0.26


$
0.27


$
0.31Earnings (loss) per
    share  diluted:Earnings (loss) per share from
    continuing operations

$
0.02


$
(0.06
)

$
0.06


$
0.13


$
0.24


$
0.25


$
0.26


$
0.30Earnings (loss) per share from
    discontinued operations


(0.01
)


0.01



0.01



0.01







0.01







Earnings (loss) per share

$
0.01


$
(0.05
)

$
0.07


$
0.14


$
0.24


$
0.26


$
0.26


$
0.30Weighted average shares
    outstanding  basic


13,259



15,177



15,181



15,188



15,208



21,773



25,034



25,131Weighted average shares
    outstanding  diluted


18,064



18,086



18,120



18,836



18,918



22,020



25,314



25,470     (1)
    
    Results from 2006 include $3.1 million of compensation
    expense related to the implementation of SFAS 123[R],
    Accordingly, 2006 results may not be comparable to prior periods.  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   54




---



##### Table of Contents



Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Section 404
    Compliance Project
  Form 10-K.
    Inherent
    Limitation of the Effectiveness of Internal Control
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant   55




---



##### Table of Contents



Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements.
  page F-1 Form 10-K.
  PageNumberReport of
    Independent Registered Public Accounting Firm


F-2Statements of
    Financial Condition


F-3Statements of
    Income


F-4Statements of
    Stockholders Equity


F-5Statements of Cash
    Flows


F-6Notes to the
    Consolidated Financial Statements


F-7   Financial Statement Schedules.
    Exhibit List.
   56




---



##### Table of Contents



Signatures      By:
    /s/  PHILIP
    A. PENDERGRAFT   Title:
    Chief Executive Officer      Signature

Title

Date/s/  ROGER
    J.
    ENGEMOEN, JR.Roger
    J. Engemoen, Jr.

Chairman

March 28, 2007/s/  PHILIP
    A.
    PENDERGRAFTPhilip
    A. Pendergraft

Chief Executive Officer
    (Principal Executive Officer)
    and Director

March 28, 2007/s/  DANIEL
    P. SONDaniel
    P. Son

President and Director

March 28, 2007/s/  KEVIN
    W. MCALEERKevin
    W. McAleer

Senior Vice President and Chief
    Financial Officer (Principal Financial
    and Accounting Officer)

March 28, 2007/s/  JOHN
    L. DREWJohn
    L. Drew

Director

March 28, 2007/s/  JAMES
    S. DYERJames
    S. Dyer

Director

March 28, 2007/s/  J.
    KELLY GRAYJ.
    Kelly Gray

Director

March 28, 2007/s/  WILLIAM
    D. GROSSWilliam
    D. Gross

Director

March 28, 2007/s/  DAVID
    JOHNSONDavid
    Johnson

Director

March 28, 2007/s/  THOMAS
    R. JOHNSONThomas
    R. Johnson

Director

March 28, 2007 57




---



##### Table of Contents



Signature

Title

Date/s/  DAVID
    M. KELLYDavid
    M. Kelly

Director

March 28, 2007/s/  DAVID
    REEDDavid
    Reed

Director

March 28, 2007/s/  RONALD
    G.
    STEINHARTRonald
    G. Steinhart

Director

March 28, 2007  58




---



##### Table of Contents



Index to
    consolidated financial statements
  Penson Worldwide, Inc.
    consolidated financial statements:Report of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Financial Statements:Statements of
    Financial Condition


F-3Statements of
    Income


F-4Statements of
    Stockholders Equity


F-5Statements of Cash
    Flows


F-6Notes to the
    Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



Report of
    independent registered public accounting firm             
  
  
 F-2




---



##### Table of Contents



Penson
    Worldwide, Inc.



Consolidated
    Statements of Financial Condition  December 31,2006


2005(In thousands,except par values)ASSETSCash and cash equivalents

$
103,054


$
99,506Cash and securities 
    segregated under Federal and other regulations


577,336



367,036Receivable from broker-dealers and
    clearing organizations


338,872



250,668Receivable from customers, net


1,239,170



978,747Receivable from correspondents


117,343



89,166Securities borrowed


1,783,403



1,372,923Securities owned, at market value


172,277



126,210Deposits with clearing
    organizations


202,033



134,310Property and equipment, net


18,698



14,846Assets held for disposal






63,267Other assets


92,204



82,202Total assets

$
4,644,390


$
3,578,881LIABILITIES AND
    STOCKHOLDERS EQUITYPayable to broker-dealers and
    clearing organizations

$
169,749


$
179,558Payable to customers


2,214,987



1,287,378Payable to correspondents


260,029



179,774Short-term bank loans


60,186



115,922Notes payable


10,000



52,395Securities loaned


1,589,395



1,532,223Securities sold, not yet purchased


60,124



36,795Liabilities held for disposal






52,825Accounts payable, accrued and
    other liabilities


68,136



52,059Total liabilities


4,432,606



3,488,929Commitments and contingenciesSTOCKHOLDERS
    EQUITYPreferred stock, $0.01 par
    value, 10,000 shares authorized; none and 3,596 shares
    issued and outstanding as of December 31, 2006 and 2005,
    respectively






34,680Common stock, $0.01 par
    value, 100,000 shares authorized at December 31, 2006;
    26,154 issued and 25,078 outstanding as of December 31,
    2006; 15,180 issued and outstanding as of December 31, 2005


262



152Additional paid-in capital


188,219



38,090Accumulated other comprehensive
    income


2,159



1,990Retained earnings


39,562



15,040Treasury stock, at cost;
    1,076 shares at December 31, 2006; none at
    December 31, 2005


(18,418
)


Total stockholders equity


211,784



89,952Total liabilities and
    stockholders equity

$
4,644,390


$
3,578,881    F-3




---



##### Table of Contents



Penson
    Worldwide, Inc.



Consolidated
    Statements of Income  Year Ended December 31,2006


2005


2004(In thousands, except per share data)RevenuesRevenues from clearing operations

$
76,169


$
58,872


$
62,884Technology revenues


11,911



6,875



3,982Interest, gross


163,799



92,019



42,504Other


35,739



16,802



6,694287,618



174,568



116,064ExpensesEmployee compensation and benefits


79,729



59,262



40,874Floor brokerage, exchange and
    clearance fees


20,391



14,230



15,886Communications and data processing


24,069



19,881



15,175Occupancy and equipment


12,995



10,408



9,329Interest expense on short-term
    obligations


89,429



46,661



13,586Other expenses


20,476



16,325



10,700Interest expense on long-term debt


2,951



3,123



2,332250,040



169,890



107,882Income from continuing operations
    before income taxes


37,578



4,678



8,182Income tax expense


13,299



1,951



1,489Income from continuing operations


24,279



2,727



6,693Income from discontinued
    operations, net of tax expense of $156, $114 and $684
    respectively


243



177



1,060Net income

$
24,522


$
2,904


$
7,753Earnings per share-basic:Earnings per share from continuing
    operations

$
1.07


$
0.18


$
0.51Earnings per share from
    discontinued operations


0.01



0.01



0.08Net income per share

$
1.08


$
0.19


$
0.59Earnings per share-diluted:Earnings per share from continuing
    operations

$
1.05


$
0.16


$
0.43Earnings per share from
    discontinued operations


0.01



0.01



0.07Net income per share

$
1.06


$
0.17


$
0.50Weighted average
    shares  basic


22,689



15,185



13,136Weighted average
    shares  diluted


23,058



18,300



16,456    F-4




---



##### Table of Contents



Penson
    Worldwide, Inc.



Consolidated
    Statements of Stockholders Equity  AccumulatedPreferred








Additional





Other





TotalStock


Common Stock


Paid-In


Treasury


Comprehensive


Retained


StockholdersAmount


Shares


Amount


Capital


Stock


Income


Earnings


Equity(In thousands)Balance, December 31, 2003

$




12,895


$
129


$
27,060


$



$
639


$
4,383


$
32,211Net income


























7,753



7,753Sale of preferred stock


24,750



























24,750Foreign currency translation
    adjustments, net of tax of $779






















1,209







1,209Issuance of common stock






114



1



646















647Issuance of common stock due to
    acquisition






250



3



1,143















1,146Balance, December 31, 2004


24,750



13,259



133



28,849







1,848



12,136



67,716Net income


























2,904



2,904Sale of preferred stock


9,930



























9,930Foreign currency translation
    adjustments, net of tax of $91






















142







142Issuance of common stock, net














10















10Conversion of convertible notes






1,921



19



9,231















9,250Balance, December 31, 2005


34,680



15,180



152



38,090







1,990



15,040



89,952Net income


























24,522



24,522Proceeds from initial public
    offering






7,197



72



114,080















114,152Direct costs of capital raised














(3,074
)














(3,074
)Foreign currency translation
    adjustments, net of tax of $109






















169







169Preferred stock converted into
    common stock


(34,680
)


3,526



35



34,645















Repurchase of treasury stock, at
    cost






(1,076
)


1



(1
)


(17,708
)










(17,708
)Stock-based compensation expense






113







3,120



(710
)










2,410Exercise of stock options






75



1



348















349Purchases of stock under the
    Employee Stock Purchase Plan






63



1



1,011















1,012Balance, December 31, 2006

$




25,078


$
262


$
188,219


$
(18,418
)

$
2,159


$
39,562


$
211,784    F-5




---



##### Table of Contents



Penson
    Worldwide, Inc.



Consolidated
    Statements of Cash Flows  Year Ended December 31,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net income

$
24,522


$
2,904


$
7,753Income from discontinued operations


(243
)


(177
)


(1,060
)Adjustments to reconcile net
    income to net cash provided by (used in) operating activities:Depreciation and amortization


11,321



6,995



4,877Deferred income taxes


1,625







Stock based compensation


3,120







Operating activities from
    discontinued operations


243



1,273



(2,175
)Changes in operating assets and
    liabilities:Cash and securities 
    segregated under Federal and other regulations


(210,300
)


266,836



(199,672
)Net receivable/payable with
    customers


667,186



(15,543
)


(325,472
)Net receivable/payable with
    correspondents


52,078



(49,197
)


81,277Securities borrowed


(410,480
)


(990,799
)


134,100Securities owned


(46,067
)


(12,570
)


31,713Deposits with clearing
    organizations


(67,723
)


(31,894
)


(41,993
)Other assets


(6,881
)


(17,799
)


(26,909
)Net receivable/payable with broker
    dealers and clearing organizations


(98,013
)


(56,932
)


(19,299
)Securities loaned


57,172



978,245



202,533Securities sold, not yet purchased


23,329



28,241



8,286Accounts payable, accrued and
    other liabilities


13,341



12,471



14,657Net cash provided by (used in)
    operating activities


14,230



122,054



(131,384
)Cash flows from investing
    activities:Business combinations, net of cash
    acquired


(4,536
)


(1,000
)


(3,566
)Purchase of property and
    equipment, net


(12,647
)


(14,058
)


(5,410
)Investing activities from
    discontinued operations






(805
)


(62
)Net cash used in investing
    activities


(17,183
)


(15,863
)


(9,038
)Cash flows from financing
    activities:Proceeds from notes payable


95,300



31,000



10,000Repayments of notes payable


(137,695
)


(8,286
)


(10,839
)Net borrowing on short-term bank
    loans


(55,736
)


(74,636
)


131,376Exercise of stock options


349







Excess tax benefit on exercise of
    stock options


4







Purchase of treasury stock


(7,976
)






Issuance of preferred stock






9,930



24,750Proceeds from initial public
    offering


114,152







Direct costs of capital raised


(3,074
)






Issuance of common stock, net


1,008



10



647Net cash provided by (used in)
    financing activities


6,332



(41,982
)


155,934Effect of exchange rates on cash


169



142



1,209Increase in cash and cash
    equivalents


3,548



64,351



16,721Cash and cash equivalents at
    beginning of period


99,506



35,155



18,434Cash and cash equivalents at end
    of period

$
103,054


$
99,506


$
35,155Supplemental cash flow disclosures:Interest payments

$
12,457


$
2,154


$
2,278Income tax payments

$
9,408


$
12,399


$
5,300Non-cash financing activity:Distribution of net assets of
    discontinued operations

$
(10,442
)

$



$
    F-6




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial Statements
 (In thousands, except per share data or where noted)
  1.
    Basis of
    Presentation  Organization and Business
    Initial public offering
  2.
    Summary
    of significant accounting policies  Securities Transactions
  Securities Lending Activities
  Reverse Repurchase and Repurchase Agreements
 F-7




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Revenue Recognition
    97-2, Software Revenue Recognition. percentage-of-completion SOP 97-2 81-1 (SOP 81-1) Accounting for Performance of Construction-Type and Certain
    Production Type Contracts Revenue Recognition
  Income Taxes
  Property and Equipment
  Intangibles Goodwill and Other Intangible Assets
 F-8




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   Operating Leases
  Stock-Based Compensation Share-Based Payment Accounting
    for Stock Issued to Employees.
  Managements Estimates and Assumptions
  Cash and Cash Equivalents
  Securities owned and securities sold, not yet
    purchased
  Fair Value of Financial Instruments
  Allowance for Doubtful Accounts account-by-account
 F-9




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Software Costs and Expenses 98-1 Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use.
  Net Income Per Share
  Foreign Currency Translation Adjustments Foreign Currency Translation
  Costs Associated with Disposal Activities
  Reclassifications
  Recent
    Accounting Pronouncements
  The Fair Value Option for Financial
    Assets and Financial Liabilities  Including an
    Amendment of FASB Statement No. 115 instrument-by-instrument
 F-10




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      Financial Statements  Considering
    the Effects of Prior Year Misstatements when Quantifying
    Misstatements in Current Year Financial Statements beginning-of-year
   F-11




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   3.
    Discontinued
    operations  Accounting for the Disposal of
    Long-Lived Assets
  Year Ended December 31,2006


2005


2004(In thousands)Revenues

$
9,565


$
26,319


$
28,443Costs and expenses


9,166



26,028



26,699Income before income taxes


399



291



1,744Income taxes


156



114



684Income from discontinued Operations

$
243


$
177


$
1,060     Assets held for disposal:Cash and cash equivalents

$
3,223Securities owned


48,209Other assets


11,835Liabilities held for disposal:Payable to broker-dealers and
    clearing Organizations


42,609Other liabilities

$
10,216   4.
    Acquisitions  Computer
    Clearing Services, Inc.
    Acquisition
    of the clearing business of Schonfeld Securities,
    LLC
   F-12




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    5.
    Computation
    of net income per share  Net income
    Per Share.
  Year Ended December 31,2006


2005


2004Basic:Income from continuing operations

$
24,279


$
2,727


$
6,693Income from discontinued
    operations, net


243



177



1,060Basic net income

$
24,522


$
2,904


$
7,753Diluted:Income from continuing operations

$
24,279


$
2,727


$
6,693Interest adjustment for
    convertible debt, converted June 30, 2005






226



450Income from continuing
    operations  diluted


24,279



2,953



7,143Discontinued operations


243



177



1,060Diluted net income

$
24,522


$
3,130


$
8,203Weighted average common shares
    outstanding  Basic


22,689



15,185



13,136Weighted average shares on
    convertible debt










1,917Assumed conversion of
    Series A and Series B preferred stock






2,942



1,230Incremental shares from
    outstanding stock options


169



173



173Incremental shares from non-vested
    restricted stock units


130







Shares issuable


70







Weighted average common shares and
    common share equivalents  Diluted


23,058



18,300



16,456Basic earnings per common share:Before cumulative effect of
    discontinued operations

$
1.07


$
0.18


$
0.51Discontinued operations


0.01



0.01



0.08Basic earnings per common share

$
1.08


$
0.19


$
0.59Diluted earnings per common share:Before cumulative effect of
    discontinued operations

$
1.05


$
0.16


$
0.43Discontinued operations


0.01



0.01



0.07Diluted earnings per common share

$
1.06


$
0.17


$
0.50  F-13




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  6.
    Segregated
    assets  Rule 15c3-3 Rule 15c3-3.
  7.
    Receivable
    from and payable to broker-dealers and clearing
    organizations    December 31,2006


2005Receivable:Securities failed to deliver

$
241,108


$
201,727Receivable from clearing
    organizations


97,764



48,941$
338,872


$
250,668Payable:Securities failed to receive

$
102,238


$
140,325Payable to clearing organizations


67,511



39,233$
169,749


$
179,558     8.
    Receivable
    from and payable to customers and correspondents   F-14




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   9.
    Securities
    owned and securities sold, not yet purchased    December 31,2006


2005Securities Owned:Corporate

$
38,934


$
15,157Certificates of deposit and term
    deposits


25,355



12,106U.S. Federal, State and
    municipal


28,049



41,161Canadian government obligations


79,939



57,786$
172,277


$
126,210Securities Sold, Not Yet Purchased:Corporate

$
19,739


$
2,842Canadian government obligations


40,385



33,549U.S. Federal, State and
    Municipal






404$
60,124


$
36,795   10.
    Reverse
    repurchase and repurchase agreements    11.
    Property
    and equipment    December 31,2006


2005Equipment

$
16,895


$
13,079Software


22,690



17,880Furniture


2,531



1,637Leasehold improvements


4,382



4,147Other


1,459



81547,957



37,558Less accumulated depreciation


29,259



22,712Property and equipment, net

$
18,698


$
14,846  F-15




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    12.
    Short-term
    bank loans    13.
    Notes
    payable    December 31,2006


2005Bank term note with a variable
    rate of interest that approximated 7.75% at December 31,
    2005; paid in full in May, 2006

$



$
33,407Bank credit line up to
    $75 million, unsecured, with a variable rate of interest
    that approximated 8.6% at December 31, 2006. Payable in
    full in May, 2009


10,000



Note payable to Service Lloyds
    Insurance Company with interest at 8% at December 31, 2005;
    paid in full in May, 2006






1,000Note payable to a vendor with a
    variable rate of interest that approximated 7.25% at
    December 31, 2005; paid in full in May, 2006






2,988Bank term note with a variable
    rate of interest that approximated 6.3% at December 31,
    2005; paid in full in May, 2006






15,000$
10,000


$
52,395       Amount2007

$
2008


2009


10,000$
10,000  F-16




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  14.
    Stockholders
    Equity    Preferred


Common


TreasuryStock


Stock


StockBalance, December 31, 2003






12,895



Sale of preferred stock


2,657







Issuance of common stock






364



Balance, December 31, 2004


2,657



13,259



Sale of preferred stock


939







Conversion of convertible notes






1,921



Balance, December 31, 2005


3,596



15,180



Proceeds from initial public
    offering






7,197



Preferred stock converted into
    common stock


(3,596
)


3,526



Repurchase of treasury stock, at
    cost






(1,076
)


1,076Stock-based compensation expense






113



Purchases under the Employee Stock
    Purchase Plan






63



Exercise of stock options






75



Balance, December 31, 2006






25,078



1,076   Private
    placements of Preferred and Common Shares
      Preferred
    Conversion
    Additional
    Paid-In Capital
   F-17




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   Accumulated
    Other Comprehensive Income
      Year Ended December 31,2006


2005


2004Net income

$
24,522


$
2,904


$
7,753Foreign currency translation gain


169



142



1,209Comprehensive income

$
24,691


$
3,046


$
8,962     Year Ended December 31,2006


2005


2004Canadian
    DollarsIncome statement


0.88



0.84



0.77Balance sheet


0.86



0.86



0.84British PoundsIncome statement


1.92



1.89



1.93Balance sheet


1.96



1.72



1.92     Dividends
    15.
    Financial
    instruments with off-balance sheet risk       F-18




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
         16.
    Related
    party transactions      17.
    Employee
    benefit plan    18.
    Stock-based
    compensation       F-19




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      Stock
    options
      Year EndedDecember 31,2006Weighted-average grant date fair
    value

$
4.82Weighted average assumptions used:Expected volatility


20.0
%Expected term (in years)


4.70Risk-free interest rate


5.0
%Expected dividend yield


   .
   F-20




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
     WeightedWeighted


Average


AggregateNumber of


Average


Contractual


IntrinsicShares


Exercise Price


Term


Value(In whole dollars)


(In years)Outstanding, December 31, 2004


227


$
4.04



7.16



Activity














Outstanding, December 31, 2005


227



4.04



6.16



Granted


1,145



17.03







Exercised


(75
)


4.67







Forfeited


(17
)


17.13







Outstanding, December 31, 2006


1,280


$
15.44



6.43


$
15,320Options exercisable at
    December 31, 2006


303


$
10.34



4.59


$
5,181Options expected to vest at
    December 31, 2006


868


$
17.03



6.35


$
9,016     Restricted
    Stock Units
    Weighted


WeightedAverage


Average


AggregateNumber of


Grant Date


Contractual


IntrinsicUnits


Fair Value


Term


Value(In whole dollars)


(In years)Outstanding, December 31, 2004














Granted


64


$








Outstanding, December 31, 2005


64











Granted


640



14.64







Vested and issued


(122
)


13.57







Terminated, cancelled or expired


(23
)


16.07







Outstanding, December 31, 2006


559


$
14.44



3.2


$
15,335      F-21




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   Employee
    stock purchase plan
      Prior
    Period Pro Forma Presentations
    19.
    Commitments
    and contingencies    Capital


OperatingLeases


Leases2007

$
3,156


$
3,2572008


2,592



3,1332009


708



2,6862010


11



2,3912011






2,5252012 and thereafter






9,265$
6,467


$
23,257    F-22




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
          20.
    Income
    taxes    Year Ended December 31,2006


2005


2004Income tax expenseCurrent

$
11,830


$
2,065


$
2,173Deferred


1,625







Total

$
13,455


$
2,065


$
2,173Income tax expenseContinuing operations

$
13,299


$
1,951


$
1,489Discontinued operations


156



114



684$
13,455


$
2,065


$
2,173     Year Ended December 31,2006


2005


2004Federal statutory income tax rate


35.0
%


35.0
%


35.0
%NOL carryforward










Foreign taxes


(0.1
)


5.9



3.2State and local income taxes


3.0



.7



3.6Other, net


1.6







2.9Change in valuation allowance due
    to NOL utilization


(4.1
)






(22.8
)35.4
%


41.6
%


21.9
%  F-23




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Deferred
    income taxes consist of the following:
  December 31,2006


2005Current deferred taxes:Bad debt allowance

$
185


$
1,835NOL carryforward






1,730Prepaid assets


(241
)


(46
)(56
)


3,519Less valuation allowance






(1,573
)Total

$
(56
)

$
1,946Non-current deferred taxes:Fixed asset basis differences

$
207


$
275Intangible assets


1,213



776Other


31



5Total

$
1,451


$
1,056Total

$
1,395


$
3,002    F-24




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   21.
    Segment
    information    UnitedDecember 31, 2006

States


Canada


Other


ConsolidatedRevenue

$
213,724


$
58,591


$
15,303


$
287,618Income (loss) before tax


26,062



12,842



(1,326
)


37,578Income from discontinued operations


243











243Net income (loss)


17,509



8,390



(1,377
)


24,522Segment assets


3,745,876



684,682



213,832



4,644,390Intangibles


22,738



605







23,343Capital expenditures


9,844



1,451



1,352



12,647Depreciation and amortization


6,585



1,619



590



8,794Amortization of intangibles


2,527











2,527   UnitedDecember 31, 2005

States


Canada


Other


ConsolidatedRevenue

$
121,693


$
41,154


$
11,721


$
174,568Income (loss) before tax


5,410



5,679



(6,411
)


4,678Income from discontinued operations


177











177Net income (loss)


5,669



3,646



(6,411
)


2,904Segment assets


2,820,458



580,286



178,137



3,578,881Intangibles


7,928



538







8,466Capital expenditures


11,934



1,313



811



14,058Depreciation and amortization


3,392



1,088



375



4,855Amortization of intangibles


2,140











2,140   UnitedDecember 31, 2004

States


Canada


Other


ConsolidatedRevenue

$
83,352


$
25,978


$
6,734


$
116,064Income (loss) before tax


5,711



3,792



(1,321
)


8,182Income from discontinued operations


1,060











1,060Net income (loss)


6,951



2,159



(1,357
)


7,753Segment assets


1,783,286



481,075



78,483



2,342,844Intangibles


7,675



538







8,213Capital expenditures


2,598



1,713



1,099



5,410Depreciation and amortization


3,037



625



143



3,805Amortization of intangibles


1,072











1,072   22.
    Regulatory
    requirements  Rule 15c3-1), Rule 15c3-1, (Rule 15c3-3).
 F-25




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      23.
    Guarantees  Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others,
  Exchange
    member guarantees
    24.
    Condensed
    Financial Statements of Penson Worldwide, Inc. (parent
    only)   F-26




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Financial Condition
  December 31,2006


2005AssetsCash and cash equivalents

$
5


$
19Receivable from affiliates


62,806



56,612Property and equipment, net


6,827



5,090Investment in subsidiaries


158,651



48,705Other assets


2,242



4,445Total assets

$
230,531


$
114,871Liabilities and
    stockholders equityNotes payable

$
10,000


$
18,988Accounts payable, accrued and
    other liabilities


8,747



5,931Total liabilities


18,747



24,919Total stockholders equity


211,784



89,952Total liabilities and
    stockholders equity

$
230,531


$
114,871   Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Income
  Year Ended December 31,2006


2005


2004Revenues

$
2,805


$
804


$
386ExpensesEmployee compensation and benefits


397



180



165Other expenses


4,692



2,136



1,340Interest expense on long-term debt


1,643



1,036



1,3286,732



3,352



2,833Loss before income taxes and
    equity in earnings of subsidiaries


(3,927
)


(2,548
)


(2,447
)Income tax benefit


(8,782
)


(9,595
)


(7,562
)Income before equity in earnings
    of subsidiaries


4,855



7,047



5,115Equity in earnings of subsidiaries


19,667



(4,143
)


2,638Net income

$
24,522


$
2,904


$
7,753  F-27




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Cash Flow
  Year Ended December 31,2006


2005


2004Cash flows from operating
    activities:Net income

$
24,522


$
2,904


$
7,753Adjustments to reconcile net
    income to net cash provided by (used in) operating activities:Depreciation and amortization


2,564



964



483Deferred income taxes


1,625







Stock based compensation


3,120







Changes in operating assets and
    liabilities:Net receivable/payable with
    affiliates


(6,194
)


(28,420
)


(26,772
)Other assets


2,203



(1,208
)


(86
)Accounts payable, accrued and
    other Liabilities


1,191



3,667



1,387Net cash provided by (used in)
    operating Activities


29,031



(22,093
)


(17,235
)Cash flows from investing
    activities:Purchase of property and
    equipment, net


(4,301
)


(4,651
)


(751
)Decrease (increase) in investment
    in subs


(120,388
)


3,911



(3,481
)Net cash used in investing
    activities


(124,689
)


(740
)


(4,232
)Cash flows from financing
    activities:Proceeds from notes payable


95,300



15,000



1,500Repayments of notes payable


(104,288
)


(2,236
)


(6,637
)Exercise of stock options


349







Excess tax benefit on exercise of
    stock options


4







Purchase of treasury stock


(7,976
)






Issuance of preferred stock






9,930



24,750Proceeds from initial public
    offering


114,152







Direct costs of capital raised


(3,074
)






Issuance of common stock, net


1,008



10



647Net cash provided by financing
    activities


95,475



22,704



20,260Effect of exchange rates on cash


169



142



1,209Increase (decrease) in cash and
    cash equivalents


(14
)


13



2Cash and cash equivalents at
    beginning of period


19



6



4Cash and cash equivalents at end
    of period

$
5


$
19


$
6Supplemental cash flow disclosures:Interest payments

$
982


$
1,127


$
1,283Income tax payments

$
6,922


$
61


$
596  F-28




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  25.
    Subsequent
    events   F-29




---



##### Table of Contents



INDEX TO
    EXHIBITS
  Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date1
.1

Form of Underwriting Agreement

S-1/A

333-127385


1
.1

5/9/062
.1

Stock Purchase Agreement by and
    among SAI Holdings, Inc., Computer Clearing Services, Inc., and
    the Selling Stockholders dated May 12, 2005, as amended
    July 8, 2005

S-1

333-127385


2
.1

8/10/052
.2

Asset Purchase Agreement by and
    among SAI Holdings, Inc., Computer Clearing Services, Inc., and
    the Computer Clearing Services, Inc. Stockholders dated
    January 31, 2006

S-1/A

333-127385


2
.2

3/21/062
.3

Asset Purchase Agreement by and
    between SAI Holdings, Inc. and Schonfeld Securities, LLC, dated
    as of November 20, 2006

8-K

001-32878


2
.1

11/21/062
.4

Purchase Agreement by and among
    Goldenberg Hehmeyer & Co. and Goldenberg LLC, Hehmeyer
    LLC, GHCO Partners LLC, GH Traders LLC, each of the Principals
    listed on the signature pages thereto and SAI Holdings, Inc.,
    GHP1, Inc., GHP2, LLC and Christopher Hehmeyer in his capacity
    as Sellers Representative

8-K

001-32878


2
.1

11/7/063
.1

Form of Amended and Restated
    Certificate of Incorporation of Penson Worldwide, Inc.

S-1/A

333-127385


3
.1

5/1/063
.2

Form of Amended and Restated
    Bylaws of Penson Worldwide, Inc.

S-1/A

333-127385


3
.2

4/24/064
.1

Specimen certificate for shares of
    Common Stock

S-1

333-127385


4
.1

4/24/064
.2+

Amended and Restated Registration
    Rights Agreement between Roger J. Engemoen, Jr., Philip A.
    Pendergraft and Daniel P. Son and Penson Worldwide, Inc. dated
    November 30, 2000

S-1

333-127385


4
.2

8/10/054
.3

Amended and Restated
    Investors Rights Agreement between TCV V, L.P., TCV
    Member Fund, L.P., Penson Worldwide, Inc., and the Company
    Subsidiaries dated September 30, 2005

S-1/A

333-127385


4
.3

10/19/0510
.1+

Penson Worldwide, Inc. Amended and
    Restated 2000 Stock Incentive Plan

S-1/A

333-127385


10
.1

4/24/0610
.2+

Penson Worldwide, Inc. 2005
    Employee Stock Purchase Plan

S-1/A

333-127385


10
.2

4/24/0610
.3

1700 Pacific Avenue Office Lease
    by and between F/P/D Master Lease, Inc. and Penson Financial
    Services, Inc. (f/k/a Service Asset Management Company) dated
    May 20, 1998 as amended July 16, 1998,
    February 17, 1999, September 20, 1999,
    November 30, 1999, May 25, 2000 and January 9,
    2001

S-1

333-127385


10
.3

8/10/0510
.4

Lease of Premises between Downing
    Street Holdings (330 Bay St), Inc. and Penson Financial Services
    Canada, Inc. (one of our subsidiaries) dated September 17,
    2002

S-1

333-127385


10
.4

8/10/0510
.5

Offer to Lease between Penson
    Financial Services Canada, Inc. and 360 St-Jacques Nova Scotia
    Company dated October 14, 2003

S-1

333-127385


10
.5

8/10/0510
.6

Lease agreement between Derwent
    Valley London Limited, Derwent Valley Central Limited, Penson
    Financial Services Limited, and Penson Worldwide, Inc. effective
    August 11, 2005

S-1

333-127385


10
.6

8/10/0510
.7

Amended and Restated Loan
    Agreement by and between SAI Holdings, Inc. (f/k/a Service Asset
    Investments, Inc.) and Guaranty Bank (f/k/a Guaranty Federal
    Bank, F.S.B.), dated April 30, 2001, as amended
    March 24, 2005 and May 6, 2005

S-1

333-127385


10
.7

8/10/05




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.8

Fifth Amended and Restated Stock
    Pledge Agreement by and between SAI Holdings, Inc. (f/k/a
    Service Asset Investments, Inc.) and Guaranty Bank (f/k/a
    Service Asset Investments, Inc.), dated October 4, 2004, as
    reaffirmed by the Reaffirmation of Stock Pledge Agreements dated
    March 24, 2005

S-1

333-127385


10
.8

8/10/0510
.9+

Fifth Amended and Restated
    Guaranty Agreements in connection with the Amended and Restated
    Loan Agreement by and between SAI Holdings, Inc. (f/k/a Service
    Asset Investments, Inc.) and Guaranty Bank (f/k/a Service Asset
    Investments, Inc.), by Daniel P. Son, Philip A. Pendergraft,
    William D. Gross, and Roger J. Engemoen, Jr. as Guarantors,
    all dated December 31, 2002, as reaffirmed by the Eleventh
    Amendment to the Amended and Restated Loan Agreement dated
    March 24, 2005

S-1

333-127385


10
.9

8/10/0510
.10

Credit Agreement, dated as of
    May 26, 2006 among Penson Worldwide, Inc., Guaranty Bank,
    as Administrative Agent, Swing Line Lender, Arranger and Line of
    Credit Issuer, Wachovia Bank, National Association, as
    Documentation Agent, and the other lenders party thereto

10-Q

001-32878


10
.1

8/11/0610
.11

Remote Processing Agreement
    between Penson Worldwide, Inc. and SunGard Data Systems Inc.
    dated July 10, 1995, as amended September 13, 1996 and
    August 1, 2002

S-1/A

333-127385


10
.11

8/10/0510
.12

Form of SAMCO Reorganization
    Agreement by and between Penson Worldwide, Inc., SAI Holdings,
    Inc. and Penson Financial Services, Inc. and SAMCO Capital
    Markets, Inc. and SAMCO Holdings, Inc.

S-1/A

333-127385


10
.12

5/1/0610
.13

Form of Transition Services
    Agreement by and between SAMCO Holdings, Inc. and Penson
    Worldwide, Inc.

S-1/A

333-127385


10
.13

5/1/0610
.14+

Employment Letter Agreement
    between the Company and David Henkel dated January 16, 2002

S-1

333-127385


10
.14

8/10/0510
.15+

Employment Letter Agreement
    between the Company and Andrew Koslow dated August 26, 2002

S-1

333-127385


10
.15

8/10/0510
.16+

Form of Indemnification Agreement
    entered into between Penson Worldwide, Inc. and its officers and
    directors

S-1

333-127385


10
.16

8/10/0510
.17

Thirteenth Amendment to Amended
    and Restated Loan Agreement by and between SAI Holdings, Inc.
    (f/k/a Service Asset Investments, Inc.) and Guaranty Bank (f/k/a
    Guaranty Federal Bank, F.S.B.), dated September 19, 2005

S-1/A

333-127385


10
.17

9/23/0510
.18

Fourteenth Amendment to Amended
    and Restated Loan Agreement by and between SAI Holdings, Inc.
    (f/k/a Service Asset Investments, Inc.) and Guaranty Bank (f/k/a
    Guaranty Federal Bank, F.S.B.), dated September 30, 2005

S-1/A

333-127385


10
.18

10/19/0510
.19

Fifteenth Amendment to Amended and
    Restated Loan Agreement and Waiver by and between SAI Holdings,
    Inc. (f/k/a Service Asset Investments, Inc.) and Guaranty Bank,
    dated December 28, 2005

S-1/A

333-127385


10
.19

3/21/0610
.20

Promissory Note by and between the
    Company and JPMorgan Chase Bank, N.A. dated December 30,
    2005

S-1/A

333-127385


10
.20

3/21/0610
.21

Registration Rights Agreement by
    and between Penson Worldwide, Inc. and Schonfeld Securities,
    LLC, dated as of November 20, 2006

8-K

001-32878


10
.1

3/21/06




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.22

Stockholders Agreement
    effective as of November 20, 2006 between Penson Worldwide,
    Inc. and Schonfeld Securities, LLC

8-K

001-32878


10
.2

11/21/0610
.23

Guaranty Agreement made as of
    November 20, 2006 by Schonfeld Group Holdings LLC in favor
    of SAI Holdings, Inc. and Penson Financial Services, Inc.

8-K

001-32878


10
.3

11/21/0610
.24

Unconditional Guaranty Agreement
    made as of November 20, 2006 by Schonfeld Group Holdings
    LLC, Schonfeld Securities LLC and Steven B. Schonfeld in favor
    of Penson Financial Services, Inc.

8-K

001-32878


10
.4

11/21/0610
.25

Termination/Compensation Payment
    Agreement, dated as of November 20, 2006, by and among Opus
    Trading Fund LLC, Quantitative Trading Solutions, LLC and
    Penson Financial Services, Inc.

8-K

001-32878


10
.5

11/21/0610
.26+

Employment Letter Agreement
    between the Company and Kevin W. McAleer dated February 15,
    2006

S-1/A

333-127385


10
.22

3/21/0610
.27+

Executive Employment Agreement
    between the Company and Philip A. Pendergraft dated
    April 21, 2006

S-1/A

333-127385


10
.23

5/1/0610
.28+

Executive Employment Agreement
    between the Company and Daniel P. Son dated April 21, 2006

S-1/A

333-127385


10
.24

5/1/0610
.29

Eighth Amendment to 1700 Pacific
    Avenue Office Lease by and between Berkeley First City, Ltd. and
    Penson Worldwide, Inc. dated April 12, 2006

S-1/A

333-127385


10
.25

5/9/0610
.30

Sixteenth Amendment to Amended and
    Restated Agreement by and between SAI Holdings, Inc. (f/k/a
    Service Asset Investments, Inc.) and Guaranty Bank (f/k/a
    Guaranty Federal Bank, F.S.B.), dated April 21, 2006

S-1/A

333-127385


10
.27

5/1/0610
.31

Guaranty Bank Consent, dated
    May 8, 2006, to SAMCO Reorganization Agreement by and
    between Penson Worldwide, Inc., SAI Holdings, Inc. and Penson
    Financial Services, Inc. and SAMCO Capital Markets, Inc. and
    SAMCO Holdings, Inc.

S-1/A

333-127385


10
.27

5/9/0610
.32

Amendment to Remote Processing
    Agreement between Penson Worldwide, Inc. and SunGard Data
    Systems Inc. dated July 10, 1995, as amended
    September 13, 1996 and August 1, 2002

8-K

001-32878


10
.10

7/31/0610
.33

First Amendment to Credit
    Agreement, dated the 29th day of September, 2006, to be
    effective as of May 26, 2006, by and among the Company,
    Guaranty Bank, as Administrative Agent, Swing Line Lender,
    Arranger and Letter of Credit Issuer, Wachovia Bank, National
    Association, as Documentation Agent and the other lenders party
    thereto

8-K

001-32878


10
.1

10/3/0610
.34

Second Amendment to Credit
    Agreement, dated the 16th day of February, 2007, to be
    effective as of May 26, 2006, by and among the Company,
    Guaranty Bank, as Administrative Agent, Swing Line Lender,
    Arranger and Letter of Credit Issuer, Wachovia Bank, National
    Association, as Documentation Agent and the other lenders party
    thereto

8-K

001-32878


10
.1

2/16/07




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.35

Letter Agreement dated
    February 16th, 2007, amending that certain Purchase
    Agreement dated as of November 6, 2006 among Goldenberg
    Hehmeyer & Co., Goldenberg LLC, Hehmeyer LLC, GH
    Trading LLC, GHCO Partners LLC, Christopher Hehmeyer, Ralph
    Goldenberg, SAI Holdings, Inc., GH1 Inc. and GH2 LLC and
    Christopher Hehmeyer in his capacity as Sellers
    Representative

8-K

001-32878


10
.2

2/16/0711
.1

Statement regarding computation of
    per share earnings

S-1/A

333-127385


11
.1

5/1/0621
.1*

List of Subsidiaries31
.1*

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith)31
.2*

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith)32
.1*

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (filed herewith)32
.2*

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (filed herewith)     *
    
    Filed herewith.  +
    
    Management contracts or compensation plans or arrangements in
    which directors or executive officers are eligible to
    participate.
    
    Confidential treatment has been requested for certain
    information contained in this document. Such information has
    been omitted and filed separately with the Securities and
    Exchange Commission.