Financial Assets And Financial Liabilities

6 Months Ended

Jun. 30, 2023

Financial Assets And Financial Liabilities [Abstract]

Financial Assets And Financial Liabilities

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 June 30, 2023

	Level 1		Level 2		Level 3		Total

	(in millions)

Securities segregated for regulatory purposes
U.S. and foreign government securities	$	6,228	$	—	$	—	$	6,228
Municipal securities		—		39		—		39
Total securities segregated for regulatory purposes		6,228		39		—		6,267

Financial instruments owned, at fair value
Stocks		433		—		—		433
Options		20		—		—		20
U.S. and foreign government securities		29		—		—		29
Precious metals		—		11		—		11
Currency forward contracts		—		2		—		2
Total financial instruments owned, at fair value		482		13		—		495

Other assets
Customer-held fractional shares		121		—		—		121
Crypto-asset safeguarding asset		—		118		—		118
Other investments in equity securities		29		—		—		29
Total other assets		150		118		—		268
Total financial assets at fair value	$	6,860	$	170	$	—	$	7,030



	Financial Liabilities at Fair Value as of June 30, 2023
	Level 1		Level 2		Level 3		Total

	(in millions)

Financial instruments sold, but not yet purchased, at fair value
Stocks	$	118	$	—	$	—	$	118
Options		22		—		—		22
Precious metals		—		8		—		8
Currency forward contracts		—		9		—		9
Total financial instruments sold, but not yet purchased, at fair value		140		17		—		157

Accounts payable, accrued expenses and other liabilities
Fractional shares repurchase obligation		121		—		—		121
Crypto-asset safeguarding liability		—		118		—		118
Total accounts payable, accrued expenses and other liabilities		121		118		—		239
Total financial liabilities at fair value	$	261	$	135	$	—	$	396

	Financial Assets at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total

	(in millions)

Securities segregated for regulatory purposes
U.S. and foreign government securities	$	4,641	$	—	$	—	$	4,641
Municipal securities		—		82		—		82
Total securities segregated for regulatory purposes		4,641		82		—		4,723

Financial instruments owned, at fair value
Stocks		380		—		—		380
Options		31		—		—		31
U.S. and foreign government securities		35		—		—		35
Precious metals		—		9		—		9
Currency forward contracts		—		30		—		30
Total financial instruments owned, at fair value		446		39		—		485

Other assets
Customer-held fractional shares		91		—		—		91
Crypto-asset safeguarding asset		—		80		—		80
Other investments in equity securities		34		—		—		34
Total other assets		125		80		—		205
Total financial assets at fair value	$	5,212	$	201	$	—	$	5,413



	Financial Liabilities at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3		Total

	(in millions)
Financial instruments sold, but not yet purchased, at fair value
Stocks	$	121	$	—	$	—	$	121
Options		16		—		—		16
Precious metals		—		7		—		7
Currency forward contracts		—		2		—		2
Total financial instruments sold, but not yet purchased, at fair value		137		9		—		146

Accounts payable, accrued expenses and other liabilities
Fractional shares repurchase obligation		91		—		—		91
Crypto-asset safeguarding liability		—		80		—		80
Total accounts payable, accrued expenses and other liabilities		91		80		—		171
Total financial liabilities at fair value	$	228	$	89	$	—	$	317

Level 3 Financial Assets and Financial Liabilities

There were no transfers in or out of level 3 for the six months ended June 30, 2023.

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Financial Assets and Liabilities Not Measured at Fair Value

Financial assets and liabilities not measured at fair value are recorded at carrying value, which approximates fair value due to their short-term nature. 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.



	June 30, 2023
	Carrying ‎Value		Fair ‎Value		Level 1		Level 2		Level 3

	(in millions)
Financial assets, not measured at fair value
Cash and cash equivalents	$	3,681	$	3,681	$	3,681	$	—	$	—
Cash – segregated for regulatory purposes		25,770		25,770		25,770		—		—
Securities – segregated for regulatory purposes		27,190		27,190		—		27,190		—
Securities borrowed		5,999		5,999		—		5,999		—
Securities purchased under agreements to resell		6,431		6,431		—		6,431		—
Receivables from customers		41,966		41,966		—		41,966		—
Receivables from brokers, dealers and clearing organizations		1,400		1,400		—		1,400		—
Interest receivable		391		391		—		391		—
Other assets		17		18		—		2		16
Total financial assets, not measured at fair value	$	112,845	$	112,846	$	29,451	$	83,379	$	16



Financial liabilities, not measured at fair value
Short-term borrowings	$	17	$	17	$	—	$	17	$	—
Securities loaned		10,261		10,261		—		10,261		—
Payables to customers		95,999		95,999		—		95,999		—
Payables to brokers, dealers and clearing organizations		376		376		—		376		—
Interest payable		270		270		—		270		—
Total financial liabilities, not measured at fair value	$	106,923	$	106,923	$	—	$	106,923	$	—

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	December 31, 2022
	Carrying ‎Value		Fair ‎Value		Level 1		Level 2		Level 3

	(in millions)

Financial assets, not measured at fair value
Cash and cash equivalents	$	3,436	$	3,436	$	3,436	$	—	$	—
Cash – segregated for regulatory purposes		25,167		25,167		25,167		—		—
Securities – segregated for regulatory purposes		27,058		27,058		—		27,058		—
Securities borrowed		4,749		4,749		—		4,749		—
Securities purchased under agreements to resell		6,029		6,029		—		6,029		—
Receivables from customers		38,760		38,760		—		38,760		—
Receivables from brokers, dealers and clearing organizations		3,469		3,469		—		3,469		—
Interest receivable		341		341		—		341		—
Other assets		17		18		—		2		16
Total financial assets, not measured at fair value	$	109,026	$	109,027	$	28,603	$	80,408	$	16



Financial liabilities, not measured at fair value
Short-term borrowings	$	18	$	18	$	—	$	18	$	—
Securities loaned		8,940		8,940		—		8,940		—
Payables to customers		93,195		93,195		—		93,195		—
Payables to brokers, dealers and clearing organizations		291		291		—		291		—
Interest payable		193		193		—		193		—
Total financial liabilities, not measured at fair value	$	102,637	$	102,637	$	—	$	102,637	$	—

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.



	June 30, 2023
	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	$	27,190	¹	$	—		$	27,190	$	(27,190)	$	—
Securities borrowed		5,999			—			5,999		(5,876)		123
Securities purchased under agreements to resell		6,431			—			6,431		(6,431)		—
Financial instruments owned, at fair value
Options		20			—			20		(17)		3
Currency forward contracts		2			—			2		—		2
Total	$	39,642		$	—		$	39,642	$	(39,514)	$	128


	(in millions)
Offsetting of financial liabilities
Securities loaned	$	10,261	$	—	$	10,261	$	(9,604)	$	657
Financial instruments sold, but not yet purchased, at fair value
Options		22		—		22		(17)		5
Currency forward contracts		9		—		9		—		9
Total	$	10,292	$	—	$	10,292	$	(9,621)	$	671

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	December 31, 2022
		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	$	27,058	¹	$	—		$	27,058	$	(27,058)	$	—
Securities borrowed		4,749			—			4,749		(4,597)		152
Securities purchased under agreements to resell		6,029			—			6,029		(6,029)		—
Financial instruments owned, at fair value
Options		31			—			31		(16)		15
Currency forward contracts		30			—			30		—		30
Total	$	37,897		$	—		$	37,897	$	(37,700)	$	197


	(in millions)
Offsetting of financial liabilities
Securities loaned	$	8,940	$	—	$	8,940	$	(8,260)	$	680
Financial instruments sold, but not yet purchased, at fair value
Options		16		—		16		(16)		—
Currency forward contracts		2		—		2		—		2
Total	$	8,958	$	—	$	8,958	$	(8,276)	$	682

______________________________

(1)As of June 30, 2023 and December 31, 2022, the Company had $27.2 billion and $27.1 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.
‎

(2)The Company did not have any balances eligible for netting in accordance with ASC Topic 210-20 at June 30, 2023 and December 31, 2022.

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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.



	June 30, 2023
	Remaining Contractual Maturity
	Overnight		Less than		30 – 90		Over 90
	and Open		30 days		days		days		Total

	(in millions)

Securities loaned
Stocks	$	10,194	$	—	$	—	$	—	$	10,194
Corporate bonds		66		—		—		—		66
Foreign government securities		1		—		—		—		1
Total securities loaned	$	10,261	$	—	$	—	$	—	$	10,261


	December 31, 2022
	Remaining Contractual Maturity
	Overnight		Less than		30 – 90		Over 90
	and Open		30 days		days		days		Total

	(in millions)

Securities loaned
Stocks	$	8,837	$	—	$	—	$	—	$	8,837
Corporate bonds		101		—		—		—		101
Foreign government securities		2		—		—		—		2
Total securities loaned	$	8,940	$	—	$	—	$	—	$	8,940

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- 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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