# EDGAR Filing Document

**Accession Number:** 0000024100
**File Stem:** 0000024100-23-000002
**Filing Date:** 2023-2
**Character Count:** 34617
**Document Hash:** 314cc931f02d9e4217b583887b96b871
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000024100-23-000002.hdr.sgml**: 20230228

**ACCESSION NUMBER**: 0000024100-23-000002

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

**PUBLIC DOCUMENT COUNT**: 4

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230228

**DATE AS OF CHANGE**: 20230228

**EFFECTIVENESS DATE**: 20230228

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TOUCHSTONE SECURITIES, INC.
- **CENTRAL INDEX KEY:** 0000024100
- **IRS NUMBER:** 476046379
- **STATE OF INCORPORATION:** NE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-14052
- **FILM NUMBER:** 23688955

**BUSINESS ADDRESS:**
- **STREET 1:** 303 BROADWAY
- **STREET 2:** SUITE 1100
- **CITY:** CINCINNATI
- **STATE:** OH
- **ZIP:** 45202
- **BUSINESS PHONE:** 513-362-8176

**MAIL ADDRESS:**
- **STREET 1:** 303 BROADWAY
- **STREET 2:** SUITE 1100
- **CITY:** CINCINNATI
- **STATE:** OH
- **ZIP:** 45202

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TOUCHSTONE SECURITIES INC/OH/
- **DATE OF NAME CHANGE:** 20000101

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INTERACTIVE FINANCIAL SOLUTIONS INC
- **DATE OF NAME CHANGE:** 19970306

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TOUCHSTONE SECURITIES INC                               /BD
- **DATE OF NAME CHANGE:** 19960628

### Attached PDF Documents

**Attachment 1:** `exemptionreport.pdf`

EY
Building a better
working world

Ernst & Young LLP
221 East 4th Street
Suite 2900
Cincinnati, OH 45202

Tel: +1 513 612 1400
ey.com

# Report of Independent Registered Public Accounting Firm

The Board of Directors and Management of Touchstone Securities, Inc.

We have reviewed management's statements, included in the accompanying Touchstone Securities, Inc.'s Exemption Report, in which Touchstone Securities, Inc. (the Company) stated that:

(1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3, and

(2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to (1) engaging in the wholesale distribution of mutual funds and variable insurance products (2) effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception.

Management is responsible for compliance with 17 C.F.R. § 240.15c3-3 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 the Company'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 Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5.

This report is intended solely for the information and use of the Board of Directors, management, the SEC, FINRA, other regulatory agencies that rely on Rule 17a-5 under the Securities Exchange Act of 1934 in their regulation of registered brokers and dealers, and other recipients specified by Rule 17a-5(d)(6) and is not intended to be and should not be used by anyone other than these specified parties.

February 28, 2023

1

# Touchstone Investments®

A member of Western & Southern Financial Group

# Touchstone Securities, Inc.'s Exemption Report

Touchstone Securities, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following:

(1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3, and
(2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No.

34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to (1) engaging in the wholesale distribution of mutual funds and variable insurance products (2) effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception.

Touchstone Securities, Inc.

I, Terrie A. Wiedenheft, affirm that, to my best knowledge and belief, this Exemption Report is true and correct.

Terrie A. Wiedenheft

Title: Sr. VP & Chief Financial Officer

February 28, 2023

# Touchstone Securities, Inc.

## Exemption Report Exception Log

### For the Year Ended December 31, 2022

Date Received

Date Sent

CK/TS

Check Amount

No exceptions reported

**Attachment 2:** `sipcreport.pdf`

**EY**  
Building a better  
working world

Ernst & Young LLP  
221 East 4$^{th}$ Street  
Suite 2900  
Cincinnati, OH 45202

Tel: +1 513 612 1400  
ey.com

## **Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon Procedures**

To the Board of Directors and Management of Touchstone Securities, Inc:

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 fiscal year ended December 31, 2022. Management of Touchstone Securities, Inc (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 our findings are as follows:

1. Compared the assessment payments made in accordance with the General Assessment Payment Form (Form SIPC-6) and applied to the General Assessment calculation on Form SIPC-7 with respective cash disbursement record entries.

No findings were found as a result of applying the procedure.

2. Compared the amounts reported in the audited financial statements required by SEC Rule 17a-5 with the amounts reported in Form SIPC-7 for the fiscal year ended December 31, 2022.

No findings were found as a result of applying the procedure.

3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers supporting the adjustments.

1

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

Not applicable as there were no adjustments reported in Form SIPC-7.

4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the schedules and working papers supporting the adjustments.

No findings were found as a result of applying the procedure.

5. Compared the amount of any overpayment applied with the Form SIPC-7 on which it was computed.

No findings were found as a result of applying the procedure.

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 American Institute of Certified Public Accountants and in accordance with the standards of the Public Company Accounting Oversight Board (United States). An agreed-upon procedures engagement involves the practitioner performing specific procedures that the engaging party has agreed to and acknowledged to be appropriate for the purpose of the engagement and reporting on findings based on the procedures performed. 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 specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties.

*Ernst & Young LLP*

February 28, 2023

2

**Attachment 3:** `touchstonesecurities.pdf`

# STATEMENT OF FINANCIAL CONDITION

Touchstone Securities, Inc.

Year ended December 31, 2022

With Report of Independent Registered Public Accounting Firm

# 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

8-14052

# 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: Touchstone Securities, Inc.

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.)

303 Broadway, Suite 1100

| (No. and Street) |  |  |
| --- | --- | --- |
| Cincinnati | Ohio | 45202 |
| (City) | (State) | (Zip Code) |

PERSON TO CONTACT WITH REGARD TO THIS FILING

Terrie A. Wiedenheft

(513)-362-8242

terrie.wiedenheft@wslife.com

(Name)

(Area Code - Telephone Number)

(Email Address)

# B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*

Ernst & Young LLP

| (Name - if individual, state last, first, and middle name) |  |  |  |
| --- | --- | --- | --- |
| 221 East 4th Street, Suite 2900 | Cincinnati | Ohio | 45202 |
| (Address) | (City) | (State) | (Zip Code) |
| 10/20/2003 |  | 00042 |  |

(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, Terrie A. Wiedenheft, swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Touchstone Securities, Inc., 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.

Kathryn F. Partin
Notary Public
KATHRYN F. PARTIN
Notary Public, State of Ohio
My Commission Expires 06-07-2024
Signature: Terrie A. Wiedenheft
Title:
Sr VP CFO and Chief Operating Officer

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.

# Touchstone Securities, Inc.

# Statement of Financial Condition

Year ended December 31, 2022

# **Contents**

| Report of Independent Registered Public Accounting Firm | 1 |
| --- | --- |
| Audited Financial Statements |  |
| Statement of Financial Condition | 2 |
| Notes to Financial Statements | 3 |

# Report of Independent Registered Public Accounting Firm

To the Stockholder and the Board of Directors of Touchstone Securities, Inc.

## Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of Touchstone Securities, Inc. (the Company) as of December 31, 2022 and the related notes (the “financial statement”). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2022, in conformity with U.S. generally accepted accounting principles.

## 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 the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

*Ernst & Young LLP*

We have served as the Company’s auditor since 1999.

Cincinnati, OH

February 28, 2023

1

# Touchstone Securities, Inc.  
Statement of Financial Condition

December 31, 2022

# **Assets**

| Cash and cash equivalents | $22,956,988 |
| --- | --- |
| Unaffiliated accounts receivable | 80,114 |
| Receivable from affiliates | 2,109,014 |
| Federal income tax receivable from affiliate | 2,398,828 |
| Deferred income tax asset from affiliate | 31,920 |
| Deferred commission costs | 297,200 |
| Prepaid and other assets | 494,223 |
| Total assets | $28,368,287 |

# **Liabilities and stockholder's equity**

# Liabilities:

| Payable to affiliates | $2,689,628 |
| --- | --- |
| Accrued commissions | 1,830,799 |
| Accrued sales distribution | 8,467,202 |
| Accrued other expenses | 459,130 |
| Total liabilities | 13,446,759 |

# Stockholder's equity:

| Common stock, $100 par value, 1,000 shares authorized, issued and outstanding | 100,000 |
| --- | --- |
| Additional paid-in capital | 338,624,377 |
| Accumulated deficit | (323,802,849) |
| Total stockholder's equity | 14,921,528 |
| Total liabilities and stockholder's equity | $28,368,287 |

*See accompanying notes.*

2

Touchstone Securities, Inc.  
Notes to Financial Statements  
December 31, 2022---

## 1. Organization and Nature of Business

Touchstone Securities, Inc. (the Company) is a wholly-owned subsidiary of IFS Financial Services, Inc., which is a wholly-owned subsidiary of Western-Southern Life Assurance Company (WSLAC), which is a wholly-owned subsidiary of The Western and Southern Life Insurance Company (WSLIC). The Company is registered as a broker-dealer in securities under the Securities Exchange Act of 1934. The Company is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investors Protection Corporation (SIPC). The Company distributes the Touchstone Family of Mutual Funds (the Touchstone Funds), a related party, variable annuities of its affiliates through affiliated sales representatives, and serves as placement agent for affiliated private equity fund limited partnership interests. The Company generates substantially all of its revenue from transactions with affiliates. The Company operates in one business segment that serves as distributor and underwriter for affiliates. The Company's determination that it has one operating segment is based on the fact that the officers review the Company's financial performance and allocate resources on an aggregate level.

## 2. Significant Accounting Policies

### Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly-liquid investments with a maturity of three months or less at the date of purchase, including investments in money market funds, which are valued at net asset value. Investments in money market funds are considered level 1 investments in the fair value hierarchy under ASC 820. Level 1 securities are valued using unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. As of December 31, 2022, the Company held an investment of $22,475,507 in the money market fund, which serves as a sweep account for the cash accounts that comprise the remaining balance in cash and cash equivalents. This amount is included in *Cash and cash equivalents* on the Statement of Financial Condition.

### Deferred Commission Costs

The Company pays commissions to brokers who sell $1 million or more of class A shares and on all sales of class C shares of the Touchstone Funds. If the shares are redeemed within a year of their purchase, a contingent deferred sales charge ('CDSC') of up to 1.00% will be charged to the shareholder on the redemption, therefore, the commission costs incurred by the Company are capitalized and amortized over the 12 month CDSC period. As of December 31, 2022, the Company had deferred commission costs of $297,200. This amount is included in *Deferred commission costs* on the Statement of Financial Condition.

### Current Expected Credit Loss

The Financial Accounting Standards Board (FASB) issued in Accounting Standards Update (ASU) 2016-13 which significantly changes how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The ASU requires entities to estimate an expected lifetime credit loss on financial assets ranging from short-term trade accounts

3

Touchstone Securities, Inc.  
Notes to Financial Statements  
December 31, 2022---

receivable to long-term financings. The Company has assessed the allowance and determined there was no material impact on the financial statements.

## Income Taxes

The Company is included in the consolidated federal income tax return with its ultimate parent, Western & Southern Mutual Holding Company. ASC 740, *Income Taxes*, requires a systematic and rational allocation of tax expense to members of the consolidated group. Accordingly, the Company records a provision for income taxes under the separate return method as permitted under ASC 740. The benefit from losses of the Company is available to offset income of others within the consolidated group or the Company's future taxable income within the period of limitations, in accordance with the Company's tax sharing agreement.

The gross amount of deferred tax assets recorded at December 31, 2022 is $31,920. The Company had no gross deferred income tax liabilities at December 31, 2022. The deferred tax assets are primarily attributable to certain accruals not currently deductible. Differences between the effective tax rate and the federal income tax rate are due to adjustments for state income taxes and meals and entertainment. There was no valuation allowance as of December 31, 2022 and no changes from prior year. The amount of taxes currently receivable from WSLIC as of December 31, 2022 was $2,398,828 and is included in *Federal income tax receivable from affiliate* on the Statement of Financial Condition.

The Company recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. The Company recognizes interest and penalties, if any, related to uncertain tax positions within federal income tax expense on the Statement of Operations. The Company has reviewed its tax positions taken on federal income tax returns for all open tax years (tax years ended December 31, 2014 through 2021) and has determined that no provisions for uncertain tax positions is required in the financial statements.

## COVID-19

The Company is exposed to risk associated with the ongoing outbreak of coronavirus ('COVID-19') and is actively monitoring developments through governmental briefings and the relevant health authorities. The effects of the outbreak on the Company are uncertain and difficult to predict, as the situation continues to evolve. Risks include (but are not limited to) the disruption of business operations due to changing work environments for employees and business partners; and disruptions of product marketing and sales efforts. The Company has business continuity plans in place to mitigate the risks posed to business operations by disruptive incidents such as these.

## Use of Estimates

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

4

Touchstone Securities, Inc.  
Notes to Financial Statements  
December 31, 2022---

### 3. Related-Party Transactions

The Company serves as a distributor for annuity contracts and variable life products sold by its affiliates WSLAC, Columbus Life Insurance Company (CLIC), Integrity Life Insurance Company, and National Integrity Life Insurance Company (the Integrity Companies).

The Company receives sales distribution revenue (12b-1 fees) from the Touchstone Funds as compensation for sales distribution efforts of the Company.

The Company paid an affiliate, W&S Brokerage Services, Inc. (WSBS) for providing administrative support services in connection with certain variable annuity and mutual fund sales.

The Company paid WSBS sales distribution fees pursuant to its distribution agreement.

The Company paid WSBS commissions on sales of annuity contracts pursuant to its selling agreement.

The Company serves as placement agent to offer for sale certain membership or limited partnership interests sold by its affiliate Fort Washington Investment Advisors, Inc. The Company recorded commission income and administrative revenue for performing its obligations under the agreement.

The Company paid an affiliate, Touchstone Advisors a fee for an allocation of shared service of officer expenses.

The Company reimburses WSLIC for employee compensation and benefits expense.

The Company shares common facilities, equipment, personnel and administrative services with affiliated entities. The Company reimburses such entities for the use of facilities, equipment, personnel and services based generally on office space utilized, direct payroll costs incurred and out-of-pocket expenses.

WSLAC has committed to fund operations of the Company to the extent necessary for the Company to continue as a going concern.

### 4. Benefit Plans

The eligible full-time employees of the Company are covered under the Western-Southern Affiliated Company Employee Retirement 401(k) Savings Plan (the Savings Plan), which is a contributory plan. Employees of the Company can contribute an amount not less than 1% of their periodic compensation up to the maximum annual contribution allowed by current law.

Employee contributions become eligible for Company match beginning the first month following the first 12-month period during which the employee worked a minimum of 1,000 hours. In years where WSLIC exceeds its business expectations, the Company's matching contribution could increase to as much as half of eligible contributions up to 6%. The Company matched one half of eligible contributions up to a match of 6% in 2022.

5

# Touchstone Securities, Inc.  
Notes to Financial Statements  
December 31, 2022---

Effective January 1, 2010, eligible employees of the Company are covered under the Western & Southern Pension Plan (the Pension Plan), which is a defined benefit plan that provides a lifetime annuity upon retirement that is based on a percentage of the final average pay and years of service under the Pension Plan.

Certain employees of the Company are covered under the Western & Southern Affiliated Companies Supplemental Executive Retirement Plan (SERP), which is established for the purpose of providing deferred compensation to selected employees considered highly compensated under ERISA. The SERP is intended to qualify as an unfunded plan and to comply with section 409A of the Internal Revenue Code.

## 5. Indemnifications

The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

The Company is a party to various legal actions arising in the ordinary course of its operations. The Company's potential losses in connection with such claims cannot be reasonably estimated, as there is significant uncertainty regarding the outcome of the related legal proceedings. The Company believes that the ultimate resolution of these matters will not materially impact its financial position, results of operations or cash flows.

On December 7, 2020, a settlement was reached in a lawsuit against the Company. In conjunction with the lawsuit, the Company estimated and recorded a settlement expense of $300,000. This settlement expense was accrued and expensed in 2020 and the actual settlement amount of $300,000 was paid on January 8, 2021.

## 6. Going Concern

Management has evaluated the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Management has considered conditions, specifically historical operating losses, that could raise substantial doubt about the Company's ability to continue as a going concern. Management has implemented a plan that includes a funding commitment through capital contributions from affiliate WSLAC, which mitigates the conditions that raise substantial doubt. As such, management has concluded that the Company has the ability to continue as a going concern for at least one year following the date that these financial statements are issued.

6

# Touchstone Securities, Inc.  
Notes to Financial Statements  
December 31, 2022---

## **7. Subsequent Events**

Management has evaluated the impact of all subsequent events on the Company through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

## **8. Regulatory Requirements**

The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule 15c3-1 (the Rule), which requires that the Company maintain a minimum net capital level of the greater of $5,000 or 6 2/3% of aggregate indebtedness, and a ratio of aggregate indebtedness to net capital not to exceed 15 to 1, as those terms are defined by the Rule. At December 31, 2022, the Company's net capital, as defined, was $9,060,719, which was $8,162,579 in excess of required net capital, and its ratio of aggregate indebtedness to net capital was 1.5 to 1.0.

7

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

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0000024100

**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:** TOUCHSTONE SECURITIES, INC.

**Business Address:** 303 BROADWAY, SUITE 1100, CINCINNATI, OH, 45202

**Contact Person:** Mark Jonas

**Contact Phone:** 513-362-8052

### Independent Public Accountant Identification

**Accountant Name:** Ernst & Young

**Accountant Address:** 221 East 4th St, Suite 2900, Cincinnati, OH, 45202

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Terrie A. Wiedenheft**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **TOUCHSTONE SECURITIES, INC.**, as of **12-31-2022**, are true and correct.

**Signature:** Terrie A. Wiedenheft

**Title:** Sr VP CFO & Chief Operating Officer

**Notarized:** Yes