Fair Value Measurements

The fair value of the Company’s financial assets and liabilities is determined in accordance with the fair value hierarchy. The fair value of the Company’s Level 1 financial assets consist mainly of investments in equity and fixed-income mutual funds that are quoted daily. Level 2 financial assets consist of Government National Mortgage Association (GNMA) mortgage-backed pass-through certificates, Federal Home Loan Bank (FHLB) and other U.S. government agency short-term notes and investment grade commercial paper. The Company's Level 2 financial assets, with the exception of the GNMA securities, were purchased as part of a cash management program requiring only short term, top-tier investment grade government and corporate securities. The GNMA mortgage-backed pass-through certificates were purchased for the sole purpose of satisfying specific regulatory requirements imposed on our wholly-owned limited purpose federal thrift subsidiary, SEI Private Trust Company (SPTC). As a result, the Company's Level 2 financial assets are limited to only these types of fixed income securities. The valuation of the Company's Level 2 financial assets are based upon securities pricing policies and procedures utilized by third-party pricing vendors. The pricing policies and procedures applied during the nine months ended September 30, 2013 were consistent with those as described in our Annual Report on Form 10-K at December 31, 2012. The Company's Level 3 financial assets at December 31, 2012 consisted of an investment product that was in the process of liquidation and was closed to new investors. The Company had no Level 3 financial assets at September 30, 2013 and had no Level 3 financial liabilities at September 30, 2013 or December 31, 2012. There were no transfers of financial assets between levels within the fair value hierarchy during the nine months ended September 30, 2013.

The fair value of certain financial assets and liabilities of the Company was determined using the following inputs:



	At September 30, 2013
	Fair Value Measurements at Reporting Date Using
Assets	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity available-for-sale securities	$	10,644	$	10,644	$	—	$	—
Fixed income available-for-sale securities	75,542		—		75,542		—
Fixed income securities owned	20,728		—		20,728		—
Trading securities	4,841		4,841		—		—
	$	111,755	$	15,485	$	96,270	$	—



	At December 31, 2012
	Fair Value Measurements at Reporting Date Using
Assets	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity available-for-sale securities	$	15,926	$	15,926	$	—	$	—
Fixed income available-for-sale securities	59,943		—		59,943		—
Fixed income securities owned	20,088		—		20,088		—
Trading securities	5,909		4,706		—		1,203
	$	101,866	$	20,632	$	80,031	$	1,203

The table below presents a reconciliation for all assets and liabilities of the Company measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from January 1, 2013 to September 30, 2013:



	Trading Securities
Balance, January 1, 2013	$	1,203
Purchases	—
Issuances	—
Principal prepayments and settlements	(1,167		)
Sales	—
Total gains or (losses) (realized/unrealized):
Included in earnings	(36		)
Included in other comprehensive income	—
Transfers in and out of Level 3	—
Balance, September 30, 2013	$	—



	Trading Securities
Balance, January 1, 2012	$	52,623
Purchases	—
Issuances	—
Principal prepayments and settlements	(9,833		)
Sales	—
Total gains or (losses) (realized/unrealized):
Included in earnings	7,303
Included in other comprehensive income	—
Transfers in and out of Level 3	—
Balance, September 30, 2012	$	50,093