Revenue Recognition

9 Months Ended

Sep. 30, 2023

Revenue Recognition [Abstract]

Revenue Recognition

17. Revenue Recognition

Refer to Note 2 – Summary of Significant Accounting Policies in Company’s 2022 Form 10-K for detail on the Company’s primary sources of revenue and the corresponding accounting treatment. Information related to items that impact certain revenue streams within the periods presented is shown below.

Principal Transactions and Proprietary Trading

In 2022, the Company invested in treasury bill and treasury notes, which are primarily in the line item “Cash and securities segregated for regulatory purposes” on the statements of financial condition, in order to enhance its yield on its excess 15c3-3 deposits. During 2022, there was an increase in U.S. government securities yields, which created an unrealized loss on the Company’s U.S. government securities portfolio. The Company continuously invests in treasury bills and treasury notes as part of its normal operations to meet deposit requirements. The aggregate unrealized loss on the portfolio of approximately $1.3 million as of September 30, 2023 will be returned over the duration of the government securities, at a point no later than the maturity of the securities. Refer to Note 8 – Fair Value Measurements for additional detail.

The following table represents detail related to principal transactions and proprietary trading.

	Three Months Ended September 30,
	2023		2022			Increase (Decrease)
Principal transactions and proprietary trading
Realized and unrealized gain on primarily riskless principal transactions	$	2,657,000	$	2,340,000		$	317,000
Unrealized gain (loss) on portfolio of U.S. government securities		1,096,000		(1,387,000	)		2,483,000
Total Principal transactions and proprietary trading	$	3,753,000	$	953,000		$	2,800,000

		Nine Months Ended September 30,
		2023		2022			Increase (Decrease)
Principal transactions and proprietary trading
Realized and unrealized gain on primarily riskless principal transactions	$	6,642,000	$	5,956,000		$	686,000
Unrealized gain (loss) on portfolio of U.S. government securities		2,565,000		(4,189,000	)		6,754,000
Total Principal transactions and proprietary trading	$	9,207,000	$	1,767,000		$	7,440,000

Stock Borrow / Stock Loan

For the three and nine months ended September 30, 2023, stock borrow / stock loan revenue was $4,008,000 ($13,000,000 gross revenue less $8,992,000 expenses) and $11,963,000 ($34,300,000 gross revenue less $22,337,000 expenses), respectively. For the three and nine months ended September 30, 2022, stock borrow / stock loan revenue was $4,183,000 ($9,921,000 gross revenue minus $5,738,000 expenses) and $11,909,000 ($26,222,000 gross revenue less $14,313,000 expenses), respectively.