# EDGAR Filing Document

**Accession Number:** 0001083675
**File Stem:** 0001083675-23-000002
**Filing Date:** 2023-3
**Character Count:** 23435
**Document Hash:** cbbee8a1003ab1f4ababe80b7b0e717b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001083675-23-000002.hdr.sgml**: 20230331

**ACCESSION NUMBER**: 0001083675-23-000002

**CONFORMED SUBMISSION TYPE**: X-17A-5

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230331

**DATE AS OF CHANGE**: 20230331

**EFFECTIVENESS DATE**: 20230331

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** DZ FINANCIAL MARKETS LLC
- **CENTRAL INDEX KEY:** 0001083675
- **IRS NUMBER:** 132847358
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-51687
- **FILM NUMBER:** 23788757

**BUSINESS ADDRESS:**
- **STREET 1:** ONE VANDERBILT
- **STREET 2:** 49TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 212-745-1600

**MAIL ADDRESS:**
- **STREET 1:** ONE VANDERBILT
- **STREET 2:** 49TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** DG FINANCIAL MARKETS LLC                                /BD
- **DATE OF NAME CHANGE:** 19990408

### Attached PDF Documents

**Attachment 1:** `dzpublic.pdf`

# DZ Financial Markets LLC

Statement of Financial Condition

December 31, 2022

Filed as PUBLIC information pursuant to Rule 17a-5(d) under the Securities Exchange Act of 1934.

# UNITED STATES

# SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

OMB APPROVAL

OMB Number: 3235-0123

Expires: Oct. 31, 2023

Estimated average burden

hours per response: 12

# ANNUAL REPORTS

# FORM X-17A-5

# PART III

SEC FILE NUMBER

8-51687

# FACING PAGE

Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934

FILING FOR THE PERIOD BEGINNING 01/01/2022 AND ENDING 12/31/2022

MM/DD/YY

MM/DD/YY

# A. REGISTRANT IDENTIFICATION

NAME OF FIRM: DZ Financial Markets LLC

TYPE OF REGISTRANT (check all applicable boxes):

☑ Broker-dealer

☐ Security-based swap dealer

☐ Major security-based swap participant

☐ Check here if respondent is also an OTC derivatives dealer

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)

One Vanderbilt - 49th Floor

| (No. and Street) |  |  |
| --- | --- | --- |
| New York | NY | 10017 |
| (City) | (State) | (Zip Code) |

PERSON TO CONTACT WITH REGARD TO THIS FILING

Gerhard Summerer (212)745 1600

Gerhard.Summerer@DZBank.de

(Name)

(Area Code - Telephone Number)

(Email Address)

# B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*

RSM US LLP

| (Name - if individual, state last, first, and middle name) |  |  |  |
| --- | --- | --- | --- |
| 151 West 42nd Street | New York | NY | 10017 |
| (Address) | (City) | (State) | (Zip Code) |
| 09/24/2003 |  | 49 |  |

(Date of Registration with PCAOB)(if applicable)

(PCAOB Registration Number, if applicable)

# FOR OFFICIAL USE ONLY

* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable.

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

# OATH OR AFFIRMATION

I, Gerhard Summerer, swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of DZ Financial Markets LLC, as of 12/31, 2022, is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer.

LINDA S. BORRA
Notary Public, State of New York
No. 01BO6051395
Qualified in Orange County
Commission Expires November 27, 2024

Signature: [Signature]
Title:
President

Linda S. Borra
Notary Public

This filing** contains (check all applicable boxes):

☑ (a) Statement of financial condition.
☑ (b) Notes to consolidated statement of financial condition.
☐ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X).
☐ (d) Statement of cash flows.
☐ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
☐ (f) Statement of changes in liabilities subordinated to claims of creditors.
☐ (g) Notes to consolidated financial statements.
☐ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
☐ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
☐ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
☐ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
☐ (l) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.
☐ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
☐ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
☐ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist.
☐ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
☑ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
☐ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☑ (t) Independent public accountant's report based on an examination of the statement of financial condition.
☐ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
☐ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
☐ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable.
☐ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
☐ (z) Other: ________________

**To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.

## Contents

| Independent Auditor's Report | 1 |
| --- | --- |
| Financial Statement: |  |
| Statement of Financial Condition | 2 |
| Notes to Statement of Financial Condition | 3 - 6 |

RSM US LLP

## Report of Independent Registered Public Accounting Firm

To the Member of DZ Financial Markets LLC

### Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of DZ Financial Markets LLC (the Company) as of December 31, 2022, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

### Basis for Opinion

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

*RSM US LLP*

We have served as the Company's auditor since 2006.

New York, New York March 31, 2023

THE POWER OF BEING UNDERSTOOD  
AUDIT | TAX | CONSULTING

1

RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International.

# **DZ Financial Markets LLC**

# **Statement of Financial Condition  
December 31, 2022**

# ---**ASSETS**

| Cash | $968,554 |
| --- | --- |
| Investments | 6,981,905 |
| Investment banking fee receivables | 840,011 |
| Total assets | $8,790,470 |

# **LIABILITIES AND MEMBER'S EQUITY**

| Liabilities: |  |
| --- | --- |
| Payable to Parent | $256,176 |
| Accounts payable and accrued expenses | 158,748 |
| Total liabilities | 414,924 |
| Commitments and Contingencies |  |
| Member's Equity | 8,375,546 |
| Total liabilities and Member's equity | $8,790,470 |

See Notes to Statement of Financial Condition.

2

## DZ Financial Markets LLC

### Notes to Statement of Financial Condition---

#### Note 1. Nature of Business and Organization

DZ Financial Markets LLC (the 'Company') is a wholly owned subsidiary of DZ BANK AG (the 'Parent'). The Company is a registered broker-dealer with the Securities and Exchange Commission (the 'SEC') and a member of the Financial Industry Regulatory Authority ('FINRA'). The Company acts as a broker for U.S. Qualified Institutional Buyers ('QIBs') that engage in foreign and domestic securities trading and private placement activities. The Company also provides advisory services for underwriters and companies that intend to go public. All trades and placements are executed through affiliates on a delivery versus payment basis.

In reliance on footnote 74 to SEC Release 34-70073 and as discussed in Q&A 8 of the related FAQ issued by SEC staff, the Company does not claim an exemption from SEA Rule 15c3-3. The Company operates as a 'Non-Covered Firm' engaged in 'Non-Covered Firm Activities' as defined by the SEC and FINRA.

#### Note 2. Significant Accounting Policies

**Use of Estimates:** The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ('GAAP'), which require management to make estimates and assumptions, including those regarding financial instrument valuations and certain accrued liabilities that affect the related amounts reported in the financial statements and accompanying notes. Actual results could differ materially from these estimates.

**Cash and Cash Equivalents:** The Company defines cash equivalents as highly liquid investments with original maturities of three months or less at the time of purchase. From time to time, the Company's cash balance held at financial institutions exceeds Federal Deposit Insurance Corporation ('FDIC') insurance coverage and, as a result, there is a concentration of credit risk related to the balance on deposit in excess of FDIC insurance coverage. The Company believes that the risk of loss is not significant. As of December 31, 2022, the Company held no cash equivalents.

The Company conducts substantially all of its investing activities through a single financial institution. Significant credit exposure may result in the event that this financial institution is unable to fulfill its contractual obligations. On December 31, 2022, 100% of the Company's investments reflected on the statement of financial condition were in Unites States Treasury securities.

**Credit Losses:** ASC Topic 326, Financial Instruments - Credit Losses ('ASC 326') prescribes the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss ('CECL') methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. Under the accounting update guidance, the Company has the ability to determine there are no expected credit losses in certain circumstances (e.g., based on collateral arrangements or based on the credit quality of the borrower or issuer).

The Company's expectation is that the credit risk associated with fees and other receivables is not significant until they are 90 days past due based on the contractual arrangement and expectation of collection in accordance with industry standards.

**Income Taxes:** The Company is a single-member limited liability company ('LLC') that has elected to be a disregarded entity for federal and state income tax purposes. As such, the results of operations are included on the income tax return of its Parent, which is responsible for all income taxes. Therefore, no provision or liability for income taxes has been included in the financial statements. The Company follows Financial Accounting Standards Board ('FASB') Accounting Standards Codification ('ASC') Topic 740, Income Taxes, which provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are 'more

3

DZ Financial Markets LLC

# Notes to Statement of Financial Condition

# **Note 2. Significant Accounting Policies (Continued)**

likely than not' of being sustained 'when challenged' or 'when examined' by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense and liability in the current year. Management evaluated the Company's tax positions and concluded that the Company does not require adjustment to the financial statements in order to comply with the provisions of this guidance.

**Fair Value Measurements:** FASB ASC Topic 820 ('ASC 820'), *Fair Value Measurements and Disclosures*, defines fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and provides for disclosure requirements for fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below:

**Level 1:** Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The types of financial instruments in Level 1 include listed equities and listed derivatives.

**Level 2:** Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and fair value that is determined through the use of models or other valuation methodologies. Financial instruments in this category generally include certificates of deposit, term deposits, corporate bonds and loans, less liquid and restricted equity securities, certain over-the-counter derivatives and redeemable investments in alternative investment funds. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

**Level 3:** Inputs that are unobservable for the asset or liability and that include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. Financial instruments in this category generally include equity and debt positions in private companies, and nonredeemable investments in alternate investment funds.

The following describes the valuation methodologies the Company uses to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified:

*T-Bills:* Treasury securities are valued using inputs that are observable and significant to the fair value measurement and are classified within Level 2, as the Company computes their value through linear depreciation of the discount to par the securities were purchased at, which approximates fair value.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The following section describes the valuation techniques used by the Company to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

4

DZ Financial Markets LLC

Notes to Statement of Financial Condition

# **Note 2. Significant Accounting Policies (Continued)**

The following table presents the Company's fair value hierarchy for those assets measured at fair value on a recurring basis as of December 31, 2022:

|  | December 31, 2022 |  |  |  |
| --- | --- | --- | --- | --- |
|  | Total | Level 1 | Level 2 | Level 3 |
| Investments | $6,981,905 | $ - | $6,981,905 | $ - |
| Total | $6,981,905 | $ - | $6,981,905 | $ - |

# **Note 3. Related Party Activities**

The Company has service agreements with the Parent. The Company shares many of the same resources to benefit from infrastructural cost savings in the conduct of its business. The Parent provides office space and certain administrative services to the Company. The related payable in the amount of $256,176 is recorded as Payable to Parent on the statement of financial condition.

# **Note 4. Regulatory Requirements**

The Company, as a registered broker-dealer and member of FINRA, is subject to the SEC Uniform Net Capital Rule ('SEC Rule 15c3-1'), which requires the maintenance of minimum net capital equal to $100,000 or 6-2/3% of aggregate indebtedness (as defined), whichever is greater, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1.

The rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. As of December 31, 2022, the Company had net capital and excess net capital of $7,535,535 and $7,435,535, respectively. The ratio of aggregate indebtedness to net capital was .05 to 1.

# **Note 5. Commitments and Contingencies**

In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications.

5

**DZ Financial Markets LLC**

**Notes to Statement of Financial Condition**---

# **Note 6. Subsequent Events**

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. Following the review the Company has concluded that no subsequent events requiring disclosure or accrual in these financial statements were noted.

6

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0001083675

**Filer CCC:** XXXXXXXX

**Is this a LIVE or TEST filing?:** LIVE

**Would you like a Return Copy?:** Yes

### Submission Information

**Report Period Begin Date:** 01-01-2022

**Report Period End Date:** 12-31-2022

**Type of Registrant:** Broker-dealer

**Any material weaknesses identified?:** No

### Registrant Identification

**Name of Broker-Dealer:** DZ FINANCIAL MARKETS LLC

**Business Address:** ONE VANDERBILT, 49TH FLOOR, NEW YORK, NY, 10017

**Contact Person:** Gerhard Summerer

**Contact Phone:** 2127451600

### Independent Public Accountant Identification

**Accountant Name:** RSM US LLP

**Accountant Address:** 151 West 42nd Street, New York, NY, 10017

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Gerhard Summerer**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **DZ FINANCIAL MARKETS LLC**, as of **12-31-2022**, are true and correct.

**Signature:** Gerhard Summerer

**Title:** President

**Notarized:** Yes