# EDGAR Filing Document

**Accession Number:** 0000867810
**File Stem:** 0000867810-23-000004
**Filing Date:** 2023-2
**Character Count:** 80970
**Document Hash:** a749eb55c2720d7a3dff3838e100eaef
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000867810-23-000004.hdr.sgml**: 20230222

**ACCESSION NUMBER**: 0000867810-23-000004

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

**PUBLIC DOCUMENT COUNT**: 4

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230222

**DATE AS OF CHANGE**: 20230222

**EFFECTIVENESS DATE**: 20230222

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FIRST BROKERS SECURITIES LLC
- **CENTRAL INDEX KEY:** 0000867810
- **IRS NUMBER:** 320104062
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-43035
- **FILM NUMBER:** 23650844

**BUSINESS ADDRESS:**
- **STREET 1:** HARBORSIDE 5
- **STREET 2:** 185 HUDSON STREET, SUITE 1500
- **CITY:** JERSEY CITY
- **STATE:** NJ
- **ZIP:** 07311
- **BUSINESS PHONE:** (212) 513-4426

**MAIL ADDRESS:**
- **STREET 1:** HARBORSIDE 5
- **STREET 2:** 185 HUDSON STREET, SUITE 1500
- **CITY:** JERSEY CITY
- **STATE:** NJ
- **ZIP:** 07311

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST BROKERS SECURITIES, INC.
- **DATE OF NAME CHANGE:** 20050106

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST BROKERS SECURITIES LLC
- **DATE OF NAME CHANGE:** 20050105

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST BROKERS SECURITIES, INC.
- **DATE OF NAME CHANGE:** 20050104

### Attached PDF Documents

**Attachment 1:** `123122sipcprocedures.pdf`

CITRIN COOPERMAN®

Citrin Cooperman & Company, LLP
Certified Public Accountants

50 Rockefeller Plaza
New York, NY 10020
T 212.697.1000 F 212.697.1004
citrincooperman.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES

To the Managing Members
First Brokers Securities LLC

We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation ("SIPC") Series 600 Rules, which are enumerated below on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2022. Management of First Brokers Securities LLC (the "Company") is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7.

Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures we performed and the associated findings are as follows:

1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences;
2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2022, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2022, noting no differences;
3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; and
4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences.

CITRINCOOPERMAN®

Citrin Cooperman & Company, LLP

We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to, and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the Company and SIPC and is not intended to be, and should not be, used by anyone other than these specified parties.

New York, New York
February 20, 2023

"Citrin Cooperman" is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients' business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America, which is itself a regional member of Moore Global Network Limited (MGNL).

2

SIPC-7

(36-REV 12/18)

SECURITIES INVESTOR PROTECTION CORPORATION

Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001

General Assessment Reconciliation

SIPC-7

(36-REV 12/18)

For the fiscal year ended December 31, 2022

(Read carefully the instructions in your Working Copy before completing this Form)

# TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS

1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5:

4305 FINRA Dec

First Brokers Securities LLC

Harborside 5, 185 Hudson St, suite 1500

Jersey City, New Jersey 07311-4011

Note: If any of the information shown on the mailing label requires correction, please e-mail any corrections to form@sipc.org and so indicate on the form filed.

Name and telephone number of person to contact respecting this form.

Robert H. Dower 973 277 5286

2. A. General Assessment (item 2e from page 2)

B. Less payment made with SIPC-6 filed (exclude interest)

7/13/2022

Date Paid

C. Less prior overpayment applied

D. Assessment balance due or (overpayment)

E. Interest computed on late payment (see instruction E) for ____ days at 20% per annum

F. Total assessment balance and interest due (or overpayment carried forward)

G. PAYMENT: √ the box

Check mailed to P.O. Box

Total (must be same as F above)

Funds Wired

ACH

13,976

H. Overpayment carried forward

$( )

$30,318

(16,342)

( )

$13,976

3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number):

The SIPC member submitting this form and the person by whom it is executed represent thereby that all information contained herein is true, correct and complete.

Dated the 1st day of February, 20 23.

First Brokers Securities LLC

(Name of Corporation, Partnership or other organization)

R. H. Dower

Chief Financial Officer Robert H. Dower

(Title)

This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form for a period of not less than 6 years, the latest 2 years in an easily accessible place.

SIPC REVIEWER

Dates:

Postmarked

Received

Reviewed

Calculations ____

Documentation ____

Exceptions:

Disposition of exceptions:

Forward Copy ____

1

# DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT

Amounts for the fiscal period beginning January 1, 2022 and ending December 31, 2022

Item No.

2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030)

2b. Additions:

(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and predecessors not included above.
(2) Net loss from principal transactions in securities in trading accounts.
(3) Net loss from principal transactions in commodities in trading accounts.
(4) Interest and dividend expense deducted in determining item 2a.
(5) Net loss from management of or participation in the underwriting or distribution of securities.
(6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net profit from management of or participation in underwriting or distribution of securities.
(7) Net loss from securities in investment accounts.

Total additions

2c. Deductions:

(1) Revenues from the distribution of shares of a registered open end investment company or unit investment trust, from the sale of variable annuities, from the business of insurance, from investment advisory services rendered to registered investment companies or insurance company separate accounts, and from transactions in security futures products.
(2) Revenues from commodity transactions.
(3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with securities transactions.
(4) Reimbursements for postage in connection with proxy solicitation.
(5) Net gain from securities in investment accounts.
(6) \(100\%\) of commissions and markups earned from transactions in (i) certificates of deposit and (ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less from issuance date.
(7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue related to the securities business (revenue defined by Section 16(9)(L) of the Act).
(8) Other revenue not related either directly or indirectly to the securities business. (See Instruction C):

Net proceeds from sale of NJ tax certificates

(Deductions in excess of $100,000 require documentation)

(9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,

Code 4075 plus line 2b(4) above) but not in excess of total interest and dividend income.

(ii) 40% of margin interest earned on customers securities accounts (40% of FOCUS line 5, Code 3960).

Enter the greater of line (i) or (ii)

Total deductions

2d. SIPC Net Operating Revenues

2e. General Assessment @ .0015

$(18,944)

$

Eliminate cents

$20,964,890

(352,525)

(381,290)

(18,944)

(752.759)

$20,212,131

$30,318

(to page 1, line 2.A.)

2

**Attachment 2:** `Financials1.pdf`

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

### ANNUAL
REPORTS
FORM X-17A-5
PART III

| OMB APPROVAL |
| --- |
| OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 |
| SEC FILE NUMBER |
| 8- 43035 |

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 01/01/22 AND ENDING 12/31/22
MM/DD/YY MM/DD/YY

# A. REGISTRANT IDENTIFICATION

NAME OF FIRM: First Brokers Securities 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.)

Harborside 5, 185 Hudson Street, Suite 1500

(No. and Street)

Jersey City New Jersey 07311-4011
(City) (State) (Zip Code)

PERSON TO CONTACT WITH REGARD TO THIS FILING

Robert H. Dower (212) 513-4443 Robert.Dower@firstbrokers.com
(Name) (Area Code - Telephone Number) (Email Address)

# B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*

Citrin Cooperman & Company, LLP

(Name - if individual, state last, first, and middle name)

| 50 Rockefeller Plaza | New York | NY | 10020 |
| --- | --- | --- | --- |
| (Address) | (City) | (State) | (Zip Code) |
| 11/02/2005 |  | 2468 |  |

(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.

# AFFIRMATION

I, Robert H. Dower, swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to First Brokers Securities LLC as of 12/31/22, 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.

Signature  
CFO  
Title

![img-0.jpeg](img-0.jpeg)

Christ Cappitelli 2/20/2023
Notary Public

CHRISTINA CAPPITELLI
Commission # 50183518
Notary Public, State of New Jersey
My Commission Expires
January 26, 2027

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

☑ (a) Statement of financial condition.
☐ (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable.
☑ (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 members' or sole proprietor's equity, as applicable.
☑ (f) Statement of changes in liabilities subordinated to claims of creditors.
☑ (g) Notes to unconsolidated or consolidated financial statements,, as applicable.
☑ (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.

# First Brokers Securities LLC

Financial Statements and Supplemental Schedules
Pursuant to Rule 17a-5 under the
Securities and Exchange Act of 1934
December 31, 2022

With Reports of Independent Registered Public Accounting Firm Thereon

This report is deemed CONFIDENTIAL in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934.

CITRIN COOPERMAN®

Citrin Cooperman & Company, LLP
Certified Public Accountants

50 Rockefeller Plaza
New York, NY 10020
T 212.697.1000 F 212.697.1004
citrincooperman.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managing Members
First Brokers Securities LLC

# Opinion on the Financial Statements

We have audited the accompanying statement of financial condition of First Brokers Securities LLC as of December 31, 2022, and the related statements of operations, changes in members' equity, changes in liabilities subordinated to claims of general creditors, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of First Brokers Securities LLC as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

# Basis for Opinion

These financial statements are the responsibility of First Brokers Securities LLC's management. Our responsibility is to express an opinion on First Brokers Securities LLC's financial statements 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 First Brokers Securities LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion.

CITRINCOOPERMAN®

Citrin Cooperman & Company, LLP

## Auditor's Report on Supplemental Information

The supplemental information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of First Brokers Securities LLC's financial statements. The supplemental information is the responsibility of First Brokers Securities LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information contained in Schedules I and II is fairly stated, in all material respects, in relation to the financial statements as a whole.

We have served as First Brokers Securities LLC's auditor since 2018.
New York, New York
February 20, 2023

2

# **First Brokers Securities LLC**  
 **Statement of Financial Condition**  
 **December 31, 2022**---

# **Assets**

| Cash | $7,705,738 |
| --- | --- |
| Receivable from clearing broker, net | 3,355,208 |
| Receivable from broker-dealers | 3,458 |
| Right of use asset | 2,538,898 |
| Property and equipment, net | 886,864 |
| Prepaid expenses and other assets | 379,748 |

| Total assets | $14,869,914 |
| --- | --- |

---

# **Liabilities and Members' Equity**

# **Liabilities**

| Accrued compensation and related expenses | $739,652 |
| --- | --- |
| Accounts payable and accrued expenses | 182,366 |
| Lease liability | 3,063,465 |
| Revolving note subordinated to the claims of general creditors | 4,000,000 |
| Payable to affiliate | 1,222 |
| Total liabilities | 7,986,705 |

---

# **Commitments and contingencies (Note 11)**

| Members' equity | 6,883,209 |
| --- | --- |

---

| Total liabilities and members' equity | $14,869,914 |
| --- | --- |

---

The accompanying notes are an integral part of these financial statements.

3

# **First Brokers Securities LLC**  
**Statement of Operations**  
**Year Ended December 31, 2022**---

# **Revenues**

| Principal transactions | $20,503,571 |
| --- | --- |
| Commissions | 21,879 |
| Other income | 439,441 |
| Total revenues | 20,964,891 |

# **Expenses**

| Compensation and related costs | 14,998,596 |
| --- | --- |
| Travel and entertainment | 464,873 |
| Communications | 1,920,453 |
| Clearance | 264,920 |
| Occupancy | 759,479 |
| Depreciation and amortization | 284,352 |
| Allocated charges from affiliate | 99,828 |
| Regulatory fees | 170,907 |
| Interest | 22,945 |
| Other | 631,697 |
| Total expenses | 19,618,050 |
| Net income | $1,346,841 |

The accompanying notes are an integral part of these financial statements.

4

# **First Brokers Securities LLC**  
**Statement of Changes in Members' Equity**  
**Year Ended December 31, 2022**---

| Balance, January 1, 2022 | $5,792,310 |
| --- | --- |
| Contributions | 288,856 |
| Distributions | (544,798) |
| Net income | 1,346,841 |
| Balance, December 31, 2022 | $6,883,209 |

CONFIDENTIAL

The accompanying notes are an integral part of these financial statements.

5

# **First Brokers Securities LLC**
**Statement of Changes in Liabilities Subordinated to Claims of General Creditors**
**Year Ended December 31, 2022**

| Balance, January 1, 2022 | $4,000,000 |
| --- | --- |
| Drawdowns | 52,000,000 |
| Repayments | (52,000,000) |
| Balance, December 31, 2022 | $4,000,000 |

CONFIDENTIAL

The accompanying notes are an integral part of these financial statements.

6

# **First Brokers Securities LLC**  
 **Statement of Cash Flows**  
 **Year Ended December 31, 2022**---

# **Cash flows from operating activities**

| Net income | $1,346,841 |
| --- | --- |
| Adjustments to reconcile net income to net cash provided by operating activities |  |
| Non-cash charges included in net income: |  |
| Depreciation and amortization | 284,352 |
| Non-cash lease expense | (61,998) |
| (Increase) in operating assets: |  |
| Receivable from clearing broker, net | (89,671) |
| Receivable from broker-dealers | (1,233) |
| Prepaid expenses and other assets | 23,490 |
| Increase (decrease) in operating liabilities: |  |
| Accrued compensation and related expenses | (1,113,868) |
| Accounts payable and accrued expenses | 21,212 |
| Payable to affiliate | (36,943) |
| Net cash provided by operating activities | 372,182 |

# **Cash used in investing activities,**

| Purchases of property and equipment | (52,719) |
| --- | --- |

# **Cash flows from financing activities**

| Drawdown of revolving note subordinated to the claims of general creditors | 52,000,000 |
| --- | --- |
| Repayment of revolving note subordinated to the claims of general creditors | (52,000,000) |
| Contributions from members | 288,856 |
| Distributions to members | (544,798) |
| Net cash used in financing activities | (255,942) |
| Net increase in cash | 63,521 |

# **Cash and Deposit**

| Beginning of year | 9,642,217 |
| --- | --- |
| End of year | $9,705,738 |

# **At December 31, 2022 the amounts in Cash and Deposit include:**

| Cash | $7,705,738 |
| --- | --- |
| Deposit with clearing broker, included in receivable from clearing broker, net | 2,000,000 |
| Total Cash and Deposit | $9,705,738 |

# **Supplemental information**

| Cash paid during the year for interest | $17,722 |
| --- | --- |

The accompanying notes are an integral part of these financial statements.

7

# **First Brokers Securities LLC**## **Notes to Financial Statements**### **Year Ended December 31, 2022**---

#### 1. Organization

First Brokers Securities LLC (the 'Company') is a Delaware Limited Liability Company. The Company, which is headquartered in New Jersey, and has a branch office in Juno Beach, Florida, is a broker-dealer registered with the Securities and Exchange Commission ('SEC') and is a member of Financial Industry Regulatory Authority, Inc. ('FINRA'). The Company's principal business activity is the brokering of corporate and government debt securities.

The Company is owned 60% by AO-First Brokers LLC and 40% by ICAP Global Broking Inc.

#### Brokerage Capacities

With regard to certain products, the Company acts in the capacity of either 'matched principal' or 'name give-up.'

When acting in the capacity of 'matched principal', the Company acts as a 'middleman' or intermediary by serving as the counterparty for identified buyers and sellers in the matching in whole or in part of reciprocal back-to-back trades.

When acting in the 'name give-up' capacity, the Company acts in an agency capacity, whereby it connects buyers and sellers and may assist in the negotiation of the price and other material terms of the transaction. At the point at which the parties agree to terms, the Company leaves the buyer and seller to clear and settle through the appropriate market mechanism and records the revenue agreed to by the parties for its services. The receivable from broker dealers in the statement of financial condition is associated with these transactions.

#### Revenue

The Company is generally compensated for its role in facilitating and consummating transactions by charging a brokerage fee. In 'matched principal' market places, the fee typically takes the form of a markup or markdown which is added to or subtracted from, as the case may be, the agreed-to transaction price. In 'name give-up' marketplaces and for other agency transactions the fee will typically take the form of a commission. Revenue from these transactions is included in commissions on the accompanying statement of operations.

In addition, in certain fixed income markets the Company may, when acting in a 'matched principal' capacity, earn a profit or realize a loss by buying a financial instrument at one price and simultaneously or shortly thereafter selling it at a higher price (or vice versa), such that the Company receives the benefit of the 'spread' on the trade in addition to any markup or markdown it charges. Revenue from these transactions is included in principal transactions on the accompanying statement of operations.

All revenue is earned on a trade date basis.

8

# **First Brokers Securities LLC**
**Notes to Financial Statements**
**Year Ended December 31, 2022**

# **1. Organization (continued)**

# **Unmatched Principal Transactions**

The Company may and does from time to time acquire unmatched positions as principal including, but not limited to, the following scenarios:

(1) Taking a position to add liquidity for Company customers and to attract market participants to its market. Sometimes the act of posting or providing quotations may result in the Company acquiring a position as principal on an unmatched trade;

(2) As a result of errors or out trades. From time to time, as a result of a bona fide error the Company may in "matched principal" marketplaces acquire a position in resolution of such error (this may also occur when the Company is acting as agent in an exchange based marketplace); and

(3) Executing or facilitating customer orders. This includes, but is not limited to, acquiring a position (i) resulting from partial mismatches in timing between multiple buyers and sellers when facilitating customer orders, (ii) where appropriate, executing in anticipation of customer interest or anticipated orders, and (iii) prior to a position being novated, given-up or settled by the relevant customer(s) and/or for the purposes of gaining the customer(s) access to any applicable clearing and settlement system.

In connection with acquiring positions from unmatched principal transactions and erroneous agency transactions, the Company, while managing and liquidating such positions, may generate a profit or a loss. Profits or losses from these transactions are recognized by the Company and reflected in principal transactions in the statement of operations. During the year ended December 31, 2022, the Company realized a net loss of approximately $107,599 related to these transactions.

# **2. Summary of Significant Accounting Policies**

# **(a) Basis of Presentation**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

# **(b) Cash and Restricted Cash**

The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. At December 31, 2022, the Company has no cash equivalents.

Restricted cash is subject to a legal or contractual restriction by third parties as well as a restriction as to withdrawal or use, including restrictions that require the funds to be used for a specified purpose and restrictions that limit the purpose for which the funds can be used. As of December 31, 2022, the Company's restricted cash is the deposit with clearing broker.

9

# **First Brokers Securities LLC**  
**Notes to Financial Statements**  
**Year Ended December 31, 2022**---

# **2. Summary of Significant Accounting Policies (continued)**

# **(c) Fair Value**

The Company utilizes various methods to measure the fair value of most of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The three levels of inputs are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Securities listed on a national exchange are valued at the last closing bid price if owned by the Company and the last closing ask price if sold short by the Company on the day of valuation. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Other assets and securities for which market quotations are not readily available are valued at estimated fair value in accordance with U.S. GAAP. The resulting gains and losses are reflected in the statement of operations.

# **(d) Income Taxes**

The Internal Revenue Code and related state tax codes provide that any income or loss is passed through to the ultimate beneficial members for federal and state income tax purposes. The Company has not provided for federal and state income taxes. Additionally, the Company has no uncertain tax positions.

The Company, with the consent of its members, has elected under the IRC to be taxed as a partnership. In lieu of corporation income taxes, the members of the partnership are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal or state income taxes has been included in the financial statements.

The Company recognizes and measures its unrecognized tax benefits in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 740, *Income Taxes*. Under that guidance, the Company assesses the likelihood, based on the technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change.

10

# **First Brokers Securities LLC**  
**Notes to Financial Statements**  
**Year Ended December 31, 2022**---

# **2. Summary of Significant Accounting Policies (continued)**

# **(e) Revenue Recognition**

The Company acts in the capacity of a middleman transacting simultaneous buys and sells on a riskless principal basis. The vast majority of transactions are consummated once a buyer and seller have been matched and have agreed to the performance obligation details of price and quantity of the security being traded. Revenue is recognized on a trade date basis once the details of the performance obligation are met and transfer of control of the securities is established between the customers. Securities transactions typically settle two days after trade date.

The Company's customers consist solely of institutional broker-dealers operating within the United States. Revenues are recognized on a trade date basis, regardless of customer or geographic location.

# **(f) Right of Use Assets and Lease Liabilities**

The Company recognizes its leases in accordance with ASC Topic 842, *Leases*. The guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabilities on the statement of financial condition.

The Company conducts an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of right-of-use assets ('ROU') and lease liabilities, which required subjective assessment over the determination of the associated discount rates.

The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, we use our incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The present value of the lease payments was determined using a 3.5% incremental borrowing rate. Right of use assets also exclude lease incentives.

The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise.

The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred.

The Company reconciles the operating lease expense with the operating lease payments by presenting the amortization of the right of use asset and the change in the lease liability in a single line item within the adjustments to reconcile net income to net cash provided by operating activities in the accompanying statement of cash flows.

11

# **First Brokers Securities LLC**  
**Notes to Financial Statements**  
**Year Ended December 31, 2022**---

# **2. Summary of Significant Accounting Policies (continued)**

# **(g) Impairment of Long-Lived Assets**

In accordance with U.S. GAAP, the Company periodically assesses the recoverability of the carrying amounts of long-lived assets whenever events or changes in circumstances occur that indicate the carrying value may not be recoverable. An impairment loss is recognized when expected undiscounted future cash flows are less than the carrying amount of the asset. The impairment loss is the difference by which the carrying amount of the asset exceeds its fair value. At December 31, 2022, there was no impairment loss on the Company's long-lived assets.

# **(h) The Allowance for Credit Losses**

ASC Topic 326, *Financial Instruments - Credit Losses* ('ASC 326'), impacts the impairment model for certain financial assets by requiring a current expected credit loss ('CECL') methodology to estimate expected credit losses over the entire life of the financial asset.

For financial assets measured at amortized cost (e.g. cash, receivables from clearing broker and broker dealers), the Company has evaluated the expected credit losses based on the nature and contractual life or expected life of the financial assets, credit quality of the counter party and immaterial historic and expected losses. The Company concluded that there are de minimus expected credit losses and did not record a reserve for the cash or due from broker balances. The Company continuously monitors these estimates over the life of the receivable.

# **3. Employee Benefits**

The Company sponsors a 401(k) retirement plan (the 'Plan'). The Plan covers all employees upon commencement of employment with the Company. The Company does not match employee contributions.

# **4. Securities Owned and Securities Sold Not Yet Purchased**

As more fully described in Note 1, from time-to time the Company may hold securities positions arising from unmatched principal transactions. The Company seeks to reduce the liquidity risk associated with these positions by selling certain securities that are not yet purchased. When these situations occur the Company's statement of financial condition will reflect securities owned as well as securities sold, not yet purchased. Securities sold not yet purchased consists mainly of US Treasury debt securities that serve as a hedge against corporate debt securities that may be owned. All of the corporate debt securities and the US Treasury debt securities are classified as level 2 securities within the fair value hierarchy. At December 31, 2022, there were no securities owned or securities sold, not yet purchased.

12

# **First Brokers Securities LLC**  
 **Notes to Financial Statements**  
 **Year Ended December 31, 2022**---

# **5. Property and Equipment**

Property and equipment are depreciated using the straight line method and are comprised of the following as of December 31, 2022:

|  |  | Estimated Useful Lives |
| --- | --- | --- |
| Telephone and computer equipment | $402,951 | 3 to 5 years |
| Furniture and fixtures | 132,300 | 3 to 5 years |
| Leasehold improvements | 1,410,964 | Term of Lease |
| Software | 389,789 | 3 to 5 years |
|  | 2,336,004 |  |
| Less: Accumulated depreciation and amortization | (1,449,140) |  |
|  | $886,864 |  |

The depreciation and amortization expense for the year ended December 31, 2022 was $284,352.

# **6. Related Party Transactions**

The Company entered into agreements whereby subsidiaries of the minority owner provide certain services to the Company. For the year ended December 31, 2022, the Company incurred fees of approximately $100,000 for IT and Disaster Recovery services.

The terms of any of these transactions may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties.

As of December 31, 2022, the Company has a payable of approximately $186,000 to a related party which is included in accrued compensation and related expenses on the statement of financial condition.

# **7. Due from Clearing Broker**

Pursuant to an amended agreement with a clearing broker, the Company is required to maintain a clearing deposit of $2,000,000, which is included in the net receivable from clearing broker in the accompanying statement of financial condition.

In the normal course of its business, the Company indemnifies its clearing broker against specified potential losses in connection with its acting as an agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under this indemnification cannot be estimated. However, the Company believes that it is unlikely it will have to make payments under these arrangements and, as such, has not recorded any contingent liability in the financial statements for this indemnification.

13

# **First Brokers Securities LLC**## **Notes to Financial Statements**### **Year Ended December 31, 2022**---

#### **8. Revolving Note and Cash Subordination**

On October 15, 2021, the Company entered into a Revolving Note and Cash Subordination Agreement (the 'Revised Agreement') with ICAP Securities USA LLC, an affiliate of ICAP Broker Holdings North America (IBHNA). The Revised Agreement creates a $4,000,000 line of credit with a draw down period that expires on October 15, 2023 and requires that any advances under the Revised Agreement be repaid by no later than October 15, 2024.

The interest rates will be agreed to at the time of each advance. Any advances will be considered as liabilities of the Company, subordinated to claims of its general creditors, and will be available to be added back for net capital purposes. During the year ended December 31, 2022, the Company borrowed $52,000,000 and repaid $52,000,000 resulting in an open note balance of $4,000,000. All 2022 borrowings bore interest at 5.5%.

#### **9. Business Employment Incentive Program (BEIP) Tax Credits**

In March 2022, the Company received from the New Jersey Economic Development Authority (EDA) calendar year 2021 tax credits in the amount of $1,096,776 representing the final payment to the Company of the BEIP grant program of which the Company was party to. By agreement, these tax credits were sold to a related party at a discount of 14%. The Company provided the related party its portion of these proceeds of approximately $566,000 with the remaining approximately $373,000 included in other income in the statement of operations at December 31, 2022.

#### **10. Net Capital Requirements**

The Company is subject to the SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934, (the 'Rule') which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company computes its net capital under the alternative method permitted by the Rule, which requires that the Company maintain minimum net capital, as defined. At December 31, 2022, the Company's net capital was approximately $9,613,000 which was approximately $9,363,000 in excess of its minimum requirement of $250,000.

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to clearing all transactions with and for customers on a fully disclosed basis with a clearing broker.

#### **11. Concentration**

Substantially all of the cash assets of the Company are held by one bank and a single clearing broker-dealer. The Company has a significant cash receivable from its clearing broker and in addition all of the Company's securities owned and its securities sold but not yet purchased are carried by this single clearing broker-dealer. The Company does not consider itself to be at any significant risk with respect to these concentrations. At times cash balances exceed FDIC limits.

As described in the preceding notes, the Company may hold unmatched principal positions and related short positions. When these securities positions arise, the amounts of the securities within the categories may be significant and may also represent securities issued by a small number of issuers.

14

# **First Brokers Securities LLC**  
 **Notes to Financial Statements**  
 **Year Ended December 31, 2022**---

# **12. Commitments and Contingencies**

The Company has entered into operating leases for its facilities in New Jersey and Florida. The Company records the expenses to occupy its facilities on a straight line basis over the lease term and are included in occupancy in the accompanying statement of operations. During the year ended December 31, 2022, the operating lease cost was $574,000.

As of December 31, 2022, maturities of the outstanding lease liability for the Company were approximately as follows:

| Year ending December 31: |  |
| --- | --- |
| 2023 | $618,000 |
| 2024 | 662,000 |
| 2025 | 676,000 |
| 2026 | 691,000 |
| 2027 | 705,000 |
| Thereafter | 48,000 |
| Total | 3,400,000 |
| Discount to present value | 337,000 |
| Lease Liability | $3,063,000 |

Other information related to leases as of December 31, 2022:

Weighted average remaining lease term: 4.42 years.

Weighted average discount rate: 3.5%

# **13. Subsequent Events**

Management of the Company has evaluated events and transactions that have occurred since December 31, 2022 and through February 20, 2023 and determined there are no subsequent events that occurred during this period that would require recognition or disclosure in these financial statements.

15

# **First Brokers Securities LLC**  
 **Computation of Net Capital Pursuant to Rule 15c3-1 of the**  
 **Securities and Exchange Commission**  
 **December 31, 2022**

# **Supplemental Schedule I**

| Members' equity | $6,883,209 |
| --- | --- |
| Add: |  |
| Liabilities subordinated to claims of general creditors allowable in computation of net capital | 4,000,000 |
| Total capital and allowable subordinated liabilities | 10,883,209 |
| Deductions and/or charges |  |
| Nonallowable assets |  |
| Property and equipment, net of accumulated depreciation of $790,686 | 886,864 |
| Receivable from broker-dealers | 3,458 |
| Prepaid expenses and other assets | 379,748 |
| Total nonallowable assets | 1,270,070 |
| Net capital | $9,613,139 |
| Minimum net capital requirement (under SEC Rule 15c3-1) | $250,000 |
| Excess net capital ($9,613,139 - $250,000) | $9,363,139 |

There are no material differences in the computation of net capital presented above and the computation of net capital reported in the Company's unaudited Form X-17A-5 Part IIA Focus filing as of December 31, 2022.

See Report of Independent Registered Public Accounting Firm.

16

# **First Brokers Securities LLC**

# **Computation of Reserve Requirements and Information for  
Possession and Control Requirements for Brokers and Dealers  
Pursuant to SEC Rule 15c3-3**

**December 31, 2022**

**Supplemental Schedule II**

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 in that the Company's activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(ii).

CONFIDENTIAL

See Report of Independent Registered Public Accounting Firm.

17

CITRIN COOPERMAN

Citrin Cooperman & Company, LLP
Certified Public Accountants

50 Rockefeller Plaza
New York, NY 10020
T 212.697.1000 F 212.697.1004
citrincooperman.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managing Members
First Brokers Securities LLC

We have reviewed management's statements, included in the accompanying Management Statement Regarding Compliance with the Exemption Provisions for SEC Rule 15c3-3, in which (1) First Brokers Securities LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which First Brokers Securities LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provisions") and (2) First Brokers Securities LLC stated that First Brokers Securities LLC met the identified exemption provisions throughout the most recent fiscal year without exception. First Brokers Securities LLC's management is responsible for compliance with the exemption provisions and its statements.

Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about First Brokers Securities LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934.

New York, New York
February 20, 2023

# First Brokers Securities LLC

## Management Statement Regarding Compliance with the Exemption Provisions for SEC Rule 15c3-3

The management of First Brokers Securities LLC (the "Company") is responsible for its compliance with the exemption from SEC Rule 15c3-3, under the provisions of paragraph (k)(2)(ii) of that rule. Throughout the year ended December 31, 2022, the Company has been in compliance with such provision, without exception. To the best of its knowledge and belief, the Company states the following:

(1) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the provisions of 17 C.F.R. § 240.15c3-3 (k)(2)(ii); and

(2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k)(2)(ii) throughout the most recent fiscal year without exception.

Signature

\_\_\_\_\_  
Robert H. Dower  
CFO{

}

19

**Attachment 3:** `SOFC1.pdf`

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

### ANNUAL
REPORTS
FORM X-17A-5
PART III

| OMB APPROVAL |
| --- |
| OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 |
| SEC FILE NUMBER |
| 8- 43035 |

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 01/01/22 AND ENDING 12/31/22
MM/DD/YY MM/DD/YY

# A. REGISTRANT IDENTIFICATION

NAME OF FIRM: First Brokers Securities 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.)

Harborside 5, 185 Hudson Street, Suite 1500

(No. and Street)

Jersey City New Jersey 07311-4011
(City) (State) (Zip Code)

PERSON TO CONTACT WITH REGARD TO THIS FILING

Robert H. Dower (212) 513-4443 Robert.Dower@firstbrokers.com
(Name) (Area Code - Telephone Number) (Email Address)

# B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*

Citrin Cooperman & Company, LLP

(Name - if individual, state last, first, and middle name)

50 Rockefeller Plaza New York NY 10020
(Address) (City) (State) (Zip Code)
11/02/2005 2468

(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.

# AFFIRMATION

I, Robert H. Dower, swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to First Brokers Securities LLC as of 12/31/22, 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.

R.H. Dower

CFO

Title

![img-0.jpeg](img-0.jpeg)

Christ Cappitelli 2/20/2023
Notary Public

CHRISTINA CAPPITELLI

Commission # 50183518

Notary Public, State of New Jersey

My Commission Expires

January 26, 2027

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

☑ (a) Statement of financial condition.
☑ (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable.
☐ (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 members' or sole proprietor's equity, as applicable.
☐ (f) Statement of changes in liabilities subordinated to claims of creditors.
☐ (g) Notes to unconsolidated or consolidated financial statements,, as applicable.
☐ (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.

# First Brokers Securities LLC

**Statement of Financial Condition  
Pursuant to Rule 17a-5 under the  
Securities and Exchange Act of 1934  
December 31, 2022**

CITRIN COOPERMAN

Citrin Cooperman & Company, LLP
Certified Public Accountants

50 Rockefeller Plaza
New York, NY 10020
T 212.697.1000 F 212.697.1004
citrincooperman.com

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managing Members
First Brokers Securities LLC

# Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of First Brokers Securities LLC as of December 31, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of First Brokers Securities LLC 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 First Brokers Securities LLC's management. Our responsibility is to express an opinion on First Brokers Securities LLC'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 First Brokers Securities LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as First Brokers Securities LLC's auditor since 2018.
New York, New York
February 20, 2023

"Citrin Cooperman" is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serve clients' business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America, which is itself a regional member of Moore Global Network Limited (MGNL).

# **First Brokers Securities LLC**  
 **Statement of Financial Condition**  
 **December 31, 2022**---

# **Assets**

| Cash | $7,705,738 |
| --- | --- |
| Receivable from clearing broker, net | 3,355,208 |
| Receivable from broker-dealers | 3,458 |
| Right of use asset | 2,538,898 |
| Property and equipment, net | 886,864 |
| Prepaid expenses and other assets | 379,748 |
| Total assets | $14,869,914 |

# **Liabilities and Members' Equity**

| Liabilities |  |
| --- | --- |
| Accrued compensation and related expenses | $739,652 |
| Accounts payable and accrued expenses | 182,366 |
| Lease liability | 3,063,465 |
| Revolving note subordinated to the claims of general creditors | 4,000,000 |
| Payable to affiliate | 1,222 |
| Total liabilities | 7,986,705 |
| Commitments and contingencies (Note 11) |  |
| Members' equity | 6,883,209 |
| Total liabilities and members' equity | $14,869,914 |

The accompanying notes are an integral part of this financial statement.

2

# **First Brokers Securities LLC**
**Notes to Statement of Financial Condition**
**Year Ended December 31, 2022**

# **1. Organization**

First Brokers Securities LLC (the "Company") is a Delaware Limited Liability Company. The Company, which is headquartered in New Jersey, and has a branch office in Juno Beach, Florida, is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company's principal business activity is the brokering of corporate and government debt securities.

The Company is owned 60% by AO-First Brokers LLC and 40% by ICAP Global Broking Inc.

# **Brokerage Capacities**

With regard to certain products, the Company acts in the capacity of either "matched principal" or "name give-up."

When acting in the capacity of "matched principal", the Company acts as a "middleman" or intermediary by serving as the counterparty for identified buyers and sellers in the matching in whole or in part of reciprocal back-to-back trades.

When acting in the "name give-up" capacity, the Company acts in an agency capacity, whereby it connects buyers and sellers and may assist in the negotiation of the price and other material terms of the transaction. At the point at which the parties agree to terms, the Company leaves the buyer and seller to clear and settle through the appropriate market mechanism and records the revenue agreed to by the parties for its services. The receivable from broker dealers in the statement of financial condition is associated with these transactions.

# **Unmatched Principal Transactions**

The Company may and does from time to time acquire unmatched positions as principal including, but not limited to, the following scenarios:

(1) Taking a position to add liquidity for Company customers and to attract market participants to its market. Sometimes the act of posting or providing quotations may result in the Company acquiring a position as principal on an unmatched trade;

(2) As a result of errors or out trades. From time to time, as a result of a bona fide error the Company may in "matched principal" marketplaces acquire a position in resolution of such error (this may also occur when the Company is acting as agent in an exchange based marketplace); and

(3) Executing or facilitating customer orders. This includes, but is not limited to, acquiring a position (i) resulting from partial mismatches in timing between multiple buyers and sellers when facilitating customer orders, (ii) where appropriate, executing in anticipation of customer interest or anticipated orders, and (iii) prior to a position being novated, given-up or settled by the relevant customer(s) and/or for the purposes of gaining the customer(s) access to any applicable clearing and settlement system.

In connection with acquiring positions from unmatched principal transactions and erroneous agency transactions, the Company, while managing and liquidating such positions, may generate a profit or a loss.

3

# **First Brokers Securities LLC**  
**Notes to Statement of Financial Condition**  
**Year Ended December 31, 2022**---

# **2. Summary of Significant Accounting Policies**

# **(a) Basis of Presentation**

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ('U.S. GAAP') requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

# **(b) Cash and Restricted Cash**

The Company considers short-term interest bearing investments with initial maturities of three months or less to be cash equivalents. At December 31, 2022, the Company has no cash equivalents.

Restricted cash is subject to a legal or contractual restriction by third parties as well as a restriction as to withdrawal or use, including restrictions that require the funds to be used for a specified purpose and restrictions that limit the purpose for which the funds can be used. As of December 31, 2022, the Company's restricted cash is the deposit with clearing broker.

# **(c) Fair Value**

The Company utilizes various methods to measure the fair value of most of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the 'exit price') in an orderly transaction between market participants at the measurement date. The three levels of inputs are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Securities listed on a national exchange are valued at the last closing bid price if owned by the Company and the last closing ask price if sold short by the Company on the day of valuation. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Other assets and securities for which market quotations are not readily available are valued at estimated fair value in accordance with U.S. GAAP. The resulting gains and losses are reflected in the statement of operations.

4

# **First Brokers Securities LLC**  
**Notes to Statement of Financial Condition**  
**Year Ended December 31, 2022**---

# **2. Summary of Significant Accounting Policies (continued)**

# **(d) Right of Use Assets and Lease Liabilities**

The Company recognizes its leases in accordance with ASC Topic 842, *Leases* ('ASC 842'). The guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabilities on the statement of financial condition.

The Company conducts an analysis of contracts, including real estate leases and service contracts to identify embedded leases, to determine the initial recognition of right-of-use assets ('ROU') and lease liabilities, which required subjective assessment over the determination of the associated discount rates.

The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, we use our incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The present value of the lease payments was determined using a 3.5% incremental borrowing rate. Right of use assets also exclude lease incentives.

The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise.

The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred.

# **(e) Impairment of Long-Lived Assets**

In accordance with U.S. GAAP, the Company periodically assesses the recoverability of the carrying amounts of long-lived assets whenever events or changes in circumstances occur that indicate the carrying value may not be recoverable. An impairment loss is recognized when expected undiscounted future cash flows are less than the carrying amount of the asset. The impairment loss is the difference by which the carrying amount of the asset exceeds its fair value. At December 31, 2022, there was no impairment loss on the Company's long-lived assets.

# **(f) The Allowance for Credit Losses**

ASC Topic 326, *Financial Instruments - Credit Losses* ('ASC 326'), impacts the impairment model for certain financial assets by requiring a current expected credit loss ('CECL') methodology to estimate expected credit losses over the entire life of the financial asset.

For financial assets measured at amortized cost (e.g. cash, receivables from clearing broker and broker dealers), the Company has evaluated the expected credit losses based on the nature and contractual life or expected life of the financial assets, credit quality of the counter party and immaterial historic and expected losses. The Company concluded that there are de minimus expected credit losses and did not record a reserve for the cash or due from broker balances. The Company continuously monitors these estimates over the life of the receivable.

5

# **First Brokers Securities LLC**  
 **Notes to Statement of Financial Condition**  
 **Year Ended December 31, 2022**---

# **3. Employee Benefits**

The Company sponsors a 401(k) retirement plan (the “Plan”). The Plan covers all employees upon commencement of employment with the Company. The Company does not match employee contributions.

# **4. Securities Owned and Securities Sold Not Yet Purchased**

As more fully described in Note 1, from time-to time the Company may hold securities positions arising from unmatched principal transactions. The Company seeks to reduce the liquidity risk associated with these positions by selling certain securities that are not yet purchased. When these situations occur the Company’s statement of financial condition will reflect securities owned as well as securities sold, not yet purchased. Securities sold not yet purchased consists mainly of US Treasury debt securities that serve as a hedge against corporate debt securities that may be owned. All of the corporate debt securities and the US Treasury debt securities are classified as level 2 securities within the fair value hierarchy. At December 31, 2022, there were no securities owned or securities sold, not yet purchased.

# **5. Property and Equipment**

Property and equipment are depreciated using the straight line method and are comprised of the following as of December 31, 2022:

|  |  | Estimated Useful Lives |
| --- | --- | --- |
| Telephone and computer equipment | $402,951 | 3 to 5 years |
| Furniture and fixtures | 132,300 | 3 to 5 years |
| Leasehold improvements | 1,410,964 | Term of Lease |
| Software | 389,789 | 3 to 5 years |
|  | 2,336,004 |  |
| Less: Accumulated depreciation and amortization | (1,449,140) |  |
|  | $886,864 |  |

# **6. Related Party Transactions**

The Company entered into agreements whereby subsidiaries of the minority owner provide certain services to the Company.

The terms of any of these transactions may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties.

As of December 31, 2022, the Company has a payable of approximately $186,000 to a related party which is included in accrued compensation and related expenses on the statement of financial condition.

# **7. Due from Clearing Broker**

Pursuant to an amended agreement with a clearing broker, the Company is required to maintain a clearing deposit of $2,000,000, which is included in the net receivable from clearing broker in the accompanying statement of financial condition.

In the normal course of its business, the Company indemnifies its clearing broker against specified potential losses in connection with its acting as an agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under this indemnification cannot be estimated. However, the Company believes that it is unlikely it will have to make payments under these arrangements and, as such, has not recorded any contingent liability in the financial statements for this indemnification.

6

# **First Brokers Securities LLC**  
**Notes to Statement of Financial Condition**  
**Year Ended December 31, 2022**---

# **8. Revolving Note and Cash Subordination**

On October 15, 2021, the Company entered into a Revolving Note and Cash Subordination Agreement (the 'Revised Agreement') with ICAP Securities USA LLC, an affiliate of ICAP Broker Holdings North America (IBHNA). The Revised Agreement creates a $4,000,000 line of credit with a draw down period that expires on October 15, 2023 and requires that any advances under the Revised Agreement be repaid by no later than October 15, 2024.

The interest rates will be agreed to at the time of each advance. Any advances will be considered as liabilities of the Company, subordinated to claims of its general creditors, and will be available to be added back for net capital purposes. During the year ended December 31, 2022, the Company borrowed $52,000,000 and repaid $52,000,000 resulting in an open note balance of $4,000,000. All 2022 borrowings bore interest at 5.5%.

# **9. Net Capital Requirements**

The Company is subject to the SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934, (the 'Rule') which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company computes its net capital under the alternative method permitted by the Rule, which requires that the Company maintain minimum net capital, as defined. At December 31, 2022, the Company's net capital was approximately $9,613,000 which was approximately $9,363,000 in excess of its minimum requirement of $250,000.

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to clearing all transactions with and for customers on a fully disclosed basis with a clearing broker.

# **10. Concentration**

Substantially all of the cash assets of the Company are held by one bank and a single clearing broker-dealer. The Company has a significant cash receivable from its clearing broker and in addition all of the Company's securities owned and its securities sold but not yet purchased are carried by this single clearing broker-dealer. The Company does not consider itself to be at any significant risk with respect to these concentrations. At times cash balances exceed FDIC limits.

As described in the preceding notes, the Company may hold unmatched principal positions and related short positions. When these securities positions arise, the amounts of the securities within the categories may be significant and may also represent securities issued by a small number of issuers.

7

# **First Brokers Securities LLC**  
**Notes to Statement of Financial Condition**  
**Year Ended December 31, 2022**---

# **11. Commitments and Contingencies**

The Company has entered into operating leases for its facilities in New Jersey and Florida. The Company records the expenses to occupy its facilities on a straight line basis over the lease term.

As of December 31, 2022, maturities of the outstanding lease liability for the Company were approximately as follows:

| Year ending December 31: |  |
| --- | --- |
| 2023 | $618,000 |
| 2024 | 662,000 |
| 2025 | 676,000 |
| 2026 | 691,000 |
| 2027 | 705,000 |
| Thereafter | 48,000 |
| Total | 3,400,000 |
| Discount to present value | 337,000 |
| Lease Liability | $3,063,000 |

Other information related to leases as of December 31, 2022:

Weighted average remaining lease term: 4.42 years.

Weighted average discount rate: 3.5%

# **12. Subsequent Events**

Management of the Company has evaluated events and transactions that have occurred since December 31, 2022 and through February 20, 2023 and determined there are no subsequent events that occurred during this period that would require recognition or disclosure in these financial statements.

8

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

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0000867810

**Filer CCC:** XXXXXXXX

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

**Would you like a Return Copy?:** No

### 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:** FIRST BROKERS SECURITIES LLC

**Business Address:** HARBORSIDE 5, 185 HUDSON STREET, SUITE 1500, JERSEY CITY, NJ, 07311

**Contact Person:** Robert Dower

**Contact Phone:** 973-277-5286

### Independent Public Accountant Identification

**Accountant Name:** Citrin Cooperman & Company, LLP

**Accountant Address:** 50 Rockefeller Plaza, New York, NY, 10020

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Robert Dower**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **FIRST BROKERS SECURITIES LLC**, as of **12-31-2022**, are true and correct.

**Signature:** Robert Dower

**Title:** CFO

**Notarized:** Yes