Collateralized Transactions

9 Months Ended

Aug. 31, 2020

Collateralized Transactions [Abstract]

Our repurchase agreements and securities borrowing and lending arrangements are generally recorded at cost in our Consolidated Statements of Financial Condition, which is a reasonable approximation of their fair values due to their short-term nature. We enter into secured borrowing and lending arrangements to obtain collateral necessary to effect settlement, finance inventory positions, meet customer needs or re-lend as part of our dealer operations. We monitor the fair value of the securities loaned and borrowed on a daily basis as compared with the related payable or receivable, and request additional collateral or return excess collateral, as appropriate. We pledge financial instruments as collateral under repurchase agreements, securities lending agreements and other secured arrangements, including clearing arrangements. Our agreements with counterparties generally contain contractual provisions allowing the counterparty the right to sell or repledge the collateral. Pledged securities owned that can be sold or repledged by the counterparty are included in Financial instruments owned, at fair value, and noted parenthetically as Securities pledged in our Consolidated Statements of Financial Condition.

In instances where we receive securities as collateral in connection with securities-for-securities transactions in which we are the lender of securities and are permitted to sell or repledge the securities received as collateral, we report the fair value of the collateral received and the related obligation to return the collateral in our Consolidated Statements of Financial Condition.

The following tables set forth the carrying value of securities lending arrangements, repurchase agreements and obligation to return securities received as collateral, at fair value, by class of collateral pledged (in thousands):



	August 31, 2020
	Securities Lending Arrangements		Repurchase Agreements		Obligation To Return Securities Received As Collateral, at fair value		Total
Collateral Pledged:
Corporate equity securities	$	1,317,023	$	176,221	$	4,413	$	1,497,657
Corporate debt securities	605,527		1,661,854		—		2,267,381
Mortgage-backed and asset-backed securities	—		1,680,052		—		1,680,052
U.S. government and federal agency securities	7,187		12,187,529		—		12,194,716
Municipal securities	—		180,837		—		180,837
Sovereign obligations	—		2,636,878		—		2,636,878
Loans and other receivables	—		1,313,667		—		1,313,667
Total	$	1,929,737	$	19,837,038	$	4,413	$	21,771,188



	November 30, 2019
	Securities Lending Arrangements		Repurchase Agreements		Obligation To Return Securities Received As Collateral, at fair value		Total
Collateral Pledged:
Corporate equity securities	$	1,314,395	$	129,558	$	—	$	1,443,953
Corporate debt securities	191,311		1,730,526		—		1,921,837
Mortgage-backed and asset-backed securities	—		1,745,145		—		1,745,145
U.S. government and federal agency securities	19,434		10,863,997		9,500		10,892,931
Municipal securities	—		498,202		—		498,202
Sovereign obligations	—		3,016,563		—		3,016,563
Loans and other receivables	—		772,926		—		772,926
Total	$	1,525,140	$	18,756,917	$	9,500	$	20,291,557



	August 31, 2020
	Overnight and Continuous		Up to 30 Days		31-90 Days		Greater than 90 Days		Total
Securities lending arrangements	$	630,163	$	—	$	553,062	$	746,512	$	1,929,737
Repurchase agreements	10,606,433		1,695,229		4,243,474		3,291,902		19,837,038
Obligation to return securities received as collateral, at fair value	4,413		—		—		—		4,413
Total	$	11,241,009	$	1,695,229	$	4,796,536	$	4,038,414	$	21,771,188



	November 30, 2019
	Overnight and Continuous		Up to 30 Days		31-90 Days		Greater than 90 Days		Total
Securities lending arrangements	$	694,821	$	—	$	672,969	$	157,350	$	1,525,140
Repurchase agreements	6,614,026		1,556,260		8,988,528		1,598,103		18,756,917
Obligation to return securities received as collateral, at fair value	—		—		9,500		—		9,500
Total	$	7,308,847	$	1,556,260	$	9,670,997	$	1,755,453	$	20,291,557

We receive securities as collateral under resale agreements, securities borrowing transactions and customer margin loans. We also receive securities as collateral in connection with securities-for-securities transactions in which we are the lender of securities. In many instances, we are permitted by contract to rehypothecate the securities received as collateral. These securities may be used to secure repurchase agreements, enter into securities lending transactions, satisfy margin requirements on derivative transactions or cover short positions. At August 31, 2020 and November 30, 2019, the approximate fair value of securities received as collateral by us that may be sold or repledged was $29.9 billion and $28.7 billion, respectively. At August 31, 2020 and November 30, 2019, a substantial portion of the securities received by us had been sold or repledged.

Offsetting of Securities Financing Agreements

To manage our exposure to credit risk associated with securities financing transactions, we may enter into master netting agreements and collateral arrangements with counterparties. Generally, transactions are executed under standard industry agreements, including, but not limited to, master securities lending agreements (securities lending transactions) and master repurchase agreements (repurchase transactions). See Note 2, Summary of Significant Accounting Policies, in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended November 30, 2019 for additional information regarding the offsetting of securities financing agreements.

The following tables provide information regarding repurchase agreements, securities borrowing and lending arrangements and securities received as collateral, at fair value, and obligation to return securities received as collateral, at fair value, that are recognized in our Consolidated Statements of Financial Condition and 1) the extent to which, under enforceable master netting arrangements, such balances are presented net in our Consolidated Statements of Financial Condition as appropriate under U.S. GAAP and 2) the extent to which other rights of setoff associated with these arrangements exist and could have an effect on our financial position (in thousands).



	August 31, 2020
	Gross Amounts		Netting in Consolidated Statement of Financial Condition			Net Amounts in Consolidated Statement of Financial Condition		Additional Amounts Available for Setoff (1)			Available Collateral (2)			Net Amount (3)
Assets:
Securities borrowing arrangements	$	7,268,413	$	—		$	7,268,413	$	(429,615	)	$	(1,691,674	)	$	5,147,124
Reverse repurchase agreements	17,905,457		(12,578,066		)	5,327,391		(144,353		)	(5,141,297		)	41,741
Securities received as collateral, at fair value	4,413		—			4,413		—			—			4,413
Liabilities:
Securities lending arrangements	$	1,929,737	$	—		$	1,929,737	$	(429,615	)	$	(1,467,230	)	$	32,892
Repurchase agreements	19,837,038		(12,578,066		)	7,258,972		(144,353		)	(6,622,623		)	491,996
Obligation to return securities received as collateral, at fair value	4,413		—			4,413		—			—			4,413



	November 30, 2019
	Gross Amounts		Netting in Consolidated Statement of Financial Condition			Net Amounts in Consolidated Statement of Financial Condition		Additional Amounts Available for Setoff (1)			Available Collateral (2)			Net Amount (4)
Assets:
Securities borrowing arrangements	$	7,624,642	$	—		$	7,624,642	$	(361,394	)	$	(1,479,433	)	$	5,783,815
Reverse repurchase agreements	15,551,845		(11,252,247		)	4,299,598		(291,316		)	(3,929,977		)	78,305
Securities received as collateral, at fair value	9,500		—			9,500		—			—			9,500
Liabilities:
Securities lending arrangements	$	1,525,140	$	—		$	1,525,140	$	(361,394	)	$	(970,799	)	$	192,947
Repurchase agreements	18,756,917		(11,252,247		)	7,504,670		(291,316		)	(6,663,807		)	549,547
Obligation to return securities received as collateral, at fair value	9,500		—			9,500		—			—			9,500

(1)

Under master netting agreements with our counterparties, we have the legal right of offset with a counterparty, which incorporates all of the counterparty’s outstanding rights and obligations under the arrangement. These balances reflect additional credit risk mitigation that is available by a counterparty in the event of a counterparty’s default, but which are not netted in the balance sheet because other netting provisions of U.S. GAAP are not met.


(2)	Includes securities received or paid under collateral arrangements with counterparties that could be liquidated in the event of a counterparty default and thus offset against a counterparty’s rights and obligations under the respective repurchase agreements or securities borrowing or lending arrangements.


(3)	Amounts include $5,089.0 million of securities borrowing arrangements, for which we have received securities collateral of $4,921.2 million, and $439.7 million of repurchase agreements, for which we have pledged securities collateral of $451.6 million, which are subject to master netting agreements, but we have not determined the agreements to be legally enforceable.


(4)	Amounts include $5,683.4 million of securities borrowing arrangements, for which we have received securities collateral of $5,523.6 million, and $439.7 million of repurchase agreements, for which we have pledged securities collateral of $447.5 million, which are subject to master netting agreements, but we have not determined the agreements to be legally enforceable.

Cash and Securities Segregated and on Deposit for Regulatory Purposes or Deposited with Clearing and Depository Organizations

Cash and securities deposited with clearing and depository organizations and segregated in accordance with regulatory regulations totaled $986.1 million and $796.8 million at August 31, 2020 and November 30, 2019, respectively. Segregated cash and securities consist of deposits in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, which subjects Jefferies LLC as a broker-dealer carrying customer accounts to requirements related to maintaining cash or qualified securities in segregated special reserve bank accounts for the exclusive benefit of its customers.