Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2019

Financial Instruments With Off-balance-sheet Risk And Concentrations Of Credit Risk

Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk

16. Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk

Customer transactions are cleared through a variety of clearing broker dealers on a fully disclosed basis, one of which is an affiliate. In the event that customers are unable to fulfill their contractual obligations, the clearing broker dealer may charge the Company for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy customers' obligations. The Company regularly monitors the activity in its customer accounts for compliance with its margin requirements. Securities transactions entered into as of December 31, 2019 have settled subsequent thereto with no material adverse effect on the Company's consolidated financial statements.

Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. The Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations.  There were no material losses for unsettled customer transactions for the years ended December 31, 2019 and 2018 and the Company does not have a history of losses from receivables from clearing broker dealers and does not anticipate losses in the future.