Financial Assets And Financial Liabilities

9 Months Ended

Sep. 30, 2021

Financial Assets And Financial Liabilities [Abstract]

Financial Assets And Financial Liabilities

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6. Financial Assets and Financial Liabilities

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The tables below present, by level within the fair value hierarchy (see Note 2), financial assets and liabilities, measured at fair value on a recurring basis for the periods indicated. As required by ASC Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement.



	Financial Assets at Fair Value as of September 30, 2021

	Level 1		Level 2		Level 3		Total

	(in millions)

Securities segregated for regulatory purposes	$	3,925	$	—	$	—	$	3,925
Financial instruments owned, at fair value
Stocks		582		—		—		582
Options		31		—		—		31
U.S. and foreign government securities		33		—		—		33
Corporate bonds		—		—		1		1
Precious metals		—		11		—		11
Currency forward contracts		—		1		—		1
Total financial instruments owned, at fair value		646		12		1		659

Other assets - other investments at fair value		106		—		—		106
Total financial assets at fair value	$	4,677	$	12	$	1	$	4,690



	Financial Liabilities at Fair Value as of September 30, 2021
	Level 1		Level 2		Level 3		Total

	(in millions)

Financial instruments sold, but not yet purchased, at fair value
Stocks	$	149	$	—	$	—	$	149
Options		32		—		—		32
Precious metals		—		5		—		5
Currency forward contracts		—		47		—		47
Total financial instruments sold, but not yet purchased, at fair value		181		52		—		233
Total financial liabilities at fair value	$	181	$	52	$	—	$	233


	Financial Assets at Fair Value as of December 31, 2020
	Level 1		Level 2		Level 3		Total

	(in millions)

Securities segregated for regulatory purposes	$	4,750	$	—	$	—	$	4,750
Financial instruments owned, at fair value
Stocks		558		—		1		559
Options		28		—		—		28
U.S. and foreign government securities		33		—		—		33
Corporate bonds		—		—		1		1
Currency forward contracts		—		9		—		9
Total financial instruments owned, at fair value		619		9		2		630

Other assets - other investments at fair value		80		—		—		80
Total financial assets at fair value	$	5,449	$	9	$	2	$	5,460

	Financial Liabilities at Fair Value as of December 31, 2020
	Level 1		Level 2		Level 3		Total

	(in millions)

Financial instruments sold, but not yet purchased, at fair value
Stocks	$	120	$	—	$	—	$	120
Options		26		—		—		26
Currency forward contracts		—		7		—		7
Total financial instruments sold, but not yet purchased, at fair value		146		7		—		153
Total financial liabilities at fair value	$	146	$	7	$	—	$	153

Level 3 Financial Assets and Financial Liabilities

The Company’s Level 3 financial assets are comprised of delisted and illiquid securities reported within financial instruments owned, at fair value in the condensed consolidated statements of financial condition. As of September 30, 2021, Level 3 financial assets included $1 million in corporate bonds which were not traded in active markets and were valued by the Company based on internal estimates.

Financial Assets and Liabilities Not Measured at Fair Value

The tables below represent the carrying value, fair value and fair value hierarchy category of certain financial assets and liabilities that are not recorded at fair value in the Company's condensed consolidated statements of financial condition for the periods indicated. The tables below exclude certain financial instruments such as equity method investments and all non-financial assets and liabilities.



	September 30, 2021
	Carrying ‎Value		Fair ‎Value		Level 1		Level 2		Level 3

	(in millions)

Financial assets, not measured at fair value
Cash and cash equivalents	$	2,838	$	2,838	$	2,838	$	—	$	—
Cash - segregated for regulatory purposes		23,125		23,125		23,125		—		—
Securities - segregated for regulatory purposes		10,475		10,475		—		10,475		—
Securities borrowed		3,811		3,811		—		3,811		—
Securities purchased under agreements to resell		6,108		6,108		—		6,108		—
Receivables from customers		50,503		50,503		—		50,503		—
Receivables from brokers, dealers and clearing organizations		4,038		4,038		—		4,038		—
Interest receivable		113		113		—		113		—
Other assets		19		19		—		2		17
Total financial assets, not measured at fair value	$	101,030	$	101,030	$	25,963	$	75,050	$	17



Financial liabilities, not measured at fair value
Short-term borrowings	$	28	$	28	$	—	$	28	$	—
Securities loaned		10,535		10,535		—		10,535		—
Payables to customers		84,087		84,087		—		84,087		—
Payables to brokers, dealers and clearing organizations		781		781		—		781		—
Interest payable		10		10		—		10		—
Total financial liabilities, not measured at fair value	$	95,441	$	95,441	$	—	$	95,441	$	—

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	December 31, 2020
	Carrying ‎Value		Fair ‎Value		Level 1		Level 2		Level 3

	(in millions)

Financial assets, not measured at fair value
Cash and cash equivalents	$	4,292	$	4,292	$	4,292	$	—	$	—
Cash - segregated for regulatory purposes		15,903		15,903		15,903		—		—
Securities - segregated for regulatory purposes		23,071		23,071		—		23,071		—
Securities borrowed		4,956		4,956		—		4,956		—
Securities purchased under agreements to resell		792		792		—		792		—
Receivables from customers		39,333		39,333		—		39,333		—
Receivables from brokers, dealers and clearing organizations		1,254		1,254		—		1,254		—
Interest receivable		104		104		—		104		—
Other assets		13		13		—		2		11
Total financial assets, not measured at fair value	$	89,718	$	89,718	$	20,195	$	69,512	$	11



Financial liabilities, not measured at fair value
Short-term borrowings	$	118	$	118	$	—	$	118	$	—
Securities loaned		9,838		9,838		—		9,838		—
Payables to customers		75,882		75,882		—		75,882		—
Payables to brokers, dealers and clearing organizations		182		182		—		182		—
Interest payable		6		6		—		6		—
Total financial liabilities, not measured at fair value	$	86,026	$	86,026	$	—	$	86,026	$	—

Netting of Financial Assets and Financial Liabilities

The Company’s policy is to net securities borrowed and securities loaned, and securities purchased under agreements to resell and securities sold under agreements to repurchase that meet the offsetting requirements prescribed in ASC Topic 210-20. In the tables below, the amounts of financial instruments that are not offset in the condensed consolidated statements of financial condition, but could be netted against cash or financial instruments with specific counterparties under master netting agreements, according to the terms of the agreements, including clearing houses (exchange-traded options, warrants and discount certificates) or over the counter currency forward contract counterparties, are presented to provide financial statement readers with the Company’s net payable or receivable with counterparties for these financial instruments.

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The tables below present the netting of financial assets and financial liabilities for the periods indicated.



	September 30, 2021
	Gross			Amounts			Net Amounts		Amounts Not Offset
	Amounts			Offset in the			Presented in		in the Condensed
	of Financial			Condensed			the Condensed		Consolidated Statements
	Assets and			Consolidated			Consolidated		of Financial Condition
	Liabilities			Statements of			Statements of		Cash or Financial
	Recognized			Financial Condition		²	Financial Condition		Instruments		Net Amount

	(in millions)
Offsetting of financial assets
Securities segregated for regulatory purposes - purchased under agreements to resell	$	10,475	¹	$	—		$	10,475	$	(10,475)	$	—
Securities borrowed		3,811			—			3,811		(3,681)		130
Securities purchased under agreements to resell		6,108			—			6,108		(6,108)		—
Financial instruments owned, at fair value
Options		31			—			31		(31)		—
Currency forward contracts		1			—			1		—		1
Total	$	20,426		$	—		$	20,426	$	(20,295)	$	131


	(in millions)
Offsetting of financial liabilities
Securities loaned	$	10,535	$	—	$	10,535	$	(9,934)	$	601
Financial instruments sold, but not yet purchased, at fair value
Options		32		—		32		(31)		1
Currency forward contracts		47		—		47		—		47
Total	$	10,614	$	—	$	10,614	$	(9,965)	$	649

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	December 31, 2020
		Gross		Amounts			Net Amounts		Amounts Not Offset
		Amounts		Offset in the			Presented in		in the Condensed
		of Financial		Condensed			the Condensed		Consolidated Statements
		Assets and		Consolidated			Consolidated		of Financial Condition
		Liabilities		Statements of			Statements of		Cash or Financial
		Recognized		Financial Condition		²	Financial Condition		Instruments		Net Amount

	(in millions)
Offsetting of financial assets
Securities segregated for regulatory purposes - purchased under agreements to resell	$	23,071	¹	$	—		$	23,071	$	(23,071)	$	—
Securities borrowed		4,956			—			4,956		(4,716)		240
Securities purchased under agreements to resell		792			—			792		(792)		—
Financial instruments owned, at fair value
Options		28			—			28		(25)		3
Currency forward contracts		9			—			9		—		9
Total	$	28,856		$	—		$	28,856	$	(28,604)	$	252


	(in millions)
Offsetting of financial liabilities
Securities loaned	$	9,838	$	—	$	9,838	$	(9,246)	$	592
Financial instruments sold, but not yet purchased, at fair value
Options		26		—		26		(25)		1
Currency forward contracts		7		—		7		—		7
Total	$	9,871	$	—	$	9,871	$	(9,271)	$	600

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(1)As of September 30, 2021 and December 31, 2020, the Company had $10.5 billion and $23.1 billion, respectively, of securities purchased under agreements to resell that were segregated to satisfy regulatory requirements. These securities are included in “Securities - segregated for regulatory purposes” in the condensed consolidated statements of financial condition.
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(2)The Company did not have any balances eligible for netting in accordance with ASC Topic 210-20 at September 30, 2021 and December 31, 2020.

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Secured Financing Transactions – Maturities and Collateral Pledged

The tables below present gross obligations for securities loaned transactions by remaining contractual maturity and class of collateral pledged for the periods indicated.



	September 30, 2021
	Remaining Contractual Maturity
	Overnight		Less than		30 – 90		Over 90
	and Open		30 days		days		days		Total

	(in millions)

Securities loaned
Stocks	$	10,483	$	—	$	—	$	—	$	10,483
Corporate bonds		52		—		—		—		52
Total securities loaned	$	10,535	$	—	$	—	$	—	$	10,535


	December 31, 2020
	Remaining Contractual Maturity
	Overnight		Less than		30 – 90		Over 90
	and Open		30 days		days		days		Total

	(in millions)

Securities loaned
Stocks	$	9,811	$	—	$	—	$	—	$	9,811
Corporate bonds		27		—		—		—		27
Total securities loaned	$	9,838	$	—	$	—	$	—	$	9,838

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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