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Item 1A. Risk Factors

2024-02-29 compared with 2023-03-01 · 384 added, 544 removed, 552 unchanged (63% of the section changed)

Any investment in shares of our Class A common stock, our 5.375% Senior Notes, our 3.750% Senior Notes, our 4.375% Senior Notes or our or those of BGC Group, Inc.

other securities involves risks and uncertainties.

Any investment in shares of our Class A common stock, the BGC Group Notes, the BGC Partners Notes, or our other securities or those of BGC Partners involves risks and uncertainties.

The following are important risks and uncertainties that could affect our business, but we do not ascribe any particular likelihood or probability to them unless specifically indicated.

Any of the risks and uncertainties set forth below, should they occur, could significantly and negatively affect our business, financial condition, results of operations, and prospects and/or the trading price of our Class A common stock, our 5.375% Senior Notes, our 3.750% Senior Notes, our 4.375% Senior Notes or our other securities or those of BGC Group, Inc.

RISKS RELATED TO OUR BUSINESS GENERALLY

Before making an investment decision to purchase our securities or those of BGC Partners, you should carefully read and consider all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including “Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included herein.

The occurrence of any of the following risks or additional risks and uncertainties that are currently immaterial or unknown could materially and adversely affect our business, financial condition, liquidity, result of operations, cash flows or prospects.

RISKS RELATED TO OUR BUSINESS

Risks Related to Global Economic and Market Conditions

Our business, financial condition, results of operations and prospects have been and may continue to be affected both positively and negatively by conditions in the global economy and financial markets generally.

Our business and results of operations have been and may continue to be affected both positively and negatively by conditions in the global economy and financial markets generally.

Difficult market and economic conditions and geopolitical uncertainties have in the past adversely affected and may in the future adversely affect our business.

Such conditions and uncertainties include financial pressures exacerbated by the COVID-19 pandemic, fluctuating levels of economic output, zero to near-zero interest rates and the impact on trading volumes, recently rising interest and inflation rates, employment levels, consumer confidence levels, and fiscal and monetary policy.

The economic policies of the current administration and Congress, potential further increases in interest rates and potential changes to existing tax rates and infrastructure spending plans may

further change the regulatory and economic landscape.

Uncertain market, economic, and geopolitical conditions have in the past adversely affected and may in the future adversely affect our business.

Such conditions and uncertainties include fluctuating levels of economic output, historic fluctuating interest rates and the impact on trading volumes, recently volatile interest and inflation rates, employment levels, consumer confidence levels, and fiscal and monetary policy.

The economic policies of the current and next administration and Congress, including potential changes in interest rates and existing tax rates as well as potential changes in these factors as a result of the upcoming U.S.

Presidential election may further change the regulatory and economic landscape.

These conditions may directly and indirectly impact a number of factors in the global markets that may have a positive or negative effect on our operating results, including the levels of trading, investing, and origination activity in the financial markets, the valuations of financial instruments, changes in interest rates, changes in benchmarks, changes in and uncertainty regarding laws and regulations, substantial fluctuations in volume and commissions on securities and derivatives transactions, the absolute and relative level of currency rates and the actual and the perceived quality of issuers, borrowers and investors.

For example, the actions of the U.S.

Federal Reserve and international central banking authorities directly impact our cost of funds and may impact the value of financial instruments we hold.

For example, the

actions of the U.S.

Federal Reserve and international central banking authorities directly impact our cost of capital and may impact the value of financial instruments we hold.

In addition, changes in monetary policy may affect the credit quality of our customers.

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The global financial services markets are, by their nature, risky and volatile and are directly affected by many national and international factors that are beyond our control.

Although we believe that rising interest rates in recent periods will positively impact trading volumes in many of our product offerings, any one of the following factors have caused and may in the future cause substantial changes in the U.S.

Although we believe that meaningful interest rates may continue to positively impact trading volumes in many of our product offerings, any one of the following factors have caused and may in the future cause substantial changes in the U.S.

and global financial markets, resulting in positive or negative impacts on transactional volume and profitability for our business.

These factors include:

• rising global interest rates;

• pandemics and other international health emergencies, including the combined impact of COVID-19 with the flu and other seasonal illnesses;

• volatile global interest rates;

• economic and geopolitical conditions and uncertainties in the United States, Europe, Asia and elsewhere in the world, including government deficits, debt and possible defaults, austerity measures, and changes in central bank and/or fiscal policies, including the level and timing of government debt issuances, purchases and outstanding amounts;

• possible political turmoil with respect to the U.S.

government, the U.K, the EU and/or its member states, Hong Kong, China, or other major economies around the world;

government, the U.K., the EU and/or its member states, Hong Kong, China, Latin America or other major economies around the world;

• the effect of Federal Reserve Board and other central banks’ monetary policies, increased capital requirements for banks and other financial institutions, and other regulatory requirements;

• terrorism, war and other armed hostilities, such as Russia's invasion of Ukraine and the impact of it and measures taken in response thereto, including sanctions imposed by governments and related counter-sanctions;

• terrorism, war and other armed hostilities, such as the wars in Ukraine and Israel and other ongoing conflicts and hostilities in the Middle East, and measures taken in response thereto, including sanctions imposed by governments and related countersanctions;

• the impact of short-term or prolonged U.S.

government shutdowns, elections or other political events;

• inflation, wavering institutional and consumer confidence levels;

• inflation and wavering institutional and consumer confidence levels in the economy;

• pandemics and other international health emergencies, including the combined impact of COVID-19 with the flu and other seasonal illnesses;

• the availability of capital for borrowings and investments by our clients and their customers;

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• the level and volatility of the difference between the yields on corporate securities and those on related benchmark securities;

• margin requirements, capital requirements, credit availability, and other liquidity concerns.

• margin requirements, capital requirements, credit availability, global supply chain issues and other liquidity concerns.

Low transaction volumes for any of our brokerage asset classes generally result in reduced revenues.

Under these conditions, our profitability is adversely affected since many of our costs are fixed.

Under these conditions, our profitability is adversely affected.

In addition, although less common, some of our transaction revenues are determined on the basis of the value of transactions or on spreads.

For these reasons, substantial decreases in trading volume, declining prices, and/or reduced spreads could have material adverse effects on our business, financial condition, results of operations and prospects.

Any downgrades of the U.S.

Downgrades of sovereign credit ratings, sovereign debt crises, or a decrease in the integrity of capital markets may have material adverse effects on the financial markets and general economic conditions, as well as our businesses, financial condition, cash flows, results of operations and prospects.

Any further downgrades of the U.S.

sovereign credit rating by one or more of the major credit rating agencies could have material adverse effects on financial markets and economic conditions in the U.S.

and throughout the world.

This in turn could have a material adverse impact on our business, financial condition, results of operations, and prospects.

Because of the unprecedented nature of any negative credit rating actions with respect to U.S.

government obligations, the ultimate impacts on global financial markets and our business, financial condition, results of operations, and prospects are unpredictable and may not be immediately apparent.

Concerns about the sovereign debt of certain major economies have caused uncertainty and disruption for financial markets globally, and continued uncertainties loom over the outcome of various governments’ financial support programs and the possibility that EU member states or other major economies may experience similar financial

Any downgrades of the long-term sovereign credit rating of the U.S.

This in turn could have a material adverse impact on our business, financial condition, cash flows, results of operations, and prospects.

The ultimate impacts of negative credit rating actions with respect to U.S.

government obligations, the ultimate impacts on global financial markets and our business, financial condition, cash flows, results of operations, and prospects are unpredictable and may not be immediately apparent.

Additionally, the negative impact on economic conditions and global financial markets from further sovereign debt concerns with respect to the U.K., the EU and/or its member states, Japan, China or other major economies could further adversely affect our businesses, financial condition, cash flows, results of operations and prospects.

Concerns about the sovereign debt of certain major economies have caused uncertainty and disruption for financial markets

globally, and continued uncertainties loom over the outcome of various governments’ financial support programs and the possibility that EU member states or other major economies may experience similar financial troubles.

Any further downgrades of the long-term sovereign credit rating of the U.S.

or additional sovereign debt crises in major economies could cause disruption and volatility of financial markets globally and have material adverse effects on our business, financial condition, results of operations and prospects.

Actions taken by governments in response to rising inflation rates may have a material impact on our business.

Both domestic and international markets experienced significant inflationary pressures in fiscal year 2022 and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for at least the near-term.

Actions taken by governments in response to inflation rates may have a material impact on our business.

Both domestic and international markets have recently experienced significant inflationary pressures and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for at least the near-term.

In response, the Federal Reserve in the U.S.

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Additionally, these actions have affected FX volumes around the world, causing currency fluctuations and rapid changes in valuations that may make certain strategies less appealing for FX market participants.

While higher interest rates are expected to have a positive impact on our revenues, these currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, our expenses, and our cash flows.

Risks Related to the Geographic Locations of Our Business

Our business is geographically concentrated and could be significantly affected by any adverse change in the regions in which we operate.

Historically, our business operations have been substantially located in the U.S.

While we are expanding our business to new geographic areas, we are still highly concentrated in these areas.

Because we derived approximately 36.1% and approximately 30.2% of our total revenues on a consolidated basis for the year ended December 31, 2022 from our operations in the U.K.

and the U.S., respectively, our business is exposed to adverse regulatory and competitive changes, economic downturns and changes in political conditions in these countries.

If we are unable to identify and successfully manage or mitigate these risks, our business, financial condition, results of operations and prospects could be materially adversely affected.

exit from the EU could materially adversely impact our customers, counterparties, business, financial condition, results of operations and prospects.

On January 1, 2021, the U.K.

formally left the EU and U.K.-EU trade became subject to a new agreement that was concluded in December of 2020.

The exit from the EU is commonly referred to as Brexit.

Financial services fall outside of the scope of this trade agreement.

Instead, the relationship will largely be determined by a series of “equivalence decisions,” each of which would grant mutual market access for a limited subset of financial services where either party finds the other party has a regulatory regime that achieves similar outcomes to its own.

It is currently unknown if or when equivalence decisions will be taken.

In March 2021, the U.K.

and EU agreed a Memorandum of Understanding on Financial Services Regulatory Cooperation which creates a structure for dialogue but does not include commitments on equivalence.

In light of ongoing uncertainties, market participants are still adjusting.

The exact impact of Brexit on the U.K.-EU flow of financial services therefore remains unknown.

This same uncertainty applies to the consequences for the economies of the U.K.

and the EU member states as a result of the U.K.’s withdrawal from the EU.

We implemented plans to ensure continuity of service in Europe and continue to have regulated offices in place in many of the major European markets.

As part of our ongoing Brexit strategy, ownership of BGC Madrid, Copenhagen and Frankfurt & GFI Paris, Madrid and Dublin branches was transferred to Aurel BGC SAS (a French-based operation and therefore based in the EU) in July 2020.

We have been generally increasing our footprint in the EU which includes the establishment of a new branch office of Aurel BGC SAS in Milan and a new office in Monaco under a new local Monaco subsidiary.

Regardless of these and other mitigating measures, our European headquarters and largest operations are in London, and market access risks and uncertainties have had and could continue to have a material adverse effect on our customers, counterparties, business, financial condition, results of operations and prospects.

Furthermore, in the future the U.K.

and EU’s regulation may diverge, which could disrupt and increase the costs of our operations, and result in a loss of existing levels of cross-border market access.

Risks Related to the Impacts of the COVID-19 Pandemic

The effects of the COVID-19 pandemic continue to significantly disrupt and adversely affect the environment in which we and our customers and competitors operate, including the global economy, the U.S.

economy, the global financial markets, and our business, financial condition, results of operations and prospects.

The effects of the COVID-19 pandemic have significantly disrupted and adversely affected the environment in which we and our customers and competitors operate, including the global economy, the U.S.

economy, the global financial markets, and our business, financial condition, results of operations and prospects.

The effects of COVID-19 remain challenging to predict due to multiple uncertainties, including the transmissibility, severity, and duration of new virus variants and the potential extent of their spread, and the impact on our employees, operations, suppliers, vendors, and clients’ operations.

On January 30, 2023, the Biden Administration announced its plan to extend the “public health emergency” status of COVID-19 for a final time to May 11, 2023.

Once such status expires, government programs supporting public health safety measures may begin to be rolled back or be eliminated.

We will continue to evaluate the nature and extent of the impact of all of the foregoing on our business.

While higher interest rates have had and are expected to continue to have a positive impact on our revenues, currency fluctuations have affected, and may continue to affect, the reported value of our assets, liabilities, and cash flows.

Risks Related to New Opportunities/Possible Transactions and Hires

If we are unable to identify and successfully exploit new product, service and market opportunities, including through hiring new brokers, salespeople, managers, technology professionals and other front-office personnel, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.

Because of significant competition in our market, our strategy is to broker more transactions, increase our share of existing markets and seek out new clients and markets.

Because of significant competition in our market, our strategy is to broker more transactions, increase our share of existing markets and seek out new clients and markets through competitive or innovative new product offerings.

We may face enhanced risks as these efforts to expand our business result in our transacting with a broader array of clients and expose us to new products and services and markets.

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If we are unable to identify and successfully exploit new product, service and market opportunities, our business, financial condition, results of operations and prospects could be materially adversely affected.

We may pursue opportunities including strategic alliances, acquisitions, mergers, investments, dispositions, joint ventures or other growth opportunities or transformational transactions (including hiring new brokers and salespeople), which could present unforeseen integration obstacles or costs and could dilute our stockholders.

We may also face competition in our acquisition strategy, and such competition may limit such opportunities.

We have explored and continue to explore a wide range of strategic alliances, mergers, investments, acquisitions and joint ventures with other financial services companies that have interests in related businesses or other strategic opportunities.

We may pursue opportunities including new business initiatives, strategic alliances, acquisitions, mergers, investments, dispositions, joint ventures or other growth opportunities or transformational transactions (including hiring new brokers and salespeople), which could present unforeseen integration obstacles or costs and could dilute our stockholders.

We may also face competition in our acquisition strategy or new business plans, and such competition may limit such opportunities.

We have explored and continue to explore a wide range of strategic alliances, new business initiatives, mergers, investments, acquisitions and joint ventures with other financial services companies that have interests in related businesses or other strategic opportunities.

Such transactions may be necessary in order for us to enter into or develop new products or services or markets, as well as to strengthen our current ones.

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• potential disruption of our ongoing businesses and product, service and market development and distraction of management;

• difficulty retaining and integrating personnel and integrating administrative, operational, financial reporting, internal control, compliance, technology and other systems;

• the necessity of hiring additional managers and other critical professionals and integrating them into current operations;

• increasing the scope, geographic diversity and complexity of our operations;

• to the extent that we pursue these opportunities internationally, exposure to political, economic, legal, regulatory, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization and/or foreign ownership restrictions, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory and tax requirements, economic and/or political instability, geographic, time zone, language and cultural differences among personnel in different areas of the world, exchange controls and other restrictive government actions, as well as the outbreak of hostilities;

• the risks relating to integrating accounting and financial systems and accounting policies and the related risk of having to recast our historical financial statements;

• regulatory, financial, and operational risks associated with the launch of new initiatives which could impact the timeline, launch and operation of such initiatives, or which could require significant capital and significant efforts by management, including engaging partners on satisfactory terms and long lead times in order to scale a successful venture;

• the expansion of our cybersecurity processes to include new businesses, or the integration of the cybersecurity processes of acquired businesses, including internationally;

• increased focus on our Energy and Commodities business, including regulatory, financial, and operational risks associated with these initiatives;

• hiring, retaining and integrating personnel in the increasingly competitive marketplace for the most talented producers and managers;

• integrating administrative, operational, financial reporting, internal control, compliance, technology and other systems;

• increased scope, geographic diversity and complexity of our operations and, to the extent that we pursue opportunities internationally, exposure to political, economic, legal, regulatory, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization and/or foreign ownership restrictions, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory and tax requirements, economic and/or political instability, geographic, time zone, language and cultural differences among personnel in different areas of the world, exchange controls and other restrictive government actions, as well as the outbreak of hostilities;

• integrating accounting and financial systems and accounting policies and the related risk of having to restate our historical financial statements;

• potential dependence upon, and exposure to liability, loss or reputational damage relating to systems, controls and personnel that are not under our control;

• addition of business lines in which we have not previously engaged;

• potential unfavorable reaction to our strategy by our customers, counterparties, employees, and investors;

• the upfront costs associated with pursuing transactions and recruiting personnel, which efforts may be unsuccessful in the increasingly competitive marketplace for the most talented producers and managers;

• potential unfavorable reactions to our strategy by our customers, counterparties, employees, and investors, or challenges to our strategy by our competitors;

• the upfront costs of building technology and establishing infrastructure to establish new business ventures;

• conflicts or disagreements between any strategic alliance or joint venture partner and us;

• exposure to potential unknown liabilities of any acquired business, strategic alliance or joint venture that are significantly larger than we anticipate at the time of acquisition, and unforeseen increased expenses or delays associated with acquisitions, including costs in excess of the cash transition costs that we estimate at the outset of a transaction;

• reduction in availability of financing due to tightened credit markets or credit ratings downgrades or defaults by us, in connection with these opportunities;

• a significant increase in the level of our indebtedness in order to generate cash resources that may be required to effect acquisitions;

• dilution resulting from any issuances of shares of our Class A common stock in connection with these opportunities;

• reduction in availability of financing due to credit ratings downgrades or defaults by us, in connection with these activities;

• a significant increase in the level of our indebtedness and adverse effects on our Liquidity in order to generate cash resources that may be required to effect acquisitions;

• dilution resulting from any issuances of shares of our Class A common stock in connection with these activities;

• a reduction of the diversification of our business resulting from any dispositions;

• the necessity of replacing certain individuals and functions that are sold in dispositions;

• the cost of rebranding and the impact on our market awareness of dispositions;

• litigation or regulatory scrutiny with respect to any such transactions, including any related party aspects of any proposed arrangements;

• adverse effects on our liquidity as a result of payment of cash resources;

• the impact of any reduction in our asset base resulting from dispositions on our ability to obtain financing or the terms thereof;

• a lag in the realization of financial benefits from these transactions and arrangements.

We face competition for acquisition targets, which may limit our number of acquisitions and growth opportunities and may lead to higher acquisition prices or other less favorable terms.

We face competition for acquisition targets, which may limit our number of acquisition and growth opportunities and may lead to higher acquisition prices or other less favorable terms.

As we grow internationally, we may experience additional expenses or obstacles.

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In certain circumstances, one or more of these regulators may withhold their consent, impose restrictions or make their consent subject to conditions which may result in increased costs or delays.

Any future growth will be partially dependent upon the continued availability of suitable transactional candidates at favorable prices and upon advantageous terms and conditions, which may not be available to us, as well as sufficient liquidity to fund these transactions.

Future transactions and any necessary related financings also may involve significant transaction-related expenses, which include payment of break-up fees, assumption of liabilities, including compensation, severance, lease termination, and other restructuring costs, and transaction and deferred financing costs, among others.

Any future growth will be partially dependent upon the continued availability of suitable transactional candidates at favorable prices and valuations and upon advantageous terms and conditions, which may not be available to us, as well as sufficient liquidity to fund these transactions.

In addition, there can be no assurance that such transactions will be accretive or generate favorable operating margins.

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Such integration and additional growth may place a significant strain upon our management, administrative, operational, financial reporting, internal control and compliance infrastructure.

communication between our transactional and management functions and our finance and accounting functions, and manage the pressure on our management, administrative, operational, financial reporting, compliance and other control infrastructure.

Our ability to grow depends upon our ability to successfully hire, train, supervise and manage additional employees, expand our management, administrative, operational, financial reporting, compliance and other control systems effectively, allocate our human resources optimally, maintain clear lines of communication between our transactional and management functions and our finance and accounting functions, and manage the pressure on our management, administrative, operational, financial reporting, compliance and other control infrastructure.

Additionally, managing future growth may be difficult due to new geographic locations, markets and business lines.

We may not realize the full benefits that we anticipate from strategic alliances, acquisitions, joint ventures or other growth opportunities.

We may not realize, or it may take an extended period of time to realize, the full benefits that we anticipate from strategic alliances, acquisitions, joint ventures or other growth opportunities.

There can be no assurance that we will be able to accurately anticipate and respond to the changing demands we will face as we integrate recent future acquisitions and continue to expand our operations, and we may not be able to manage growth effectively or to achieve growth at all.

From time to time, we may also seek to dispose of portions of our businesses, or otherwise reduce our ownership, each of which could materially affect our cash flows and results of operations.

Dispositions involve significant risks and uncertainties, such as ability to sell such businesses at satisfactory prices and terms and in a timely manner (including long and costly sales processes and the possibility of lengthy and potentially unsuccessful attempts by a buyer to receive required regulatory approvals), or at all, disruption to other parts of the business and distraction of management, loss of key employees or customers, and exposure to unanticipated liabilities or ongoing obligations to support the business following such dispositions.

Dispositions involve significant risks and uncertainties, such as the ability to sell such businesses at satisfactory prices and terms and in a timely manner (including long and costly sales processes and the possibility of lengthy and potentially unsuccessful attempts by a buyer to receive required regulatory approvals,) or at all, disruption to other parts of the business and distraction of management, loss of key employees or customers, and exposure to unanticipated liabilities or ongoing obligations to support the business following such dispositions.

In addition, if such dispositions are not completed for any reason, the market price of our Class A common stock may reflect a market assumption that such transactions will occur, and a failure to complete such transactions could result in a decline in the market price of our Class A common stock.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations and prospects.

We have offerings linked to cryptocurrencies that could expose us to technology, regulatory and financial risks.

We have offerings linked to cryptocurrencies in certain jurisdictions, and may expand the types of these offerings, the associated types of cryptocurrencies and the jurisdictions in which these offerings are offered.

While we have limited offerings linked to cryptocurrencies, such offerings or any future expansion of such business could expose us to technology, regulatory and financial risks.

While we currently have limited offerings linked to cryptocurrencies in certain jurisdictions, we may expand the types of these offerings, the associated types of cryptocurrencies and the jurisdictions in which these offerings are offered.

Specifically, BGC provides its cryptocurrency offerings through Lucera by providing connectivity, hosting and trading platforms and through kACE 2 , its analytics, pricing and distribution software.

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There is a high degree of fraud, theft, cyberattacks and other forms of risk in the cryptocurrency space.

It is possible, for example, for electronic wallet keys to become lost or stolen, for blockchains to experience detrimental changes, such as forks, or for cryptocurrency exchanges and custodians to experience cybersecurity incidents.

In addition, cryptocurrency markets experienced significant price fluctuations in recent years, and may continue to experience periods of extreme volatility again in the future.

Recently, several entities in the digital asset industry have been, and may continue to be negatively affected, including to the point of insolvency.

If such events impact our cryptocurrency offerings, we may experience material adverse effect on our business, financial condition, results of operations and prospects in the future.

In addition, cryptocurrency markets experienced significant historical material price fluctuations in 2022, and may continue to experience periods of extreme volatility again in the future.

Several entities in the digital asset industry have been, and may continue to be, negatively affected, including to the point of insolvency further undermining confidence in cryptocurrencies.

These events are continuing to develop and it is not possible to predict at this time all of the risks that they may pose to the digital asset industry.

If markets for any cryptocurrencies linked to the offerings we provide continue to suffer severe fluctuations, our customers could experience significant losses and we could lose their business, which in turn could have a material adverse effect on our business, financial condition, results of operations and prospects in the future.

the SEC, CFTC, state and federal agencies are reviewing virtual currency businesses and have and or may enact regulations that restrict business activities and or require additional licenses to conduct certain businesses.

In addition, many foreign regulators and legislatures have taken action against virtual currency businesses or have enacted restrictive regulations.

These regulations may negatively impact our ability to offer different products in different regions and/or negatively impact our ability to deal with certain customers depending on where they are located.

While the SEC has recently approved the listing and trading of a number of spot bitcoin ETPs, existing and future regulations may negatively impact our ability to offer different products in different regions and/or negatively impact our ability to deal with certain customers depending on where they are located.

If licenses are required, it may take a considerable amount of time to obtain the necessary approvals from the respective regimes.

Any of these factors could have a material adverse effect on our business, financial condition, results of operations and prospects in the future.

Risks Related to Change in LIBOR

We may be adversely affected by the transition away from LIBOR and the use of SOFR or other alternative reference rates.

The withdrawal and replacement of LIBOR with alternative benchmarks introduces risks for our clients and the financial services industry.

Various financial instruments are linked to the LIBOR benchmark, and any failure by market participants and regulators to successfully introduce benchmark rates to replace LIBOR and implement effective transitional arrangements to address the discontinuation of LIBOR could negatively affect our clients and the global financial markets.

While we have taken steps to minimize the consequences of the transition from LIBOR on our business there can be no assurance that the withdrawal and replacement of LIBOR will not have a material adverse effect on our business, financial condition, results of operations and prospects in the future.

Risks Related to Liquidity, Funding and Indebtedness

We have debt, which could adversely affect our ability to raise additional capital to fund our operations and activities, limit our ability to react to changes in the economy or our business, expose us to interest rate risk, impact our ability to obtain or maintain favorable credit ratings and prevent us from meeting our obligations under our indebtedness.

We have debt, which could adversely affect our ability to raise additional capital and obtain or maintain favorable credit ratings, limit our ability to react to changes in the economy or our business, expose us to interest rate risk, and prevent us from meeting our obligations under our indebtedness.

Our indebtedness, which at December 31, 2023 was $1,183.5 million, may have important, adverse consequences to us and our investors, including:

• it may limit our ability to borrow money, dispose of assets or sell equity to fund our working capital, capital expenditures, dividend payments, debt service, strategic initiatives or other obligations or purposes;

• it may limit our flexibility in reacting to, changes in the economy, the markets, regulatory requirements, our operations or business;

• it may limit our flexibility in planning for, or reacting to, changes in the economy, the markets, regulatory requirements, our operations or business;

• our financial leverage may be higher than some of our competitors, which may place us at a competitive disadvantage;

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• it may increase the risk of a future downgrade of our credit ratings or otherwise impact our ability to obtain or maintain investment-grade credit ratings, which could increase future debt costs and limit the future availability of debt financing;

• we may not be able to borrow additional funds or refinance existing debt as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our Class A common stock and purchase limited partnership units;

• there would be a material adverse effect on our business, financial condition, results of operations and prospects if we were unable to service our indebtedness or obtain additional financing or refinance our existing debt on terms acceptable to us.

• there would be a material adverse effect on our business, financial condition, results of operations and prospects if we are unable to service our indebtedness or obtain additional financing or refinance our existing debt on terms acceptable to us.

To the extent that we incur additional indebtedness or seek to refinance our existing debt, the risks described above could increase.

In addition, our actual cash requirements in the future may be greater than expected and may impact the rate at which we make payments of obligations or occur additional obligations.

In addition, our actual cash requirements in the future may be greater than expected and may impact the rate at which we make payments of obligations or incur additional obligations.

Our cash flow from operations may not be sufficient to service our outstanding debt or to repay outstanding debt as it becomes due, and we may not be able to borrow money, dispose of assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.

Some of our borrowings have variable interest rates.

As a result, a change in market interest rates has and could have a material adverse effect on our interest expense.

In response, the Federal Reserve in the U.S.

and other central banks in various countries have raised, and may again raise, interest rates in response to concerns about inflation.

As a result, increases in market interest rates have had and may continue to have a material adverse effect on our interest expense.

A continued rise in interest rates could further increase our cost of funds, which could reduce our net income.

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Some of our borrowings will mature in the near future.

For example, our 5.375% Senior Notes are due July 24, 2023, and have an outstanding aggregate principal amount of $450.0 million, and our 3.750% Senior Notes are due October 1, 2024, and have an outstanding aggregate principal amount of $300.0 million, and our 4.375% Senior Notes are due December 15, 2025 and have an outstanding aggregate principal amount of $300 million.

The BGC Group 3.750% Senior Notes and BGC Partners 3.750% Senior Notes each mature on October 1, 2024, and collectively have an outstanding aggregate principal amount of $300.0 million;

the BGC Group 4.375% Senior Notes and BGC Partners 4.375% Senior Notes each mature on December 15, 2025, and collectively have an outstanding aggregate principal amount of $300.0 million;

and the BGC Group 8.000% Senior Notes and the BGC Partners 8.000% Senior Notes each mature on May 25, 2028, and collectively have an outstanding aggregate principal amount of $350.0 million.

Our ability to meet our payment and other obligations under our debt depends on our ability to generate and maintain significant cash flow in the near future or to access alternate sources of liquidity.

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We cannot assure you that our business will generate cash flow from operations, or that additional capital will be available to us, in an amount sufficient to enable us to meet our payment obligations under our borrowings and to fund other liquidity needs.

If we are not able to generate sufficient cash flow to service our debt obligations and our unable to refinance our obligations on terms or at interest rates acceptable to us at all, we may need sell assets, reduce or delay capital investments, or seek to raise additional capital.

If we are unable to implement one or more of

these alternatives, our cash flow may be significantly reduced, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

If we are not able to generate sufficient cash flow to service our debt obligations and our unable to refinance our obligations on terms or at interest rates acceptable to us at all, we may need to sell assets, reduce or delay capital investments, or seek to raise additional capital.

If we are unable to implement one or more of these alternatives, our cash flow may be significantly reduced, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are dependent upon availability of adequate funding and liquidity to meet our clearing margin requirements, among other financial needs.

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We have also relied on arrangements with Cantor to clear certain of our transactions under the clearing agreement we entered into with Cantor in November 2008, which was amended in June 2020.

Although we have historically been able to raise debt on acceptable terms, deterioration of the world’s credit markets could make it more difficult for us to refinance or replace such indebtedness in a timely manner or on acceptable terms.

Although we have historically been able to raise debt on acceptable terms, deterioration of the world’s credit markets could make it more difficult for us to

refinance or replace such indebtedness in a timely manner or on acceptable terms.

Further, if for any reason we need to raise additional funds, including in order to meet regulatory capital requirements and/or clearing margin requirements arising from growth in our brokerage business, to complete acquisitions or otherwise, we may not be able to obtain additional financing when needed.

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• pay additional dividends on or make additional distributions in respect of our capital stock or make restricted payments;

• repurchase shares of our Class A common stock or purchase limited partnership units;

• repurchase shares of our Class A common stock;

• enter into certain transactions with our affiliates;

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Although we believe that our operating results will be more than sufficient to meet all of these obligations, including potential future indebtedness, no assurance can be given that our operating results will be sufficient to service our indebtedness or to fund all of our other expenditures or to obtain additional or replacement financing on a timely basis and on reasonable terms in order to meet these requirements when due.

Risks Related to Our Senior Notes

Credit ratings downgrades or defaults by us could adversely affect us.

Credit ratings downgrades could adversely affect our cost of capital and the availability of debt financing.

Our credit ratings and associated outlooks are critical to our reputation and operational and financial success.

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operating environment, regulatory environment, earnings and profitability trends, the rating agencies’ view of our funding and liquidity management practices, balance sheet size/composition and resulting leverage, cash flow coverage of interest, composition and size of the capital base, available liquidity, outstanding borrowing levels, our competitive position in the industry, our relationships in the industry, our relationship with Cantor, acquisitions or dispositions of assets and other matters.

A credit rating and/or the associated outlook can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances of that

company or related companies warrant such a change.

A credit rating and/or the associated outlook can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances of that company or related companies warrant such a change.

Any adverse ratings change or a downgrade in the credit ratings of BGC, Cantor or any of their other affiliates, and/or the associated ratings outlooks could adversely affect the availability of debt financing to us on acceptable terms, as well as the cost and other terms upon which we may obtain any such financing.

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A company’s contractual counterparties may, in certain circumstances, demand collateral in the event of a credit ratings or outlook downgrade of that company.

Further, interest rates payable on our debt, including with respect to our 5.375% Senior Notes, 3.750% Senior Notes and 4.375% Senior Notes, may increase in the event that our ratings decline.

As of December 31, 2022, BGC Partners’ public long-term credit ratings were BBB- from Fitch Ratings Inc.

Further, interest rates payable on our future or our and BGC Partners’ currently outstanding debt may increase in the event that our ratings decline;

for example, under the terms of our and BGC Partners’ outstanding senior notes, a downgrade in our credit ratings by both Fitch Ratings Inc.

and Standard & Poor’s would lead to an increase in the interest rates payable on those notes.

As of December 31, 2023, BGC Group’s public long-term credit ratings were BBB- from Fitch Ratings Inc.

and S&P Global Ratings, BBB from Kroll Bond Rating Agency and BBB+ from Japan Credit Rating Agency, Ltd.

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No assurance can be given that the credit ratings will remain unchanged in the future.

Any additional indebtedness that we incur, as well as any negative change to our credit ratings and associated outlooks, may restrict our ability to raise additional capital or refinance debt on favorable terms, and consequently.

any resulting impacts on our funding access, liquidity or creditworthiness perception among our clients, counterparties, lenders, investors, or other market participants, could have a material adverse effect on our business, financial condition, results of operations and prospects.

Any negative change to our credit ratings and associated outlooks may restrict our ability to raise additional capital or refinance debt on favorable terms, and any resulting impacts on our funding access, liquidity or perceived creditworthiness among our clients, counterparties, lenders, investors, or other market participants could have a material adverse effect on our business, financial condition, results of operations and prospects.

See “—Credit Risk— Credit ratings downgrades or defaults by us, Cantor or another large financial institution could adversely affect us or financial markets generally.”

Our acquisitions may require significant cash resources and may lead to a significant increase in the level of our indebtedness.

Potential future acquisitions may lead to a significant increase in the level of our indebtedness.

We may enter into short- or long-term financing arrangements in connection with acquisitions which may occur from time to time.

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We may incur substantial additional debt in the future, some of which may be secured debt.

We are not restricted under the terms of our existing debt arrangements and instruments, including the indentures governing our 5.375% Senior Notes, 3.750% Senior Notes and 4.375% Senior Notes, from incurring additional debt, securing existing or future debt (with certain exceptions, including to the extent already secured), recapitalizing our debt or taking a number of other actions that are not limited by the terms of our debt instruments that could have the effect of exacerbating the risks described herein.

We may not have the funds necessary to repurchase our 5.375% Senior Notes, 3.750% Senior Notes or 4.375% Senior Notes upon a change of control triggering event as required by the indentures governing these notes.

Upon the occurrence of a “change of control triggering event” (as defined in the indentures governing the 5.375% Senior Notes , the 3.750% Senior Notes and the 4.375% Senior Notes), unless we have exercised our right to redeem such notes, holders of the notes will have the right to require us to repurchase all or any part of their notes at a price in cash equal to 101% of the then-outstanding aggregate principal amount of the notes repurchased plus accrued and unpaid interest, if any.

There can be no assurance that we would have sufficient, readily available financial resources, or would be able to arrange financing, to repurchase the 5.375% Senior Notes, the 3.750% Senior Notes or the 4.375% Senior Notes upon a “change of control triggering event.” A failure by us to repurchase the notes when required would result in an event of default with respect to the notes.

We are not restricted under the terms of our existing debt arrangements and instruments, including the indentures governing the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the indentures governing the BGC Partners senior notes, from incurring additional debt, securing existing or future debt (with certain exceptions, including to the extent already secured), recapitalizing our debt or taking a number of other actions that are not limited by the terms of our debt instruments that could have the effect of exacerbating the risks described herein.

Risks Related to Our Senior Notes

We may not have the funds necessary to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a change of control triggering event as required by the indentures governing these notes.

Upon the occurrence of a “change of control triggering event” (as defined in the indentures governing the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, and the indentures governing the BGC Partners senior notes), unless we have exercised our right to redeem such notes, holders of the notes will have the right to require us to repurchase all or any part of their notes at a price in cash equal to 101% of the then-outstanding aggregate principal amount of the notes repurchased plus accrued and unpaid interest, if any.

There can be no assurance that we would have sufficient, readily available financial resources, or would be able to arrange financing, to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event.” A failure by us to repurchase the notes when required would result in an event of default with respect to the notes.

In addition, such failure may also constitute an event of default and result in the effective acceleration of the maturity of our other then-existing indebtedness.

The requirement to offer to repurchase the 5.375% Senior Notes, the 3.750% Senior Notes and the 4.375% Senior Notes upon a “change of control triggering event” may delay or prevent an otherwise beneficial takeover attempt of us.

The requirement to offer to repurchase the 5.375% Senior Notes, the 3.750% Senior Notes and the 4.375% Senior Notes upon a “change of control triggering event” may in certain circumstances delay or prevent a takeover of us and/or the removal of incumbent management that might otherwise be beneficial to investors in our Class A common stock.

The requirement to offer to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may delay or prevent an otherwise beneficial takeover attempt of us.

The requirement to offer to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may in certain circumstances delay or prevent a takeover of us and/or the removal of incumbent management that might otherwise be beneficial to investors in our Class A common stock.

Risks Related to the Geographic Locations of Our Business

Our business is geographically concentrated and could be significantly affected by any adverse change in the regions in which we operate.

Historically, our business operations have been substantially located in the U.S.

While we are expanding our business to new geographic areas, we are still highly concentrated in these areas.

Because we derived approximately 35.8% and approximately 32.0% of our total revenues on a consolidated basis for the year ended December 31, 2023 from our operations in the U.K.

and the U.S., respectively, our business is exposed to adverse regulatory and competitive changes, economic downturns and changes in political conditions in these countries.

If we are unable to identify and successfully manage

or mitigate these risks, our business, financial condition, results of operations and prospects could be materially adversely affected.

exit from the EU could materially adversely impact our customers, counterparties, business, financial condition, results of operations and prospects.

On January 1, 2021, the U.K.

formally left the EU and U.K.-EU trade became subject to a new agreement that was concluded in December of 2020.

The exit from the EU is commonly referred to as Brexit.

Financial services fall outside of the scope of this trade agreement.

It is currently unknown if or when equivalence decisions will be taken.

In March 2021, the U.K.

and EU agreed a Memorandum of Understanding on Financial Services Regulatory Cooperation which creates a structure for dialogue but does not include commitments on equivalence.

We implemented plans to ensure continuity of service in Europe and continue to have regulated offices in place in many of the major European markets.

Furthermore, in the future the U.K.

and EU’s regulation may diverge, which could disrupt and increase the costs of our operations, and result in a loss of existing levels of cross-border market access.

Risks Related to Our Intellectual Property

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Accordingly, we may face claims of infringement or other violations of intellectual property rights that could interfere with our ability to use intellectual property or technology that is material to our business.

In addition, restrictions on the distribution of some of the market data generated by our brokerage desks could limit the comprehensiveness and quality of the data we are able to distribute or sell.

In addition, restrictions on the distribution of some of the market data generated by our brokerage desks could limit the comprehensiveness and quality of the

data we are able to distribute or sell.

The number of such third-party claims may grow.

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There can be no assurance that we will have an ongoing license to use all intellectual property which our systems require, the failure of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks Related to Our IT Systems and Cyber-Security

Risks Related to Our IT Systems and Cybersecurity

Defects or disruptions in our technology or services could diminish demand for our products and services and subject us to liability.

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In addition, our customers may use our technology, products and services in unanticipated ways that may cause a disruption for other customers.

As we acquire companies, we may encounter difficulty in incorporating the acquired technologies, products and services, and maintaining the quality standards that are consistent with our technology, products and services.

Since our customers use our technology, products and services for important aspects of their business and for financial transactions, any errors, defects, or disruptions in such technology, products and services or other performance problems with our technology, products and services could subject our customers to financial loss and hurt our reputation.

Malicious cyber-attacks and other adverse events affecting our operational systems or infrastructure, or those of third parties, could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses or regulatory penalties.

As we acquire companies, we may encounter difficulty in integrating the acquired technologies, products and services, and maintaining the quality standards that are consistent with our technology, products and services.

Malicious cyber-attacks and other adverse events could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses or regulatory penalties.

Our businesses require us to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex, across numerous and diverse markets in many currencies.

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In addition, our operations rely on the secure processing, storage and transmission of confidential and other information on our computer systems and networks.

Although we take protective measures, such as software programs, firewalls and similar technology, to maintain the confidentiality, integrity and availability of our and our customers’ information, and endeavor to modify these protective measures as circumstances warrant, the nature of cyber threats continues to evolve.

Although we take protective measures, such as software programs, firewalls and similar technology, to maintain the confidentiality, integrity and availability of our and our customers’

information, and endeavor to modify these protective measures as circumstances warrant, the nature of cyber threats continues to evolve.

As a result, our computer systems, software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential customer information), account takeovers, unavailability or disruption of service, computer viruses, acts of vandalism, or other malicious code, ransomware, hacking, phishing and other cyber-attacks and other adverse events that could have an adverse security impact.

Despite the defensive measures we have taken, these threats may come from external forces, such as governments, nation-state actors, organized crime, hackers, and other third parties, including outsource or infrastructure-support providers and application developers, or may originate internally from within us.

Given the high volume of transactions, certain errors may be repeated or compounded before they are discovered and rectified.

Additionally, we may be vulnerable to cybersecurity attacks utilizing emerging technologies, such as artificial intelligence.

Given the high volume of transactions involved in our business, certain errors may be repeated or compounded before they are discovered and rectified.

We also face the risk of operational disruption, failure, termination or capacity constraints of any of the third parties that facilitate our business activities, including vendors, customers, counterparties, exchanges, clearing agents, clearinghouses or other financial intermediaries.

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Malicious actors may also attempt to compromise or induce our employees, clients or other users of our systems to disclose sensitive information or provide access to our data, and these types of risks may be difficult to detect or prevent.

There have been an increasing number of ransomware, hacking, phishing and other cyber-attacks in recent years in various industries, including ours, and cyber-security risk management has been the subject of increasing focus by our regulators.

There have been an increasing number of ransomware, hacking, phishing and other cyber-attacks in recent years in various industries, including ours, and cybersecurity risk management has been the subject of increasing focus by our regulators.

Like other companies, we have on occasion experienced, and may continue to experience, threats to our systems, including viruses, phishing and other cyber-attacks.

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The techniques used in these attacks are increasingly sophisticated, change frequently and are often not recognized until launched.

If one or more cyber-attacks occur, it could potentially jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, as well as our customers’ or other third parties’ operations, which could result in reputational damage, financial losses, customer dissatisfaction and/or regulatory penalties, which may not in all cases by covered by insurance.

If an actual, threatened or perceived cyber-attack or breach of our security occurs, our clients could lose confidence in our platforms and solutions, security measures and reliability, which would materially harm our ability to retain existing clients and gain new clients.

As a result of any such attack or breach, we may be required to expend significant resources to repair system, network

or infrastructure damage and to protect against the threat of future cyber-attacks or security breaches.

As a result of any such attack or breach, we may be required to expend significant resources to repair system, network or infrastructure damage and to protect against the threat of future cyber-attacks or security breaches.

We could also face litigation or other claims from impacted individuals as well as substantial regulatory sanctions or fines.

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Any or all of these factors could further increase the costs and consequences of a cyber-attack.

Our regulators in recent years have increased their examination and enforcement focus on all matters of our business, especially matters relating to cyber-security threats, including the assessment of firms’ vulnerability to cyber-attacks.

In particular, regulatory concerns have been raised about firms establishing effective cyber-security governance and risk management policies, practices and procedures that enable the identification of risks, testing and monitoring of the effectiveness of such procedures and adaptation to address any weaknesses;

Our regulators in recent years have increased their examination and enforcement focus on all matters of our business, especially matters relating to cybersecurity threats, including the assessment of firms’ vulnerability to cyber-attacks.

In particular, regulatory concerns have been raised about firms establishing effective cybersecurity governance and risk management policies, practices and procedures that enable the identification of risks, testing and monitoring of the effectiveness of such procedures and adaptation to address any weaknesses;

protecting firm networks and information;

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preventing and detecting unauthorized access or activities;

adopting effective mitigation and business continuity plans to timely and effectively address the impact of cyber-security breaches;

and establishing protocols for reporting cyber-security incidents.

adopting effective mitigation and business continuity plans to timely and effectively address the impact of cybersecurity breaches;

and establishing protocols for reporting cybersecurity incidents.

As we enter new jurisdictions or different product area verticals, we may be subject to new areas of risk or to cyber-attacks in areas in which we have less familiarity and tools.

A technological breakdown could also interfere with our ability to comply with financial reporting requirements.

The SEC has issued guidance stating that, as a public company, we are expected to have controls and procedures that relate to cybersecurity disclosure, and are required to disclose information relating to certain cyber-attacks or other information security breaches in disclosures required to be made under the federal securities laws.

While any insurance that we may have that covers a specific cyber-security incident may help to prevent our realizing a significant loss from the incident, it would not protect us from the effects of adverse regulatory actions that may result from the incident or a finding that we had inadequate cyber-security controls, including the reputational harm that could result from such regulatory actions.

While any insurance that we may have that covers a specific cybersecurity incident may help to prevent the realization of a significant loss from the incident, it would not protect us from the effects of adverse regulatory actions that may result from the incident or a finding that we had inadequate cybersecurity controls, including the reputational harm that could result from such regulatory actions.

Additionally, data privacy is subject to frequently changing rules and regulations in countries where we do business.

For example, rights in relation to an individual’s personal data in the EU and U.K.

are governed respectively by the General Data Protection Regulation (“GDPR”) in the EU and the equivalent Data Protection Act 2018 in the U.K.

Since May 25, 2018, when this legislation came into effect, we have been subject to new compliance obligations in relation to such personal data and the possibility of significant financial penalties for non-compliance.

Rights in relation to an individual’s personal data in the EU and U.K.

are governed respectively by the GDPR in the EU and the equivalent Data Protection Act 2018 in the U.K.

We are subject compliance obligations in relation to such personal data and the possibility of significant financial penalties for non-compliance.

We are also subject to certain U.S.

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These laws and regulations are increasing in complexity and number.

In addition to the increased cost of compliance, our failure to successfully implement or comply with appropriate processes to adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial penalties for non-compliance, expose us to litigation risk and harm our reputation.

In addition to

the increased cost of compliance, our failure to successfully implement or comply with appropriate processes to adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial penalties for non-compliance, expose us to litigation risk and harm our reputation.

The SEC recently adopted new rules that state that, as a public company, we are required to disclose certain of our processes that relate to cybersecurity and to disclose information relating to material cyber-attacks or other information security breaches.

While we view cybersecurity as a top priority, developing and maintaining our operational systems and infrastructure is challenging, particularly as a result of rapidly evolving legal and regulatory requirements and technological shifts.

Our financial, accounting, data processing or other operating and compliance systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, such as a malicious cyber-attack or other adverse events, which may adversely affect our ability to provide services.

Any such cyber incidents involving our computer systems and networks, or those of third parties important to our business, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may use artificial intelligence in our business, and challenges with properly managing its use could result in competitive harm, regulatory action, legal liability and brand or reputational harm.

We are developing and may use artificial intelligence, including, without limitation, machine learning and generative artificial intelligence (collectively, “AI”) in our business and integrate AI into our platforms, products, offerings and services.

Such use may present legal, regulatory and other challenges that could subject us to competitive harm, regulatory action, legal liability and brand or reputational harm.

If the output of any AI integrated into our platforms, products, offerings or services are or alleged to be deficient, inaccurate, infringing, violative of third-party rights or biased, our business, financial condition, and results of operations may be adversely affected.

Our success and ability to remain competitive in the industry in which we operate requires adapting to technological developments and evolving industry standards, including in the field of AI.

Our competitors or other third parties may incorporate AI into their products or services more quickly or more successfully than us, which could make our products and services obsolete, impair our ability to compete effectively and adversely affect our business.

Moreover, use of third-party AI tools could lead to the inadvertent disclosure of confidential and proprietary information, which could put us at a competitive disadvantage and adversely affect our proprietary rights, business and financial condition.

As AI capabilities improve and are increasingly adopted, we may also become more vulnerable to cybersecurity attacks that use AI.

Such cybersecurity attacks could compromise our intellectual property and other sensitive information, be costly to remediate and cause significant damage to our business, reputation and operations.

Risks Relating to Our Key Personnel and Employee Turnover

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Further, as we diversify into future business lines or geographic regions, hiring and engagement of effective management in these areas will impact our future success.

In addition, like other companies, we are experiencing turnover among operational and support staff as a result of wage pressures occurring throughout the economy.

See “Item 1-Business-Human Capital Management.” If our retention efforts are not successful or our turnover rate continues to increase in the future, our business, results of operations and financial condition could be materially adversely affected.

See “Item 1-Business-Human Capital Management.” If our retention efforts are not successful or our turnover rate increases in the future, our business, results of operations and financial condition could be materially adversely affected.

Effective succession planning is also important to our long-term success.

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Hiring, training, and successfully integrating replacement critical personnel is time consuming and, if unsuccessful could disrupt our operations, and as a result could materially adversely affect our business, financial condition, results of operations and prospects.

Lutnick, who serves as our Chief Executive Officer and as Chairman of us and Newmark, is also the Chairman of the Board, President and Chief Executive Officer of Cantor and President of CFGM, the managing general partner of Cantor.

Lutnick, who serves as our Chief Executive Officer and as Chairman of us and Executive Chairman of Newmark, is also the Chairman of the Board, President and Chief Executive Officer of Cantor and Chairman, Chief Executive Officer, President, director and sole shareholder of CFGM, the managing general partner of Cantor.

Merkel, our Executive Vice President and General Counsel, is employed as Executive Managing Director, General Counsel and Secretary of Cantor and Executive Vice President and Chief Legal Officer of Newmark.

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Currently, Mr.

Lutnick typically spends at least 50% of his time and Mr.

Merkel typically spends at least 40% of his time on our matters.

These percentages may vary depending on business developments at us or Newmark or Cantor or any of our or Cantor’s other affiliates, including SPACs.

As a result, these key employees dedicate only a portion of their professional efforts to our business and operations, and there is no contractual obligation for them to spend a specific amount of their time with us and/or Cantor and its affiliates.

Lutnick expects to spend approximately 50% of his working time and Mr.

Merkel expects to spend approximately 35% of his working time on our matters.

These percentages may vary depending on business developments, strategic initiatives or acquisition activity at us or Newmark or Cantor or any of our or their other affiliates, including SPACs.

These key employees may not be able to dedicate adequate time and attention to our business and operations, and we could experience an adverse effect on our operations due to the demands placed on these members of our management team by their other professional obligations.

In addition, these key employees’ other responsibilities could cause conflicts of interest with us.

Certain of our key employees and officers are subject to post-employment restrictive covenants, including non-competition agreements, in connection with their employment agreements and/or the BGC Holdings limited partnership agreements.

There can be no assurance that our non-competition agreements will be found enforceable if challenged in certain states, including states that generally do not enforce post-employment restrictive covenants.

The Federal Trade Commission recently proposed a rule that would render non-competition clauses unenforceable in certain situations.

If such a rule were passed (in any form) and upheld by the courts, it could have a materially adverse impact on any applicable post-employment restrictive covenants currently in place.

Additionally, the BGC Holdings limited partnership agreement and the Newmark Holdings limited partnership agreements to the extent that our executive officers and employees continue to hold Newmark Holdings limited partnership units, which include non-competition and other arrangements applicable to our key employees who are limited partners of BGC Holdings and/or Newmark Holdings, may not prevent our key employees, including Messrs.

Lutnick or our other most senior executives leave or otherwise become unavailable to render services to us, their loss could disrupt our operations, adversely impact employee retention and morale, and seriously harm our business.

We may be unable to enforce post-employment restrictive covenants applicable to our employees.

Certain of our key employees and officers are subject to post-employment restrictive covenants, including non-competition agreements, in connection with their employment agreements.

While we have had success in responding to challenges to certain of our non-compete provisions, there can be no assurance that our non-competition agreements will be found enforceable if challenged in certain states, including states that generally do not enforce post-employment restrictive covenants.

In 2023, the Federal Trade Commission proposed a rule that would render non-competition clauses unenforceable in certain situations, and is expected to vote on its proposed rule in April of this year.

If such a rule were passed (in any form) and upheld by the courts, it could have a material adverse impact on any applicable post-employment restrictive covenants currently in place.

Additionally, the Newmark Holdings limited partnership agreements, to the extent that our executive officers and employees continue to hold Newmark Holdings limited partnership units, which include non-competition and other arrangements applicable to our key employees who are limited partners of Newmark Holdings, may not prevent our key employees, including Messrs.

Lutnick and Merkel, whose employment by Cantor is not subject to these provisions in the limited partnership agreements, from resigning or competing against us.

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A material weakness is a control deficiency or combination of control deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.

To ensure compliance with Section 404, we will continue to evaluate our key internal controls over financial reporting, including with respect to acquisitions, which could be both costly and challenging.

To ensure compliance with Section 404, we will continue to evaluate our key internal controls over financial reporting, including with respect to acquisitions.

Internal controls over financial reporting, no matter how well designed, have inherent limitations.

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Similarly, we need to effectively manage any growth that we achieve in such a way as to ensure continuing compliance with all applicable control, financial reporting and legal and regulatory requirements.

Any material failure to ensure full compliance with control and financial reporting requirements could result in restatement, delay or prevent us from accessing the capital markets, and harm our reputation and the market price for our Class A common stock.

Any material failure to ensure full compliance with control and financial reporting requirements could result in restatement of our financial statements, delay or prevent us from accessing the capital markets and harm our reputation and/or the market price for our Class A common stock.

Risks Related to Seasonality

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These factors could have a material effect on our results of operations in any given period.

The seasonality of our business makes it difficult to determine during the course of the year whether planned results will be achieved, and thus to adjust to changes in expectations.

The seasonality of our business makes it difficult to determine during the course of the year whether planned results will be achieved and to adjust to changes in expectations.

To the extent that we are not able to identify and adjust for changes in expectations or we are confronted with negative conditions that inordinately impact seasonal norms, our business, financial condition, results of operations and prospects could be materially adversely affected.

Risks Related to General Market Conditions

Consolidation and concentration of market share in the banking, brokerage, exchange and financial services industries could materially adversely affect our business, financial condition, results of operations and prospects because we may not be able to compete successfully.

In recent years, there has been substantial consolidation and concentration of market share among companies in the banking, brokerage, exchange, and financial services industries, resulting in increasingly large existing and potential competitors, and increased concentration in markets dominated by some of our largest customers.

In addition, some of our large broker-dealer customers, such as Deutsche Bank, Barclays, Goldman Sachs, and Credit Suisse, have reduced their sales and trading business in fixed income, currency, and commodities.

This is in addition to the reductions in these businesses already completed by customers, including Morgan Stanley, UBS, and The Royal Bank of Scotland.

The combination of this consolidation and concentration of market share and the reduction by large customers of certain businesses may lead to increased concentration among our brokerage customers, which may reduce our ability to negotiate pricing and other matters with our customers and lower volumes.

Additionally, the sales and trading global revenue market share has generally become more concentrated over the past five years among five of the top investment banks across equities, fixed income, currencies, and commodities.

We also face existing and potential competition from large exchanges, which seek or may seek to migrate trading from the inter-dealer market to their own platform.

Consolidation and concentration of market share are occurring in this area as well.

For example, CME acquired NEX;

BATS Global Markets acquired the foreign-exchange trading venue, Hotspot, from KCG Holdings (“KCG”).

KCG was itself acquired by Virtu in 2017, while BATS was acquired by CBOE.

Intercontinental Exchange acquired BondPoint, a provider of electronic fixed income trading solutions, from Virtu Financial, as well as TMC Bonds.

Additionally, Deutsche Börse acquired 360T, CBOE acquired Hotspot, the Hong Kong Exchange and Clearing Limited acquired the London Metal Exchange, ICE acquired NYSE Euronext, London Stock Exchange completed its acquisition of Refinitiv as well as Quantile, MarketAxess acquired LiquidityEdge, and Tradeweb acquired Nasdaq’s U.S.

fixed income electronic trading platform, formerly known as eSpeed.

In 2013, BGC sold the eSpeed platform to Nasdaq, and subsequently launched a competing platform, Fenics UST.

In addition, in April of 2019, Tradeweb completed its initial public offering, which may increase its ability to hire and acquire in competition with us.

In March 2021, TP ICAP acquired Liquidnet, an electronic trading network.

Consolidation among exchanges may increase their financial resources and ability to compete with us.

Continued consolidation and concentration of market share in the financial services industry and especially among our customers could lead to the exertion of additional pricing pressure by our customers, impacting the commissions and spreads we generate from our brokerage services.

Further, the consolidation and concentration among exchanges, and expansion by these exchanges into derivative and other non-equity trading markets, will increase competition for customer trades and place additional pricing pressure on commissions and spreads.

These developments have increased competition from firms with potentially greater access to capital resources than we have.

Finally, consolidation among our competitors other than exchanges

could result in increased resources and product or service offerings for our competitors.

If we are not able to compete successfully in the future, our business, financial condition, results of operations and prospects could be materially adversely affected.

The migration of OTC swaps to SEF markets may adversely impact volumes, liquidity, and demand for our services in certain markets.

BGC Derivative Markets and GFI Swaps Exchange, our subsidiaries, operate as SEFs.

Mandatory Dodd-Frank Act compliant execution on SEFs by eligible U.S.

persons commenced in February 2014 for “made available to trade” products, and a wide range of other rules relating to the execution and clearing of derivative products have been finalized.

As customers or market participants transition to the rules associated with the Dodd-Frank Act, they may experience disruptions which may negatively impact these products and the market for them may be less robust resulting in less volume and liquidity and less demand for our services or the market in general.

While we continue to have a compliance framework in place to comply with both existing and proposed rules and regulations, including any potential relaxation of rules and regulations, our business in these products could be significantly reduced and our business, financial condition, results of operations and prospects could be materially adversely affected by applicable regulations.

Even after the award of permanent registration status to our SEFs, we will incur significant additional costs, our revenues may be lower than in the past and our financial condition and results of operations may be materially adversely affected by future events.

The Dodd-Frank Act mandated that certain cleared swaps (subject to an exemption from the clearing requirement) trade on either a SEF or DCM.

SEF and DCM core principles relate to trading and product requirements, compliance and audit-trail obligations, governance and disciplinary requirements, operational capabilities, surveillance obligations and financial information and resource requirements.

While these principles may or may not be permanently enforced, we do know that we will be subject to a more complex regulatory framework going forward, and that there will be significant costs to prepare for and to comply with these ongoing regulatory requirements and potential amendments.

We will incur increased legal fees, personnel expenses, and other costs, as we work to analyze and implement the necessary legal structure for full compliance with all applicable regulations.

There will also be significant costs related to the development, operation and enhancement of our technology relating to trade execution, trade reporting, surveillance, compliance and back-up and disaster recovery plans designed to meet the requirements of the regulators.

In addition, it is not clear at this point what the impact of these rules and regulations will be on the markets in which we currently provide our SEF services.

During the continued implementation of the Dodd-Frank Act and related rules, the markets for cleared and non-cleared swaps may continue to be less robust, there may be less volume and liquidity in these markets and there may be less demand for our services.

On June 25, 2020, the CFTC approved a final rule prohibiting post-trade name give-up for swaps executed, prearranged or prenegotiated anonymously on or pursuant to the rules of a SEF and intended to be cleared.

The rule provides exemptions for package transactions that include a component transaction that is not a swap that is intended to be cleared.

The rule went into effect on November 1, 2020 for swaps subject to the trade execution requirement under the Commodity Exchange Act Section 2(h)(8) and July 5, 2021 for swaps not subject to the trade execution requirement but intended to be cleared.

On April 6, 2022, the SEC proposed Rules for the Registration and Regulation of Security-Based Swap Execution Facilities.

The SEC proposed new Regulation SE under the Exchange Act to create a regime for the registration and regulation of security-based SEFs.

The new regulatory framework was one of the major reforms required under Title VII of the Dodd-Frank Act relating to the over-the-counter derivatives market.

In developing this proposal, the SEC sought to harmonize as closely as practicable with parallel rules of the CFTC that govern SEFs and swap execution generally.

The proposal was published on SEC.gov and in the Federal Register with a public comment period of 60 days.

If adopted, the proposal would implement the Exchange Act’s trade execution requirement for security-based swaps and address the cross-border application of that requirement;

implement Section 765 of the Dodd-Frank Act to mitigate conflicts of interest at security-based SEFs and national securities exchanges that trade security-based swaps;

and promote consistency between proposed Regulation SE and existing rules under the Exchange Act.

While we continue to have a compliance framework in place to comply with both existing and proposed rules and regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or negative impact on our business, financial condition, results of operations and prospects.

Certain banks and other institutions may continue to be limited in their conduct of proprietary trading and may be further limited from trading in certain derivatives.

The new rules, including the proprietary trading restrictions for certain banks

and other institutions, could materially impact transaction volumes and liquidity in these markets and our business, financial condition, results of operations and prospects could be materially adversely impacted as a result.

If we fail to continue to qualify as a SEF under any of these conditions, we may be unable to maintain our position as a provider of execution and brokerage services in the markets for many of the OTC products for which we have traditionally acted as an intermediary.

This would have a broad impact on us and could have a material adverse effect on our business' financial condition, results operations, and prospects.

Our commodities derivatives activities, including those related to electricity, natural gas and environmental interests, subject us to extensive regulation, potential catastrophic events and other risks that may result in our incurring significant costs and liabilities.

We engage in the brokerage of commodities derivatives, including those involving electricity and natural gas, and related products and indices.

These activities subject us and our customers to extensive regulatory oversight, involving federal, state, and local and foreign commodities, energy, environmental, and other governmental laws and regulations and may result in our incurring significant costs and liabilities.

We or our clients may incur substantial costs in complying with current or future laws and regulations relating to our commodities-related activities, including trading of electricity, natural gas, and environmental interests.

New regulation of OTC derivatives markets in the U.S.

and similar legislation proposed or adopted abroad will impose significant new costs and new requirements on the commodities derivatives activities of us and our customers.

Therefore, the overall reputation of us or our customers may be adversely affected by the current or future regulatory environment.

Failure to comply with these laws and regulations may result in substantial civil and criminal penalties and fines for market participants.

The commodities-related activities of us and our customers are also subject to the risk of unforeseen catastrophic events, many of which are outside of our control, which could result in significant liabilities for us or our customers.

We may not be able to obtain insurance to cover these risks, and the insurance that we have may be inadequate to cover our liabilities.

The occurrence of any of such events may prevent us from performing under our agreements with customers, may impair our operations, and may result in litigation, regulatory action, negative publicity or other reputational harm, which could have a material negative effect on our business, financial condition, results of operations and prospects.

Risks Related to Regulatory and Legal Compliance

The financial services industry in which we operate is subject to significant regulation.

The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may result in damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and legal liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable legal and professional standards, or for other reasons, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Many aspects of our current business involve substantial risks of liability.

In the normal course of business, we have been a party to investigations, administrative proceedings, lawsuits, arbitrations, and other actions involving primarily claims for damages.

In certain circumstances, we could also face potential criminal investigations, enforcement actions or liability, including fines or other penalties.

Examinations, inspections, regulatory inquiries and subpoenas or other requests for information or testimony may cause us to incur significant expenses, including fees for legal representation and other professional advisors and costs associated with document production and remediation efforts.

Such regulatory, legal, or other actions may also be directed at certain executives or employees who may be critical to our business or to particular brokerage desks.

The risks associated with such matters often may be difficult to assess or quantify, and their existence and magnitude often remain unknown for substantial periods of time.

The expansion of our businesses, including into new areas, imposes additional risks of liability.

A settlement of, or judgment related to, any such matters could result in regulatory, civil or criminal liability, fines, penalties, restrictions or limitations on our operations and activities and other sanctions and could otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.

Any such action could also cause us significant reputational harm, which, in turn, could seriously harm us.

In addition, regardless of the outcome of such matters, we may incur significant legal and other costs, including substantial management time, dealing with such matters, even if we are not a party to the litigation or a target of the inquiry.

We depend to a large extent on our relationships with our customers and our reputation for integrity and high-caliber professional services to attract and retain customers.

We are subject to the risk of failure of our employees to comply with applicable laws, rules and regulations or to be adequately supervised by their managers, and to the extent that such individuals do not meet these requirements, we may be subject to the risk of fines or other penalties as well as reputational risk.

It is not always possible to deter and detect employee misconduct or fraud.

While we have various supervisory systems and compliance processes and procedures in place, and seek to mitigate applicable risks, the precautions we take to deter and detect and prevent this activity may not be effective in all cases.

As a result, if our customers are not satisfied with our products or services, or our employees do not adhere to all applicable legal and professional standards, such matters may be more damaging to our business than to other types of businesses.

Significant regulatory action or substantial legal liability against us could have a material adverse effect on our business, financial condition, results of operations and prospects, or cause significant reputational damage to us, which could seriously harm us.

We are subject to regulatory capital requirements on our regulated business, and a significant operating loss or any extraordinary charge against capital could materially adversely affect our ability to expand or, depending upon the magnitude of the loss or charge, even to maintain the current level of our business.

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In the U.S., the SEC, FINRA, the CFTC, the NFA and various other regulatory bodies have stringent provisions with respect to capital applicable to the operation of brokerage firms, which vary depending upon the nature and extent of these entities’ activities.

Four of our subsidiaries, BGCF, GFI Securities LLC, Fenics Execution LLC and Mint are registered with the SEC and subject to the Uniform Net Capital Requirements.

As an FCM, Mint is also subject to CFTC capital requirements.

Four of our subsidiaries, BGCF, GFI Securities LLC, Fenics Execution LLC and Mint Brokers are registered with the SEC and subject to the Uniform Net Capital Requirements.

As an FCM, Mint Brokers is also subject to CFTC capital requirements.

BGCF is also a member of the FICC, which imposes capital requirements on its members.

These entities are subject to SEC, FINRA, CFTC and NFA net capital requirements.

In addition, our SEFs, BGC Derivative Markets, GFI Swaps Exchange, FMX Futures Exchange, and CX Clearinghouse, L.P.

are required to maintain financial resources to cover operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six months’ operating costs.

Our international operations are also subject to capital requirements in their local jurisdictions.

BGC Brokers L.P., BGC European Holdings, L.P, GFI Brokers Limited and GFI Securities Limited, which are based in the U.K., are currently subject to capital requirements established by the FCA.

The capital requirements of our French entities (and its EU branches) are predominantly set by ACPR and AMF.

In addition, our SEFs, BGC Derivative Markets and GFI Swaps Exchange, are required to maintain financial resources to cover operating costs for at least one year, keeping at least enough cash or highly liquid securities to cover six months’ operating costs.

On January 22, 2024, FMX received approval from the CFTC to operate an exchange for U.S.

Treasury and SOFR futures.

The launch and operation of FMX may continue to require regulatory approval which could subject us to additional costs or obstacles.

Our international operations are also subject to capital requirements in their local jurisdiction.

BGC Brokers L.P., GFI Brokers Limited, and GFI Securities Limited, which are based in the U.K., are currently subject to solo capital requirements established by the FCA’s Investment Firm Prudential Regime.

In addition, BGC European Holdings L.P.is subject to the FCA’s consolidated capital requirements.

The capital requirements of our French entities (and their EU branches) are predominantly set by the ACPR and AMF.

and EU authorities apply stringent provisions with respect to capital applicable to the operation of these brokerage firms, which vary depending upon the nature and extent of their activities.

EU policymakers introduced a new capital regime applicable to EU Investment Firms with a phased implementation that began in June 2021.

has introduced a regime that, while applying different rules and methods, is largely similar in its objectives.

This regime entered into force beginning in January 2022, with a similarly phased implementation.

In addition, the majority of our other foreign subsidiaries are subject to similar regulation by the relevant authorities in the jurisdictions in which they do business, such as Australia, Hong Kong and Singapore.

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If the capital rules are changed or expanded, or if there is an unusually large charge against capital, our operations that require the intensive use of capital would be limited.

Our ability to withdraw capital from our regulated subsidiaries is subject to restrictions, which, in turn, could limit our ability to pay our indebtedness and other expenses, dividends on our Class A common stock, and distributions on our BGC Holdings limited partnership interests, and to repurchase shares of our Class A common stock or purchase BGC Holdings limited partnership interests or other equity interests in our subsidiaries, including from Cantor, our executive officers, other employees, partners and others, and pursue strategic acquisitions or other growth opportunities.

Our ability to withdraw capital from our regulated subsidiaries is subject to restrictions, which, in turn, could limit our ability to pay our indebtedness, other expenses, and dividends on our Class A common stock, to repurchase shares of our Class A common stock or to pursue strategic acquisitions or other growth opportunities.

It is possible that capital requirements may also be relaxed as a result of future changes in U.S.

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No assurance can be given that required capital levels will remain stable or that we will not incur substantial expenses in connection with maintaining current or increased capital levels or engaging in business restructurings or other activities in response to these requirements.

In addition, financial services firms such as ours are subject to numerous conflicts of interests or perceived conflicts, including for example principal trading and trading to make markets.

In addition, financial services firms such as ours are subject to numerous conflicts of interests or perceived conflicts, including principal trading and trading to make markets.

We have adopted various policies, controls, and procedures to address or limit actual or perceived conflicts, and we will regularly seek to review and update our policies, controls and procedures.

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Failure to adhere to these policies, controls and procedures may result in regulatory sanctions or customer claims.

The Dodd-Frank Act mandated that certain cleared swaps (subject to an exemption from the clearing requirement) trade on either a SEF or DCM.

We will incur increased legal fees,

personnel expenses, and other costs, as we work to analyze and implement the necessary legal structure for full compliance with all applicable regulations.

On November 2, 2023, the SEC passed rules for the registration and regulation of security-based swap execution facilities.

New Regulation SE under the Exchange Act creates a regime for the registration and regulation of security-based SEFs.

The new regulatory framework was one of the major reforms required under Title VII of the Dodd-Frank Act relating to the over-the-counter derivatives market.

In developing this proposal, the SEC sought to harmonize as closely as practicable with parallel rules of the CFTC that govern SEFs and swap execution generally.

Regulation SE implements the Exchange Act’s trade execution requirement for security-based swaps and address the cross-border application of that requirement;

implement Section 765 of the Dodd-Frank Act to mitigate conflicts of interest at security-based SEFs and national securities exchanges that trade security-based swaps;

and promote consistency between proposed Regulation SE and existing rules under the Exchange Act.

While we continue to have a compliance framework in place to comply with both CFTC and SEC rules and regulations, it is possible that the existing regulatory framework may be amended, which amendments could have a positive or negative impact on our business, financial condition, results of operations and prospects.

Certain banks and other institutions may continue to be limited in their conduct of proprietary trading and may be further limited from trading in certain derivatives.

The new rules, including the proprietary trading restrictions for certain banks and other institutions, could materially impact transaction volumes and liquidity in these markets and our business, financial condition, results of operations and prospects could be materially adversely impacted as a result.

This would have a broad impact on us and could have a material adverse effect on our business’ financial condition, results operations, and prospects.

Our energy and commodities activities, including those related to environmental and emission, power, oil, and natural gas products, subject us to extensive regulation, potential catastrophic events and other risks that may result in our incurring significant costs and liabilities.

We engage in the brokerage of a wide range of energy and commodities products, including environmental and emission, power, oil, and natural gas products.

These activities subject us and our customers to extensive regulatory oversight, involving federal, state, and local and foreign commodities, energy, environmental, and other governmental laws, and regulations and may result in significant costs and liabilities.

We or our clients may incur substantial costs in complying with current or future laws and regulations relating to our energy and commodities-related activities.

New regulation of OTC derivatives markets in the U.S.

and similar legislation proposed or adopted abroad could impose significant costs and new requirements on the commodities derivatives activities of us and our customers.

Therefore, the overall reputation of us or our customers may be adversely affected by the current or future regulatory environment.

Failure to comply with these laws and regulations may result in substantial civil and criminal penalties and fines for market participants.

We may not be able to obtain insurance to cover these risks, and the insurance that we have may be inadequate to cover our liabilities.

Our business, financial condition, results of operations and prospects could be materially adversely affected by new laws, rules, or regulations or by changes in existing law, rules or regulations or the application thereof.

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Changes in legislation and in the rules and regulations promulgated by the SEC, FINRA, the CFTC, the NFA, the U.S.

Treasury, the FCA, the European Commission, ESMA and other domestic and international regulators and self-regulatory organizations, as well as changes in the interpretation or enforcement of existing laws and rules, often directly affect the method of operation and profitability of brokerage and could result in restrictions in the way we conduct our business.

of operation and profitability of brokerages and could result in restrictions in the way we conduct our business.

For example, the U.S.

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Certain of our existing EU derivatives and fixed income execution business now take place on OTFs, and we currently operate one OTF for each of the U.K.-regulated entities, one in France at Aurel BGC and one MTF under GFI Securities Limited.

In 2019, a new European Commission took office which may over the course of its five-year mandate introduce new legislative proposals for the financial services sector.

This will include various legislative reviews of MIFID, which have started in 2020.

In the U.S., the SEC has proposed rules to expand Regulation ATS to cover ATS trading government securities.

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It is possible that one or more of such provisions could negatively impact our costs and our effective tax rate, which would affect our after-tax earnings.

If any of such changes to tax law were implemented and/or deemed to apply to us, they could have a material

adverse effect on our business, financial condition, results of operations and prospects, including on our ability to attract, compensate and retain brokers, salespeople, managers, technology professionals and other front-office personnel.

If any of such changes to tax law were implemented and/or deemed to apply to us, they could have a material adverse effect on our business, financial condition, results of operations and prospects, including on our ability to attract, compensate and retain brokers, salespeople, managers, technology professionals and other front-office personnel.

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Self-regulatory organizations such as FINRA and the NFA, along with statutory bodies such as the SEC, the CFTC, and the FCA, and other international regulators, require strict compliance with their rules and regulations.

In addition, as a result of regulatory actions, our registration statements under the Securities Act will be subject to SEC review prior to effectiveness, which may lengthen the time required for us to raise capital, reducing our access to the capital markets or increasing our cost of capital.

Firms in the financial services industry, including us, have experienced increased scrutiny in recent years, and penalties, fines and other sanctions sought by regulatory authorities, including the SEC, the CFTC, FINRA, the NFA, state securities commissions and state attorneys general in the U.S., and the FCA in the U.K.

and other international regulators, have increased accordingly.

and other international regulators, have

increased accordingly.

This trend toward a heightened regulatory and enforcement environment can be expected to continue for the foreseeable future, and this environment may create uncertainty.

From time to time, we have been and are subject to periodic examinations, inspections, and investigations, including periodic risk assessment and related reviews of our U.K.

As a result of such reviews, we may be subject to increased monitoring and be required to include or enhance certain regulatory structures and frameworks in our operating procedures, systems, and controls.

As a result of such reviews, we have been and may be subject to increased monitoring and be required to include or enhance certain regulatory structures and frameworks in our operating procedures, systems, and controls.

Increasingly, the FCA has developed a practice of requiring senior officers of regulated firms to provide individual attestations or undertakings as to the status of the firm’s control environment, compliance with specific rules and regulations, or the completion of required tasks.

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SMCR has increased the cost of compliance and will potentially increase financial penalties for non-compliance.

These activities have resulted, and may in the future result, in significant costs and remediation expenses, and possible disciplinary actions by the SEC, the CFTC, the FCA, self-regulatory organizations and state securities administrators and have impacted, and may impact in the future, our acquisitions of regulated businesses or entry into new business lines.

Many aspects of our current business involve substantial risks of liability.

The expansion of our businesses, including into new areas, imposes additional risks of liability.

In the normal course of business, we have been a party to investigations, administrative proceedings, lawsuits, arbitrations, and other actions involving primarily claims for damages.

In certain circumstances, we could also face potential criminal investigations, enforcement actions or liability, including fines or other penalties .

Such regulatory, legal, or other actions may also be directed at certain executives or employees who may be critical to our business or to particular brokerage desks.

The risks associated with such matters often may be difficult to assess or quantify, and their existence and magnitude often remain unknown for substantial periods of time.

Any such action could also cause us significant reputational harm, which, in turn, could seriously harm us.

For example, in September 2020, the SEC announced a settlement with BGC regarding alleged negligent disclosure violations related to one of BGC's non-GAAP financial measures for periods beginning with the first quarter of 2015 through the first quarter of 2016.

All of the relevant disclosures related to those periods and pre-dated the SEC staff’s May 2016 detailed compliance and disclosure guidance with respect to non-GAAP presentations.

BGC revised its non-GAAP presentation beginning with the second quarter of 2016 as a result of the SEC’s guidance, and the SEC has made no allegations with regard to any periods following the first quarter of 2016.

In connection with the SEC settlement, BGC was ordered to cease and desist from any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, Section 13(a) of the Exchange Act and Rule 13a-11 thereunder, and Rule 100(b) of Regulation G, and agreed to pay a civil penalty of $1.4 million without admitting or denying the SEC’s allegations.

During the fourth quarter of 2020, management identified the theft of UK tax payment related funds from the Company.

The theft, which occurred over several years ending September 2020, was perpetrated by two individuals associated with the Company, and did not involve the operations or business of the Company.

Litigation was commenced against the two individuals seeking recovery of stolen amounts.

One individual has admitted to all claims and we are now recovering assets pursuant to a court endorsed consent order.

Litigation continues against the second individual.

The cumulative impact to the Company’s “Consolidated net income (loss)” as a result of the theft was determined to be $35.2 million.

The Company expects to recover most or substantially all of the stolen funds through a combination of insurance and return of assets through litigation.

We depend to a large extent on our relationships with our customers and our reputation for integrity and high-caliber professional services to attract and retain customers.

Disciplinary actions by the SEC, the CFTC, the FCA, self-regulatory organizations and state securities administrators have impacted, and may impact in the future, our acquisitions of regulated businesses or entry into new business lines, and have resulted, and may result in the future, in significant costs and remediation expenses.

Risks Related to Competition

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As a result, we must attract and retain highly qualified personnel.

Competition for talent is intense, especially for brokers with experience in the specialized businesses in which we participate or we may seek to enter.

If we are unable to hire or retain highly qualified professionals, including retaining those

employed by businesses we acquire in the future, we may not be able to enter new brokerage markets or develop new products or services.

If we lose one or more of our brokers in a particular market in which we participate, our revenues may decrease, and we may lose market share.

Competition for talent is intense, especially for brokers with experience in the specialized businesses in which we participate or may seek to enter.

If we are unable to hire or retain highly qualified professionals, including retaining those employed by businesses we acquire in the future, we may not be able to enter new brokerage markets or develop new products or services.

If we lose key brokers in a particular market in which we participate, our revenues may decrease, and we may lose market share.

In addition, recruitment and retention of qualified professionals could result in substantial additional costs, including costs and management time associated with litigation, arbitration or other claims related to employee hires and/or departures.

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We also compete with companies that provide alternative products and services, such as contracts traded on futures exchanges, and trading processes, such as the direct dealer-to-dealer market for government securities and stock exchange markets for corporate equities, debt and other securities.

We increasingly compete, directly or indirectly, with exchanges for the execution of trades in certain products, mainly in derivatives such as futures, swaps, options, and options on futures, such as the platforms operated by the CME Group and we will compete directly with the CME Group following the active launch of our FMX Futures Exchange.

Certain exchanges have made and will likely continue to make attempts to move certain OTC-traded products to exchange-based execution, or to create listed derivatives products that mimic the qualities of similar OTC-traded products.

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and Tradeweb Markets, in fixed income products or various OTC FX platforms owned by exchanges such as CBOE and Deutsche Börse.

In addition, financial data and information firms such as Refinitiv and Bloomberg L.P.

financial data and information firms such as LSEG Data & Analytics and Bloomberg L.P.

operate trading platforms for both OTC and listed products and may attempt to compete with us for trade execution in the future.

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Competitors and customers of our financial brokerage business have together and individually offered market data and information products and services in competition with those offered and expected to be offered by us.

In addition, some of our large broker-dealer customers have reduced their sales and trading business in fixed income, currency, and commodities.

We also face existing and potential competition from large exchanges, which seek or may seek to migrate trading from the inter-dealer market to their own platform.

Consolidation and concentration of market share are occurring in this area as well.

From 2017 to 2021, for example, we saw consolidation and increased competition from several of our competitors, such as Tradeweb’s acquisition of Nasdaq’s U.S.

fixed income trading platform (formerly known as eSpeed and owned by us) and TP ICAP’s acquisition of Liquidnet.

Consolidation among exchanges may increase their financial resources and ability to compete with us.

additional pricing pressure on commissions and spreads.

These developments have increased competition from firms with potentially greater access to capital resources than we have.

Finally, consolidation among our competitors other than exchanges could result in increased resources and product or service offerings for our competitors.

If we are not able to compete successfully in the future, our business, financial condition, results of operations and prospects could be materially adversely affected.

Risks Related to Our International Operations

We are generally subject to various risks inherent in doing business in the international financial markets, in addition to those unique to the regulated brokerage industry, and any failure to identify and manage those risks could materially adversely affect our business, financial condition, results of operations and prospects.

We are subject to various risks inherent in doing business in the international financial markets, in addition to those unique to the regulated brokerage industry.

We currently provide products and services to customers in many foreign countries, and we may seek to further expand our operations into additional jurisdictions.

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• additional or unexpected changes in regulatory requirements, capital requirements, tariffs and other trade barriers;

• the impact of the laws, rules and regulations of foreign governmental and regulatory authorities of each country in which we conduct business, including initiatives such as Brexit;

• the impact of the laws, rules and regulations of foreign governmental and regulatory authorities of each country in which we conduct business;

• possible nationalization, expropriation and regulatory, political and price controls;

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Our credit ratings and/or the associated rating outlooks can be revised upward or downward at any time by a rating agency if such rating agency decides the circumstances of BGC or related companies warrant such a change.

Any negative change or a downgrade in credit ratings and/or the associated rating outlooks could adversely affect the availability of debt financing on acceptable terms, as well as the cost and other terms upon which any such financing can be obtained.

In addition, credit ratings and associated outlooks may be important to customers or counterparties in certain markets and in certain transactions.

Any negative change or a downgrade in credit ratings and/or the associated ratings outlooks could adversely affect the availability of debt financing on acceptable terms, as well as the cost and other terms upon which any such financing can be obtained.

See “—Risks Related to Liquidity, Funding and Indebtedness—Credit ratings downgrades could adversely affect our cost of capital and the availability of debt financing.” In addition, credit ratings and associated outlooks may be important to customers or counterparties in certain markets and in certain transactions.

Additional collateral may be required in the event of a negative change in credit ratings or rating outlooks.

Our activities are subject to credit and performance risks, which could result in us incurring significant losses that could materially adversely affect our business, financial condition, results of operations and prospects.

Our activities are subject to credit and performance risks, which could result in us incurring significant losses that could materially adversely affect us.

Our activities are subject to credit and performance risks.

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In agency transactions, we charge a commission for connecting buyers and sellers and assisting in the negotiation of the price and other material terms of the transaction.

After all material terms of a transaction are agreed upon, we identify the buyer and seller to each other and leave them to settle the trade directly.

We are exposed to credit risk for commissions, as we

bill customers for our agency brokerage services.

After all material terms of a transaction are agreed upon, we identify the

buyer and seller to each other and leave them to settle the trade directly.

We are exposed to credit risk for commissions, as we bill customers for our agency brokerage services.

Our customers may default on their obligations to us due to disputes, bankruptcy, lack of liquidity, operational failure, or other reasons.

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Rates, Credit, FX, Energy and Commodities, and Equities.

Our brokerage revenues are strongest in our rates products, which accounted for approximately 30.6% of our total brokerage revenues on a consolidated basis for the year ended December 31, 2022.

While we focus on expanding and have successfully diversified our product offerings, we may currently be exposed to any adverse change or condition affecting the rates product market.

Our brokerage revenues are strongest in our Rates asset class, which accounted for approximately 33.3% of our total brokerage revenues on a consolidated basis for the year ended December 31, 2023.

While we focus on expanding and have successfully diversified our product offerings, we may currently be exposed to any adverse change or condition affecting the interest rates market.

Accordingly, the concentration of our brokerage business on rates products subjects our results to a greater market risk than if we had more diversified product offerings.

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Reduced spreads in pricing, levels of trading activity and trading through market makers and/or specialists could materially adversely affect our business, financial condition, results of operations and prospects.

Computer-generated buy/sell programs and other technological advances and regulatory changes in the marketplace may continue to tighten securities spreads.

In addition, new and enhanced alternative trading systems, such as electronic communications networks, have emerged as alternatives for individual and institutional investors, as well as brokerage firms.

Computer-generated buy/sell programs and other technological advances, including AI, and regulatory changes in the marketplace may continue to tighten securities spreads.

In addition, new and enhanced alternative trading systems, such as

electronic communications networks, have emerged as alternatives for individual and institutional investors, as well as brokerage firms.

As such systems do not direct trades through market makers, their use could result in reduced revenues for us or for our customers.

In addition, reduced trading levels could lead to lower revenues which could materially adversely affect our businesses, financial condition, results of operations and prospects.

We have market risk exposure from unmatched principal transactions entered into by some of our desks, as well as holdings of marketable equity securities, which could result in losses and have a material adverse effect on our business, financial condition, results of operations, and prospects for any particular reporting period.

We have market risk exposure from unmatched principal transactions entered into by some of our desks, as well as holdings of marketable equity securities, which could result in losses and have that could have a material adverse effect on our business, financial condition, results of operations, and prospects for any particular reporting period.

In addition, financial fraud or unauthorized trading activity could also adversely impact our business, financial condition, results of operations and prospects.

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In addition, if these entities were to fail and cease operations, we could lose the entire value of our investment and the stream of any shared profits from trading.

Other General Risks

Our operations are global and exchange rate fluctuations and international market events could materially adversely impact our business, financial condition, results of operations and prospects.

Because our operations are global, we are exposed to risks associated with changes in FX rates.

Changes in foreign currency rates create volatility in the U.S.

dollar equivalent of revenues and expenses which may result in higher or lower values than in an otherwise constant currency exchange rate environment, in particular with regard to British Pounds and Euros.

In addition, changes in the remeasurement of our foreign currency denominated net assets are recorded as part of our results of operations and fluctuate with changes in foreign currency rates.

We monitor our net exposure in foreign currencies on a daily basis and hedge our exposure as deemed appropriate with major financial institutions.

However, potential movements in the U.S.

dollar against other currencies in which we earn revenues have in the past and may in the future materially adversely affect our financial results.

Furthermore, our revenues derived from non-U.S.

operations are subject to risk of loss from social or political instability, changes in government policies or policies of central banks, downgrades in the credit ratings of sovereign countries, expropriation, nationalization, confiscation of assets and unfavorable legislative, political developments, and other events in such non-U.S.

jurisdictions.

Revenues from the trading of non-U.S.

securities may be subject to negative fluctuations as a result of the above factors.

The impact of these fluctuations on our results could be magnified because generally non-U.S.

trading markets, particularly in emerging market countries, are smaller, less liquid and more volatile than U.S.

trading markets.

Employee misconduct, fraud, miscommunication or error could harm us by impairing our ability to attract and retain customers and subjecting us to significant financial losses, legal liability, regulatory sanctions and penalties and reputational harm;

moreover, misconduct is difficult to detect and deter, and error is difficult to prevent.

Employee misconduct, fraud or error could subject us to financial losses, legal liability, and regulatory sanctions and penalties and could seriously harm our reputation and negatively affect us.

Misconduct or fraud by employees could include engaging in improper or unauthorized transactions or activities, failing to properly supervise other employees or improperly using confidential information.

Employee errors and miscommunication, including mistakes in executing, recording or processing transactions for customers, could cause us to suffer liability, loss, sanction and/or reputational harm, which could expose us to the risk of material losses even if the errors and miscommunication are detected and the transactions are unwound or reversed.

If our customers are not able to settle their transactions on a timely basis, the time in which employee errors and miscommunication are detected may be increased and our risk of material loss could be increased.

The risk of employee error and miscommunication may be greater for products or services that are new or have non-standardized terms.

It is not always possible to deter and detect employee misconduct or fraud or prevent errors and miscommunications.

See “—The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may result in damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and legal liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable legal and professional standards, or for other reasons, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.”

Although portions of our compensation structure are variable, significant parts of our cost structure are fixed, and if our revenues decline and we are unable to reduce our costs in the amount that our revenues decline, our profitability could be materially adversely affected.

Although portions of our compensation structure are variable, significant parts of our cost structure are fixed.

We base our overall cost structure on historical and expected levels of demand for our products and services.

If demand for these products and services and our resulting revenues decline, we may not be able to adjust our cost structure on a timely basis.

If we are unable to reduce our costs in the amount that our revenues decline, our profitability could be materially adversely affected.

Increased scrutiny and changing expectations from stockholders with respect to the Company's ESG practices may result in additional costs or risks.

Companies across our industry are facing increasing scrutiny related to their ESG practices.

Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.

Further, customer bids, requests for proposals and other customer arrangements or opportunities may require disclosure of ESG metrics in order to compete for business.

While we are focused on our ESG efforts and disclosures, if our ESG practices do not meet customer, investor or other industry stockholder expectations, which continue to evolve, we may not win or may lose customers, or may incur additional costs and our business, financial condition, results of operations and prospects could be materially adversely affected.

RISKS RELATED TO OUR CORPORATE AND PARTNERSHIP STRUCTURE

RISKS RELATED TO OUR CORPORATE STRUCTURE

Because our voting control is concentrated among the holders of our Class B common stock, the market price of our Class A common stock may be materially adversely affected by its disparate voting rights.

As of February 27, 2023 , Cantor (including CFGM) beneficially owned all of the outstanding shares of our Class B common stock, representing approximately 58.3% of our total voting power.

In addition, Cantor has the right to exchange exchangeable partnership interests in BGC Holdings into additional shares of our Class B common stock, and pursuant to an exchange agreement with us, Cantor has the right to exchange shares of our Class A common stock for additional shares of our Class B common stock.

The holders of our Class A common stock and Class B common stock have substantially identical rights, except that holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to 10 votes per share on all matters to be voted on by stockholders in general.

As of December 31, 2023, Cantor (including CFGM) beneficially owned 96.3 million shares of our Class B common stock, representing 88.0% of our outstanding Class B common stock and approximately 64.8% of our total voting power.

As of December 31, 2023, Mr.

Lutnick and individuals related to Mr.

Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12.0% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power.

Together, Cantor, CFGM, Mr.

Lutnick and individuals related to Mr.

Lutnick own 100% of the outstanding shares of BGC Class B common stock and approximately 73.7% of our total voting power.

As long as Cantor beneficially owns a majority of our total voting power, it will have the ability, without the consent of the public holders of our Class A common stock, to elect all of the members of our Board and to control our management and affairs.

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Lutnick, the shares of our Class B common stock issued to Cantor may be transferred without conversion to our Class A common stock.

BGC Class B common stock is controlled by Cantor and is not subject to conversion or termination by our Board or any committee thereof, or any other stockholder or third party.

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We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our Class A stockholders.

Some provisions of the Delaware General Corporation Law (the “DGCL”), our restated certificate of incorporation, and our amended and restated bylaws could make the following more difficult:

Some provisions of the DGCL, our restated certificate of incorporation, and our amended and restated bylaws could make the following more difficult:

• acquisition of us by means of a tender offer;

• acquisition of us by means of a proxy contest or otherwise;

• acquiring control of our Board by means of a proxy contest or otherwise;

• removal of our incumbent officers and directors.

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These provisions may also encourage persons seeking to acquire control of us to first negotiate with our Board.

We believe that the benefits of increased protection give us the potential ability to negotiate with the initiator of an unfriendly or unsolicited proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of them could result in an improvement of their terms.

Our amended and restated bylaws provide that special meetings of stockholders may be called only by the Chairman of our Board, or in the event the Chairman of our Board is unavailable, by the Chief Executive Officer or by the holders of a majority of the voting power of our Class B common stock, which is held by Cantor and CFGM.

We believe that the

benefits of increased protection give us the potential ability to negotiate with the initiator of an unfriendly or unsolicited proposal to acquire or restructure us and outweigh the disadvantages of discouraging those proposals because negotiation of them could result in an improvement of their terms.

Our bylaws provide that special meetings of stockholders may be called only by the Chairman of our Board, or in the event the Chairman of our Board is unavailable, by the Chief Executive Officer or by the holders of a majority of the voting power of our Class B common stock, which is held by Cantor.

In addition, our restated certificate of incorporation permits us to issue “blank check” preferred stock.

Our amended and restated bylaws require advance written notice prior to a meeting of our stockholders of a proposal or director nomination which a stockholder desires to present at such a meeting, which generally must be received by our Secretary not later than 120 days prior to the first anniversary of the date of our proxy statement for the preceding year’s annual meeting.

Our bylaws require advance written notice prior to a meeting of our stockholders of a proposal or director nomination which a stockholder desires to present at such a meeting, which generally must be received by our Secretary not later than 120 days prior to the first anniversary of the date of our proxy statement for the preceding year’s annual meeting.

In the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of the 120 th day prior to the date of such proxy statement or the tenth day following the day on which public announcement of the date of such meeting is first made by us.

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The requirement that this approval be obtained may prevent or delay transactions that would result in a change of control.

Further, our Equity Plan contains provisions pursuant to which grants that are unexercisable or unvested may automatically become exercisable or vested as of the date immediately prior to certain change of control events.

Further, our Equity Plan and certain of the awards under our Equity Plan contain provisions pursuant to which grants that are unexercisable or unvested may automatically become exercisable or vested as of the date immediately prior to certain change of control events.

Additionally, change in control and employment agreements between us and our named executive officers also provide for certain grants, payments, and grants of exchangeability, and exercisability in the event of certain change of control events.

The foregoing factors, as well as the significant common stock ownership by Cantor, including shares of our Class B common stock, and rights to acquire additional such shares, and the provisions of the indentures for our outstanding notes discussed above, could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for our Class A common stock, which, under certain circumstances, could reduce the market value of the Class A common stock.

The foregoing factors, as well as the significant common stock ownership by Cantor, including shares of our Class B common stock, and the provisions of any debt agreements, could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for our Class A common stock that could result in a premium over the market price for shares of Class A common stock.

The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.

S&P Dow Jones and FTSE Russell previously announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares of common stock from being added to such indices or limit their inclusion in them.

S&P Dow Jones Indices and FTSE Russell have previously excluded companies with multiple classes of shares of common stock from being added to their indices or limited their inclusion in them.

In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures.

As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure.

It is possible that the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure.

Any such exclusion from indices could result in a less active trading market for our Class A common stock.

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OpCo and BGC Global OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases.

We are a holding company with no direct operations and will be able to pay dividends, taxes and other expenses, and to make repurchases of shares our Class A common stock and purchases of BGC Holdings limited partnership interests or other equity interests in us or in our subsidiaries, only from our available cash on hand and funds received from distributions, loans or other payments, primarily from BGC U.S.

OpCo and BGC Global OpCo.

We are a holding company with no direct operations and will be able to pay dividends, taxes and other expenses, and to make repurchases of shares our Class A common stock or other equity interests in us or in our subsidiaries, only from our available cash on hand and funds received from distributions, loans or other payments, from our operating subsidiaries.

As discussed above, regulatory, tax restrictions or elections, and other legal or contractual restrictions may limit our ability to transfer funds freely from our subsidiaries.

In addition, any unanticipated accounting, tax or other charges against net income could adversely affect our ability to pay dividends and to make repurchases.

OpCo and BGC Global OpCo intend to distribute to their limited partners, including us, on a pro rata and quarterly basis, cash that is not required to meet BGC U.S.

OpCo’s and BGC Global OpCo’s anticipated business and regulatory needs.

As a result, BGC U.S.

OpCo’s and BGC Global OpCo’s ability, and in turn our ability, to pay dividends, taxes and indebtedness and other expenses and to make repurchases will depend upon the continuing profitability and strategic and operating needs of our business, including various capital adequacy and clearing capital requirements promulgated by federal, self-regulatory, and other authorities to which our subsidiaries are subject.

Traditionally, our dividend policy provides that we expect to pay a quarterly cash dividend to our common stockholders based on our post-tax Adjusted Earnings per fully diluted share.

Please see below for a detailed definition of post-tax Adjusted Earnings per fully diluted share.

Beginning in the first quarter of 2020, and for all of the quarterly periods following, the Board reduced the quarterly dividend to $0.01 per share out of an abundance of caution in order to strengthen the Company’s balance sheet as the global capital markets faced difficult and unprecedented macroeconomic conditions related to the global pandemic.

Additionally, during 2020, BGC Holdings, L.P.

reduced its distributions to or on behalf of its partners.

Historically, we were deeply dividend-centric;

going forward we plan to prioritize share and unit repurchases over dividends and distributions.

At present, we plan to prioritize share repurchases over dividends and distributions.

The Inflation Reduction Act of 2022 provides for a new U.S.

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Any dividends, if and when declared by our Board, will be paid on a quarterly basis.

The dividend to our common stockholders is expected to be calculated based on post-tax Adjusted Earnings allocated to us and generated over the fiscal quarter ending prior to the record date for the dividend.

No assurance can be made, however, that a dividend will be paid each quarter.

The declaration, payment, timing, and amount of any future dividends payable by us will be at the sole discretion of our Board.

With respect to any distributions which are declared, amounts paid to or on behalf of partners will at least cover their related tax payments.

Whether any given post-tax amount is equivalent to the amount received by a stockholder also on an after-tax basis depends upon stockholders’ and partners’ domiciles and tax status.

We are a holding company, with no direct operations, and therefore we are able to pay dividends only from our available cash on hand and funds received from distributions from BGC U.S.

OpCo and BGC Global OpCo.

Our ability to pay dividends may also be limited by regulatory considerations as well as by covenants contained in financing or other agreements.

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While we intend to declare and pay dividends quarterly, there can be no assurance that our Board will declare dividends at all or on a regular basis or that the amount of our dividends will not change.

Our Board and our Audit Committee have authorized repurchases of shares of BGC Class A common stock and purchases of BGC Holdings limited partnership interests or other equity interests in us or in subsidiaries, from Cantor, our executive officers, other employees, partners and others.

On November 4, 2022, the Company's Board and Audit Committee re-

authorized our share repurchase and unit redemption authorization to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

Our Board and our Audit Committee have authorized repurchases of shares of BGC Class A common stock or other equity interests in us or in subsidiaries, from Cantor, our executive officers, other employees, and others.

On July 3, 2023, the BGC Group Board and Audit Committee approved our share repurchase authorization in an amount up to $400.0 million, which may include purchases from Cantor, its partners or employees or other affiliated persons or entities.

As of December 31, 2023, we had approximately $333.1 million remaining under this authorization and may continue to actively make repurchases or purchases, or cease to make such repurchases or purchases, from time to time.

In addition, from time to time, we may reinvest all or a portion of the distributions we receive from BGC U.S.

OpCo and BGC Global OpCo in our business.

In addition, from time to time, we may reinvest all or a portion of the distributions we receive from our operating subsidiaries in our business.

Accordingly, there can be no assurance that future dividends will be paid or that dividend amounts will be maintained or that repurchases and purchases will be made at current or future levels.

If our dividend policy is materially different than the distribution policy of BGC Holdings, upon the exchange of any BGC Holdings limited partnership interests such BGC Holdings limited partners could receive a disproportionate interest in the aggregate distributions by BGC U.S.

OpCo and BGC Global OpCo that have not been distributed by us.

To the extent BGC Holdings distributes to its limited partners a greater share of that income that it receives from BGC U.S.

OpCo and BGC Global OpCo than we distribute to our stockholders, then as founding/working partners, limited partnership unit holders and/or Cantor exercise any exchange right to acquire our Class A common stock or Class B common stock, as applicable, exchanging partners may receive a disproportionate interest in the aggregate distributions by BGC U.S.

OpCo and BGC Global OpCo that have not been distributed by us.

The reason is that the exchanging partner could receive both (1) the benefit of the distribution that has not been distributed by us that we received from BGC U.S.

OpCo and BGC Global OpCo to BGC Holdings (in the form of a distribution by BGC Holdings to its limited partners) and (2) the benefit of the distribution from BGC U.S.

OpCo and BGC Global OpCo to us (in the form of a subsequent cash dividend paid by us, a greater percentage indirect interest in BGC U.S.

OpCo and BGC Global OpCo following a repurchase of BGC Class A common stock by us or a greater value of assets following a purchase of assets by us with the cash that otherwise would be distributed to our stockholders).

Consequently, if our dividend policy does not match the level of the distribution policy of BGC Holdings, other holders of BGC Class A common stock and BGC Class B common stock as of the date of an exchange could experience a reduction in their interest in the profits previously distributed by BGC U.S.

OpCo and BGC Global OpCo that have not been distributed by us.

Our current dividend policy could result in distributions to our common stockholders that are different from the distributions made by BGC Holdings to its unit holders.

If we or BGC Holdings were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business and structure as contemplated and could materially adversely affect our business, financial condition, results of operations, and prospects.

If we were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business.

Generally, an entity is deemed an “investment company” under Section 3(a)(1)(A) of the Investment Company Act if it is primarily engaged in the business of investing, reinvesting, or trading in securities, and is deemed an “investment company” under Section 3(a)(1)(C) of the Investment Company Act if it owns “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of U.S.

Government Securities and cash items) on an unconsolidated basis.

We believe that neither we nor BGC Holdings should be deemed an “investment company” as defined under Section 3(a)(1)(A) because neither of us is primarily engaged in the business of investing, reinvesting, or trading in securities.

Rather, through our operating subsidiaries, we and BGC Holdings are primarily engaged in the operation of various types of brokerage businesses as described in this report.

Neither we nor BGC Holdings is an “investment company” under Section 3(a)(1)(C) because more than 60% of the value of our total assets on an unconsolidated basis are interests in majority-owned subsidiaries that are not themselves “investment companies.” In particular, our BGC brokerage subsidiaries are entitled to rely on, among other things, the broker-dealer/market intermediary exemption in Section 3(c)(2) of the Investment Company Act.

To ensure that we and BGC Holdings are not deemed “investment companies” under the Investment Company Act, we need to be primarily engaged, directly or indirectly, in the non-investment company business of our operating subsidiaries.

If we were to cease participation in the management of BGC Holdings, if BGC Holdings, in turn, were to cease participation in the management of the BGC OpCos, or if the BGC OpCos, in turn, were to cease participation in the management of our BGC operating subsidiaries, that would increase the possibility that we and BGC Holdings could be deemed “investment companies.” Further, if we were deemed not to have a majority of the voting power of BGC Holdings (including through our ownership of the Special Voting Limited Partnership Interest), if BGC Holdings, in turn, were deemed not to have a majority of the voting power of the BGC OpCos (including through its ownership of Special Voting Limited Partnership Interests), or if the BGC OpCos, in turn, were deemed not to have a majority of the voting power of our BGC operating subsidiaries, that would increase the possibility that we and BGC Holdings could be deemed “investment companies,” our interests in BGC Holdings and the BGC OpCos could be deemed “investment securities,” and we and BGC Holdings could be deemed “investment companies.”

We expect to take all legally permissible action to ensure that we and BGC Holdings are not deemed investment companies under the Investment Company Act, but no assurance can be given that this will not occur.

We believe that we should not be deemed an “investment company” as defined under Section 3(a)(1)(A) because we are not primarily engaged in the business of investing, reinvesting, or trading in securities.

Rather, through our operating subsidiaries, we are primarily engaged in the operation of various types of brokerage businesses as described in this Annual Report on Form 10-K.

We are not an “investment company” under Section 3(a)(1)(C) because more than 60% of the value of our total assets on an unconsolidated basis are interests in majority-owned subsidiaries that are not themselves “investment companies.” In particular, our brokerage subsidiaries are entitled to rely on, among other things, the broker-dealer/market intermediary exemption in Section 3(c)(2) of the Investment Company Act.

To ensure that we are not deemed an “investment company” under the Investment Company Act, we need to be primarily engaged, directly or indirectly, in the non-investment company businesses of our operating subsidiaries.

If we were to cease participation in the management of our operating subsidiaries, that would increase the possibility that we could be deemed an “investment company.” Further, if we were deemed not to have a majority of the voting power of our operating subsidiaries, that would increase the possibility that we could be deemed an “investment company,” our interests in our operating subsidiaries could be deemed “investment securities,” and we could be deemed an “investment company.”

We expect to take all legally permissible action to ensure that we are not deemed an investment company under the Investment Company Act, but no assurance can be given that this will not occur.

The Investment Company Act and the rules thereunder contain detailed prescriptions for the organization and operations of investment companies.

Among other things, the Investment Company Act and the rules thereunder limit or prohibit transactions with affiliates, limit the issuance of debt and equity securities, prohibit the issuance of stock options, and impose certain governance requirements.

If anything were to happen that would cause us or BGC Holdings to be deemed to be an “investment company” under the Investment Company Act, the Investment Company Act would limit our or its capital structure, ability to transact business with affiliates (including Cantor, BGC Holdings or the BGC OpCos as the case may be), and ability to compensate key employees.

Therefore, if we or BGC Holdings became subject to the Investment Company Act, it could make it impractical to continue our business in this structure, impair agreements and arrangements, and impair the transactions contemplated by those agreements and arrangements, between and among us, BGC Holdings and the BGC OpCos, or any combination thereof, and materially adversely affect our business, financial condition, results of operations, and prospects.

Risks Related to Our Partnership and Equity-Based Compensation Structure

Our equity-based compensation structure may adversely affect our ability to recruit, retain, compensate and motivate some employee partners.

While we believe that our emphasis on equity-based compensation promotes recruitment, motivation of our brokers and other employees and alignment of interest with stockholders, such employee may be more attracted to the benefits of working at a privately controlled partnership, or at a public company with a different compensation structure than our own, which may adversely affect our ability to recruit, retain, compensate and motivate these persons.

While BGC Holdings limited partnership interests entitle founding/working and other limited partners to participate in distributions of income from the operations of our business, upon leaving BGC Holdings (or upon any other purchase of such limited partnership interests, as described below), any such founding/working or other limited partners are, unless Cantor, in the case of the founding partners, and us, as the general partner of BGC Holdings, otherwise determine, only entitled to receive over time, and provided he or she does not violate certain partner obligations, an amount for his or her BGC Holdings limited partnership interests that reflects such partner’s capital account or post-termination amount, if any, and not any goodwill or going concern value of our businesses.

Further, certain partner units have no right to a post-termination payment, receive a preferred but fixed distribution amount, and/or cannot be made exchangeable into shares of our Class A common stock.

Moreover, unless and until units are made exchangeable, limited partners have no unilateral right to exchange their BGC Holdings limited partnership interests for shares of BGC Class A common stock.

The BGC Holdings limited partnership interests are also subject to redemption, and subject founding/working and other limited partners to non-competition and non-solicitation covenants, as well as other obligations.

In addition, the exercise of Cantor’s right to purchase from BGC Holdings exchangeable limited partnership interests generally when FPUs are redeemed or granted exchangeability will result in the share of distributions of income from the operations of our business on other outstanding BGC Holdings limited partnership interests, including those held by founding/working and other limited partners, to remain the same rather than increasing as would be the case if such interests were redeemed or granted exchangeability without such Cantor right to purchase.

In addition, any purchase of exchangeable limited partnership units by Cantor from BGC Holdings following Cantor’s decision to grant exchangeability on FPUs will result in additional dilution to the other partners of BGC Holdings.

The terms of the BGC Holdings limited partnership interests held by founding/working and limited partners also provide for the following:

• such units are not entitled to reinvest the distributions on their BGC Holdings limited partnership interests in additional BGC Holdings limited partnership interests at preferential or historical prices or at all;

• Cantor is entitled to receive any amounts from selected extraordinary transactions that are withheld from distributions to certain partners and forfeited by partners leaving BGC Holdings prior to their interests in such withheld distributions fully vesting, rather than any such forfeited amounts accruing to the benefit of all BGC Holdings limited partners on a pro rata basis.

In addition, the ability to acquire shares of our Class A common stock underlying BGC Holdings exchangeable units is not dependent upon the partner’s continued employment with us or compliance with partner obligations, and such partners are therefore not restricted from leaving us by the potential loss of such shares.

On November 15, 2022, we and BGC Holdings, along with certain other entities, entered into the Corporate Conversion Agreement in order to reorganize and simplify our organizational structure through the Corporate Conversion Transactions.

There is no assurance that the equity compensation-based retention and motivation features of our new structure will be as effective as those of our current partnership structure.

We may be required to pay Cantor for a significant portion of the tax benefit, if any, relating to any additional tax depreciation or amortization deductions we claim as a result of any step up in the tax basis of the assets of BGC U.S.

OpCo or BGC Global OpCo resulting from Cantor’s exchanges of interests in BGC Holdings (together with, prior to the Spin-Off, interests in Newmark Holdings) for our common stock.

Certain partnership interests in BGC Holdings may be exchanged for shares of BGC Partners common stock.

In the vast majority of cases, the partnership units that become exchangeable for shares of BGC common stock are units that have been granted as compensation, and, therefore, the exchange of such units will not result in an increase in BGC’s share of the tax basis of the tangible and intangible assets of BGC U.S.

OpCo, BGC Global OpCo and/or Newmark OpCo.

However, exchanges of other partnership units – including non-tax-free exchanges of units by Cantor – could result in an increase in the tax basis of such tangible and intangible assets that otherwise would not have been available, although the IRS may challenge all or part of that tax basis increase, and a court could sustain such a challenge by the IRS.

These increases in tax basis, if sustained, may reduce the amount of tax that BGC would otherwise be required to pay in the future.

In such circumstances, the tax receivable agreement that BGC entered into with Cantor provides for the payment by BGC to Cantor of 85% of the amount of cash savings, if any, in the U.S.

federal, state and local income tax or franchise tax that BGC actually realizes as a result of these increases in tax basis and certain other tax benefits related to its entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement.

It is expected that BGC will benefit from the remaining 15% cash savings, if any, in income tax that we realize.

Risks Related to the Corporate Conversion

If anything were to happen that would cause us to be deemed to be an “investment company” under the Investment Company Act, the Investment Company Act would limit our or its capital structure, ability to transact business with affiliates, and ability to compensate key employees.

Therefore, if we became subject to the Investment Company Act, it could make it impractical to continue our business in this structure, impair agreements and arrangements, and impair the transactions contemplated by those agreements and arrangements, between and among us and our operating subsidiaries, or any combination thereof, and materially adversely affect our business, financial condition, results of operations, and prospects.

The expected benefits of the Corporate Conversion may not be obtained.

The Corporate Conversion is being undertaken in order to simplify the corporate structure of our business.

We believe that, following the Corporate Conversion Transactions, the organizational structure of the BGC businesses will be more comprehensible to the marketplace, which may, in turn, increase demand for our shares and assist in the goal of maximizing long-term stockholder value.

By simplifying the organizational structure, the Corporate Conversion is also intended to improve stockholder value by reducing administrative costs and increasing the efficiency of our regulated businesses and associated capital requirements.

However, it is possible that these expected benefits are not achieved.

There can be no assurance that (i) our brokers and other employees, the rating agencies, our lenders, our bondholders, our investors, our counterparties, our clients, or others will view our new structure favorably, (ii) that the new structure will have the expected retentive effect on said employees or (iii) that the new structure will have the expected impact on our GAAP or non-GAAP results, cash position, cash or non-cash accounting charges, tax rate, or other factors.

Furthermore, the Corporate Conversion Transactions will involve significant time, expense and management attention.

On July 1, 2023, we completed our Corporate Conversion to a Full C Corporation in order to simplify the corporate structure of our business.

We believe that, following the Corporate Conversion Transactions, the organizational structure of the BGC businesses has become more comprehensible to the marketplace, which may, in turn, increase demand for our shares and assist in the goal of maximizing long-term stockholder value.

By simplifying the organizational structure, the Corporate Conversion may improve stockholder value by reducing administrative costs and increasing the efficiency of our regulated businesses and associated capital requirements.

However, it is possible that these expected benefits will not be achieved.

There can be no assurance that our brokers and other employees, the rating agencies, our lenders, our bondholders, our investors, our counterparties, our clients, or others will view our new structure favorably, or that the new structure will have the expected impact on our GAAP or non-GAAP results, cash position, cash or non-cash accounting charges, tax rate, or other factors.

Any of these factors or others could negatively affect our business, financial condition, results of operations and prospects.

Our equity-based compensation structure will be different following the Corporate Conversion because all of our equity-based compensation will be issued by BGC Group, Inc.

This change in equity-based compensation structure could adversely affect our ability to recruit, retain, compensate and motivate some of its employees.

Currently, certain of our employees receive equity-based compensation at BGC Holdings, which is taxed as a partnership for U.S.

federal income tax purposes and provides for distributions of income from the operations of our businesses.

Following the closing of the Corporate Conversion Transactions, our employees will receive equity-based compensation at BGC Group, Inc., the new public entity.

Some of our employees may be more attracted to the benefits of being compensated at a privately controlled partnership, and the change in structure could adversely affect our ability to recruit, retain, compensate and motivate these persons.

In addition, the equity-based compensation structure following the Corporate Conversion will no longer have certain other benefits of BGC Holding’s partnership structure, including certain duties owed by, and post-employment restrictive covenants applicable to, the limited partners in BGC Holdings.

We are currently controlled by Cantor, but the Corporate Conversion will have the effect of increasing the percentage of voting power held by Cantor as a result of the issuance of BGC Group, Inc.

Class B common stock in exchange for the BGC Holdings exchangeable units held by Cantor.

The increase in voting power held by Cantor could result in Cantor exercising control over BGC Group, Inc.

for a longer period of time than it would over us absent the Corporate Conversion.

As of December 31, 2022, Cantor (including its general partner) beneficially owned 45.9 million shares of our Class B common stock, representing approximately 58.5% of the total voting power of our common stock.

In addition, as of December 31, 2022, Cantor (including its general partner) beneficially owned 57.6 million units of exchangeable limited partnership interests in BGC Holdings.

If Cantor (including its general partner) were to exchange all of such units into our common stock

absent the Corporate Conversion, it would receive 23.6 million shares of our Class B common stock and 34.0 million shares of our Class A common stock.

These shares, when taken together with Cantor’s existing shares of our Class B common stock, would represent approximately 69.1% of the total voting power of our common stock as of December 31, 2022 following such exchange.

As a result of the Corporate Conversion, each share of our Class B common stock held by Cantor (including its general partner) will be converted into one share of our Class B common stock, and each unit of exchangeable limited partnership interests in BGC Holdings held by Cantor (including its general partner) will also be converted into one share of our Class B common stock.

In addition, in connection with the Corporate Conversion Transactions, it is expected that Cantor will exercise certain purchase rights set forth in the BGC Holdings limited partnership agreement and as contemplated in the Corporate Conversion Agreement, resulting in the acquisition by Cantor of an additional approximately 6.8 million of exchangeable limited partnership units that will be converted in the Corporate Conversion Transactions as set forth in the Corporate Conversion Agreement.

Therefore, following the Corporate Conversion, Cantor (including its general partner) is expected to beneficially own approximately 110 million shares of our Class B common stock, which as of December 31, 2022 is expected to represent approximately 74.6% of the total voting power of our common stock.

Cantor’s voting power over BGC Group, Inc.

as of immediately following the Corporate Conversion will therefore be approximately 5.5 percentage points higher than its voting power over BGC Partners would be if Cantor had exchanged its exchangeable limited partnership interests in BGC Holdings for our common stock absent the Corporate Conversion.

This increase in percentage voting power could result in Cantor exercising control over BGC Group, Inc.

for a longer period of time than it would over us absent the Corporate Conversion.

The ability of Cantor and Howard W.

Lutnick (indirectly through his control of Cantor) to exercise control over BGC Group, Inc.

could create or appear to create potential conflicts of interest.

Conflicts of interest may arise between BGC Group, Inc.

and Cantor in a number of areas relating to past and ongoing relationships, including:

• potential acquisitions and dispositions of businesses;

• the issuance, acquisition or disposition of securities by BGC Group, Inc.;

• the election of new or additional directors to the BGC Group, Inc.

board of directors;

• the payment of dividends by BGC Group, Inc.

(if any) and repurchases of shares of BGC Group, Inc.

Class A common stock;

• any loans to or from BGC Group, Inc.

• business operations or business opportunities of BGC Group, Inc.

and Cantor that would compete with the other party’s business opportunities, including Cantor’s and BGC Partners’ brokerage and financial services;

• intellectual property matters;

• business combinations involving BGC Group, Inc.;

• competition between BGC Group, Inc.’s and Cantor’s other businesses.

Under the terms of the Corporate Conversion agreement, a portion of the BGC Group, Inc.

Class B common stock that will be received by Cantor in the Corporate Conversion is subject to potential conversion into BGC Group, Inc.

Class A common stock if BGC Group, Inc.

does not issue shares of BGC Group, Inc.

common stock with an aggregate value of at least $75,000,000 (with the value of each issuance calculated based on the closing market price of BGC Group, Inc.

common stock on the date of issuance), after the closing of the Corporate Conversion and on or prior to the seventh anniversary of the closing of the Corporate Conversion, in connection with mergers, acquisitions and business combinations undertaken by BGC Group, Inc.

or any of its subsidiaries.

If BGC Group, Inc.

does not issue at least such amount of shares in such circumstances during such seven-year period, then approximately 40.4 million shares of BGC Group, Inc.

Class B common stock held by Cantor will be converted into an equivalent number of BGC Group, Inc.

Class A common stock at the end of such seven-year period (provided that such number will be decreased to the extent that Cantor has sold or transferred any BGC Group, Inc.

Class B common stock to a third party and converted such shares into BGC Group, Inc.

Class A common stock during such seven-year period).

Delay in completing the Corporate Conversion Transactions could negatively impact the market price of shares of our Class A common stock and financial results of our business.

The completion of the Corporate Conversion Transactions is subject to certain closing conditions, including (i) the adoption of the Corporate Conversion Agreement by the requisite approval of our stockholders, (ii) the absence of any governmental injunction or order prohibiting the consummation of any merger or the other transactions contemplated by the Corporate Conversion Agreement, (iii) the BGC Group, Inc.

Class A common stock issuable in connection with the Corporate Conversion Transactions having been approved for listing on the Nasdaq Global Select Market, subject to official notice of

issuance, (iv) the effectiveness of the registration statement to be filed with the SEC on Form S-4 in connection with the Corporate Conversion Transactions, (v) the accuracy of each party’s respective representations and warranties, generally subject to a material adverse effect qualification, (vi) the performance by the parties of their respective obligations under the Corporate Conversion Agreement in all material respects, (vii) our receipt of a legal opinion as to the tax treatment of the Corporate Conversion Transactions, and (viii) Cantor’s receipt of a legal opinion as to the tax treatment of the Corporate Conversion Transactions.

In addition, each of Cantor and us have the right to terminate the Corporate Conversion Agreement if certain tax legislation is proposed or enacted that, if implemented, could materially increase the taxes directly or indirectly borne by the partners of Cantor or BGC Holdings or our stockholders (including, without limitation, as a result of an increase in the corporate income tax rate or as a result of an increase in the dividend tax rate) if the Corporate Conversion Transactions were completed versus if they were not.

Any of these factors or others could delay the completion of the Corporate Conversion which may in turn negatively affect our business and impact the market price of share of our Class A common stock if such delay is not promptly remedied.

Changes to our equity-based compensation structure as a result of the Corporate Conversion may adversely affect our ability to recruit, retain, compensate and motivate some employees.

While we believe that our emphasis on equity-based compensation promotes recruitment, motivation of our brokers and other employees and alignment of interest with stockholders, such employee may be more attracted to the benefits of working at a public company with a different compensation structure than our own, which may adversely affect our ability to recruit, retain, compensate and motivate these persons.

Following the Corporate Conversion, our employees now receive equity-based compensation at BGC Group, the new public entity.

In addition, the equity-based compensation structure following the Corporate Conversion no longer has certain other benefits of BGC Holding’s partnership structure, including certain duties that were owed by, and post-employment restrictive covenants that were applicable to, the limited partners in BGC Holdings.

RISKS RELATED TO OUR RELATIONSHIP WITH CANTOR AND ITS AFFILIATES

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Cantor, and Mr.

Lutnick, indirectly through his control of Cantor, are each able to exercise control over our management and affairs and all matters requiring stockholder approval, including the election of our directors and determinations with respect to acquisitions and dispositions, as well as material expansions or contractions of our business, entry into new lines of businesses and borrowings and issuances of our Class A common stock and Class B common stock or other securities.

Lutnick, indirectly through his control of Cantor, are each able to exercise control over our management and affairs and all matters requiring stockholder approval, including the election of our directors and determinations with respect to acquisitions and dispositions, as well as material expansions or contractions of our business, entry into new lines of business and borrowings and issuances of our Class A common stock and Class B common stock or other securities.

This control is subject to the approval of our Audit Committee on those matters requiring such approval.

Cantor’s voting power may also have the effect of delaying or preventing a change of control of us.

Following the Corporate Conversion, Cantor’s beneficial ownership increased as a result of the Corporate Conversion Transactions, including its exchange of its BGC Holdings limited partnership units into our Class B common stock.

As of December 31, 2023, Mr.

Lutnick and individuals related to Mr.

Lutnick owned 13.1 million shares of our outstanding Class B common stock, representing 12.0% of the outstanding shares of BGC Class B common stock and approximately 8.9% of our total voting power.

Together, Cantor, CFGM, Mr.

Lutnick and individuals related to Mr.

Lutnick own 100% of the outstanding shares of BGC Class B common stock and approximately 73.7% of our total voting power.

Cantor’s and Mr.

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• the election of new or additional directors to our Board;

• the payment of dividends by us (if any), distribution of profits by BGC U.S.

OpCo, BGC Global OpCo and/or BGC Holdings and repurchases of shares of our Class A common stock or purchases of BGC Holdings limited partnership interests or other equity interests in our subsidiaries, including from Cantor, our executive officers, other employees, partners, and others;

• the payment of dividends by us (if any), and repurchases of shares of our Class A common stock or other equity interests in our subsidiaries, including from Cantor, our executive officers, other employees, and others;

• any loans to or from us or Cantor, or any financings or credit arrangements that relate to or depend on our relationship with Cantor or its relationship with us;

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• provision of clearing capital pursuant to the Clearing Agreement and potential and existing loan arrangements.

Potential conflicts of interest could also arise if we decide to enter into any new commercial arrangements with Cantor in the future or in connection with Cantor’s desire to enter into new commercial arrangements with third parties.

We also expect Cantor to manage its ownership of us so that it will not be deemed to be an investment company under the Investment Company Act, including by maintaining its voting power in us above a majority absent an applicable exemption from the Investment Company Act.

This may result in conflicts with us, including those relating to acquisitions or offerings by

us involving issuances of shares of our Class A common stock, or securities convertible or exchangeable into shares of our Class A common stock, which would dilute Cantor’s voting power in us.

This may result in conflicts with us, including those relating to acquisitions or offerings by us involving issuances of shares of our Class A common stock, or securities convertible or exchangeable into shares of our Class A common stock, which would dilute Cantor’s voting power in us.

See “–General Risks—If we or Newmark Holdings were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business.”

In addition, Cantor has from time to time in the past and may in the future consider possible strategic realignments of its own business and/or of the relationships that exist between and among Cantor and its other affiliates and us.

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There is no assurance that such consolidation or restructuring would not result in a material expense or disruption to our business.

Moreover, the service of officers or partners of Cantor as our executive officers and directors, and those persons’ ownership interests in and payments from Cantor and its affiliates, SPACs and similar investments or other entities, could create conflicts of interest when we and those directors or executive officers are faced with decisions that could have different implications for us and Cantor.

Our ability to retain our key employees and the ability of certain key employees to devote adequate time and attention to us are critical to the success of our business, and failure to do so may adversely affect our business, financial condition, results of operations and prospects.

Our agreements and other arrangements with Cantor may be amended upon agreement of the parties to those agreements upon approval of our Audit Committee.

During the time that we are controlled by Cantor, Cantor may be able to require us to agree to amendments to these agreements.

We may not be able to resolve any potential conflicts, and, even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party.

In order to address potential conflicts of interest between Cantor and its representatives and us, our restated certificate of incorporation contains provisions regulating and defining the conduct of our affairs as they may involve Cantor and its representatives, and our powers, rights, duties and liabilities and those of our representatives in connection with our relationship with Cantor and its affiliates, officers, directors, general partners or employees.

Our restated certificate of incorporation provides that no Cantor Company, as defined in our restated certificate of incorporation, or any of the representatives, as defined in our restated certificate of incorporation, of a Cantor Company will owe any fiduciary duty to, nor will any Cantor Company or any of their respective representatives be liable for breach of fiduciary duty to, us or any of our stockholders, including with respect to corporate opportunities.

The ability of certain key employees to devote adequate time and attention to us are critical to the success of our business, and failure to do so may adversely affect our business, financial condition, results of operations and prospects.

Our agreements and other arrangements with Newmark and Cantor may be amended upon agreement of the parties to those agreements and approval of our Audit Committee.

We may not be able to resolve potential conflicts, and, even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party.

To address potential conflicts of interest between Cantor and its representatives and us, our restated certificate of incorporation contains provisions regulating and defining the conduct of our affairs as they may involve Cantor and its representatives, and our powers, rights, duties and liabilities and those of our representatives in connection with our relationship with Cantor and its affiliates, officers, directors, general partners or employees.

including with respect to corporate opportunities.

In addition, Cantor and its respective representatives have no duty to refrain from engaging in the same or similar activities or lines of business as us or doing business with any of our customers.

The corporate opportunity policy that is included in our restated certificate of incorporation is designed to resolve potential conflicts of interest between us and Cantor and its representatives.

If any Cantor Company or any its representatives acquires knowledge of a potential transaction or matter that may be a corporate opportunity (as defined in our restated certificate of incorporation) for any such person, on the one hand, and us or any of our representatives, on the other hand, such person will have no duty to communicate or offer such corporate opportunity to us or any of our representatives, and will not be liable to us, any of our stockholders or any of our representatives for breach of any fiduciary duty by reason of the fact that they pursue or acquire such corporate opportunity for themselves, direct such corporate opportunity to another person or do not present such corporate opportunity us or any of our representatives, subject to the requirement described in the following sentence.

If any Cantor Company or any its representatives acquires knowledge of a potential transaction or matter that may be a corporate opportunity (as defined in our restated certificate of incorporation) for any such person, on the one hand, and us or any of our representatives, on the other hand, such person will have no duty to communicate or offer such corporate opportunity to us or any of our representatives, and will not be liable to us, any of our stockholders or any of our representatives for breach of any fiduciary duty by reason of the fact that they pursue or acquire such corporate opportunity for themselves, direct such corporate opportunity to another person or do not present such corporate opportunity to us or any of our representatives, subject to the requirement described in the following sentence.

If a third party presents a corporate opportunity to a person who is both our representative and a representative of a Cantor Company, expressly and solely in such person’s capacity as our representative, and such person acts in good faith in a manner consistent with the policy that such corporate opportunity belongs to us, then such person will be deemed to have fully satisfied and fulfilled any fiduciary duty that such person has to us as our representative with respect to such corporate opportunity, provided that any Cantor Company or any of its representatives may pursue such corporate opportunity if we decide not to pursue such corporate opportunity.

The BGC Holdings limited partnership agreement contains similar provisions with respect to us and/or Cantor and each of our respective representatives, and the BGC U.S.

OpCo and BGC Global OpCo limited partnership agreements, contain similar provisions with respect to us and/or BGC Holdings and each of our respective representatives.

This policy, however, could make it easier for Cantor to compete with us.

This policy, could make it easier for Cantor to compete with us.

If Cantor competes with us, it could materially harm our business, financial condition, results of operations and prospects.

Agreements between us and Cantor are between related parties, and the terms of these agreements may be less favorable to us than those that we could have negotiated with third parties and may subject us to litigation.

Our relationship with Cantor results in agreements with Cantor that are between related parties.

As a result, the prices charged to us or by us for services provided under agreements with Cantor or sales or purchases of assets or other similar transactions may be higher or lower than prices that may be charged by third parties, and the terms of these agreements may be less favorable to us than those that we could have negotiated with third parties.

In addition, Cantor has an unlimited right to

internally use market data from us without any cost.

Any related-party transactions or arrangements between us and Cantor are subject to the prior approval by our Audit Committee, but generally do not otherwise require the separate approval of our stockholders, and if such stockholder approval were required, Cantor may retain sufficient voting power to provide any such requisite approval without the affirmative consent of the other stockholders.

Agreements between us and Cantor and/or its affiliates are between related parties, and the terms of these agreements may be less favorable to us than those that we could negotiate with third parties and may subject us to litigation.

Our relationship with Cantor and/or its affiliates may result in agreements with Cantor and/or its affiliates that are between related parties.

For example, we provide to and receive from Cantor an/or its affiliates various administrative services, including investment banking services.

As a result, the prices charged to us or by us for services provided under any agreements with such entities may be higher or lower than prices that may be charged by third parties, and the terms of these agreements may be less favorable to us than those that we could have negotiated with third parties.

In addition, Cantor has an unlimited right to internally use market data from us without any cost.

Any related-party transactions or arrangements between us and such parties is subject to the prior approval by our Audit Committee, but generally do not otherwise require the separate approval of our stockholders, and if such stockholder approval were required, Cantor may retain sufficient voting power to provide any such requisite approval without the affirmative consent of the other stockholders.

These related-party relationships may from time to time subject us to litigation.

For example, a derivative action was filed the Delaware Chancery Court on October 5, 2018 alleging the Berkeley Point Acquisition and our investment in Real Estate L.P.

(the “Berkeley Transaction”) were unfair to us.

On August 19, 2022, the Court issued a post-trial memorandum opinion in favor of BGC, its directors, and controlling stockholders, ruling that the Berkeley Transaction was entirely fair to BGC’s stockholders with respect to both process and price.

While the Company believes any appeal of the Court's final judgement would be without merit and will continue to defend the case vigorously, as in any litigated matter, the outcome cannot be determined with certainty.

We are controlled by Cantor, which in turn controls its wholly owned subsidiary, CF&Co, which has acted and may continue to act as our sales agent in our CEO program from time to time and provides us with additional investment banking services.

In addition, other affiliates of Cantor may provide us with advice and services from time to time.

We are controlled by Cantor, which in turn controls its wholly owned subsidiary, CF&Co, which acts as our sales agent in our CEO program is entitled to receive fees in connection therewith.

We may enter into similar agreements in the future.

In addition, Cantor, CF&Co and their affiliates have provided investment banking services to us and our affiliates in the past, and may be expected to do so in the future, including acting as our financial advisor in connection with business combinations, dispositions, or other transactions, including the acquisition of GFI and the disposition of the Insurance brokerage business, and placing or recommending to us various investments, stock loans or cash management vehicles.

They receive customary fees and commissions for these services in accordance with our investment banking engagement letter with CF&Co.

They may also receive brokerage and market data and analytics products and services from us and our respective affiliates.

From time to time, CF&Co may make a market in our notes.

We also provide to and receive from Cantor and its affiliates various administrative services.

For example, on February 16, 2024, an alleged Company shareholder, Martin J.

Siegel, filed a putative class action lawsuit against Cantor Fitzgerald, LP and Howard W.

Lutnick in the Delaware Court of Chancery, asserting that the Corporate Conversion was unfair to Class A shareholders of BGC Partners, Inc.

because it increased Cantor’s percentage voting control over the Company.

The suit is captioned Martin J.

Cantor Fitzgerald, LP, C.A.

2024-0146-LWW.

While the lawsuit is in its early stages and does not name the Company as a party, the Company believes the action lacks merit.

RISKS RELATED TO OUR CLASS A COMMON STOCK

Purchasers of our Class A common stock, as well as existing stockholders, may experience significant dilution as a result of offerings of shares of our Class A common stock, which may occur from time to time through our CEO Program or otherwise, as well as other potential forms of employee share monetization, including issuance of shares to employees and partners which may be sold through broker transactions.

Our management will have broad discretion as to the timing and amount of sales of our Class A common stock, as well as the application of the net proceeds of any such sales.

We have an effective registration statement on Form S-3 filed on March 8, 2021, with respect to the offer and sale of up to 300.0 million shares of BGC Class A common stock from time to time on a delayed or continuous basis pursuant to a CEO program.

As we have done in the past, on August 12, 2022 we entered into a Controlled Equity Offering SM sales agreement with CF&Co to assist us with partner and employee sales of shares of Class A common stock, which may occur from time to time, as well as other potential forms of employee share monetization including issuance of shares to employees and partners which may be sold through broker transactions.

Purchasers of our Class A common stock, as well as existing stockholders, may experience significant dilution as a result of offerings of shares of our Class A common stock by us, and the perception that such sales could occur may adversely affect prevailing market prices for our stock.

We have an effective registration statement on Form S-3 filed and a Controlled Equity Offering SM sales agreement with CF&Co with respect to the offer and sale of up to 300.0 million shares of BGC Class A common stock from time to time on a delayed or continuous basis pursuant to a CEO program.

As of December 31, 2023, we have not issued any shares of BGC Class A common stock under the current CEO Program.

We have an effective registration statement on Form S-4 filed on September 3, 2010 (the “2010 Form S-4 Registration Statement”), with respect to the offer and sale of up to 20 million shares of BGC Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities.

We also have an effective registration statement on Form S-4 with respect to the offer and sale of up to 20 million shares of BGC Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities.

As of December 31, 2023, we have issued an aggregate of 2.3 million shares of BGC Class A common stock under the 2019 Form S-4 Registration Statement.

Additionally, on September 13, 2019, we filed a registration statement on Form S-4 (the “2019 Form S-4 Registration Statement”), with respect to the offer and sale of up to 20 million shares of BGC Class A common stock from time to time in connection with business combination transactions, including acquisitions of other businesses, assets, properties or securities.

As of December 31, 2022, we have not issued any shares of BGC Class A common stock under the 2019 Form S-4 Registration Statement.

We also have an effective shelf Registration Statement on Form S-3 pursuant to which we can offer and sell up to 10 million shares of BGC Class A common stock under the BGC Partners, Inc.

Dividend Reinvestment and Stock Purchase Plan.

As of December 31, 2022, we have issued 0.8 million shares of BGC Class A common stock under the Dividend Reinvestment and Stock Purchase Plan.

We have filed a number of registration statements on Form

S-8 pursuant to which we have registered the shares underlying our Equity Plan.

We also have an effective shelf Registration Statement on Form S-3 pursuant to which we can offer and sell up to 10 million shares of BGC Class A common stock under the BGC Group, Inc.

As of December 31, 2023, we have issued 0.8 million shares of BGC Class A common stock under the DRIP.

We have filed a number of registration statements on Form S-8 pursuant to which we have registered the shares underlying our Equity Plan.

As of December 31, 2023, there were 476.6 million shares remaining for sale under such registration statements.

Because future sales of our Class A common stock may be made in the markets at prevailing market prices or at prices related to such prevailing market prices, the prices at which these shares have been sold and may be sold in the future will vary, and these variations may be significant.

Purchasers of these shares may suffer significant dilution if the price they pay is higher than the price paid by other purchasers of shares of our Class A common stock in any future offerings of shares of our Class A common stock.

Our management will have broad discretion as to the timing and amount of sales of our Class A common stock in any offering, as well as application of the net proceeds of any such sale.

Our management will have broad discretion as to the timing and amount of sales of our Class A common stock in any offering by us, as well as the application of the net proceeds of any such sale.

Accordingly, purchasers in any such offering will be relying on the judgment of our management with regard to the use of such net proceeds, and purchasers will not have the opportunity, as part of their investment decision, to assess whether the proceeds are being used appropriately.

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Sales of substantial amounts of our Class A common stock, or the perception that such sales could occur, could dilute existing holders of our Class A common stock and may adversely affect prevailing market prices for our Class A common stock.

In addition, the sale by us of any shares of our Class A common stock may decrease our existing Class A common stockholders’ proportionate ownership interest in us, reduce the amount of cash available per share for dividends payable on shares of our Class A common stock and diminish the relative voting strength of each previously outstanding share of our Class A common stock.

Because we may use the net proceeds from future offerings of our Class A common stock, for general corporate purposes, which, among other things, may include repurchases of shares of our Class A common stock and purchases of BGC Holdings units or other equity interests in us or in our subsidiaries from Cantor, our executive officers, other employees, partners, and others, and/or to replace cash used to effect such repurchases and purchases, investors should be aware that such net proceeds may not be available for other corporate purposes, and that, depending upon the timing and prices of such repurchases of shares and purchases of units and of the sales of our shares in future offerings and the liquidity and depth of our market, we may sell a greater aggregate number of shares, at a lower average price per share in future offerings than the number of shares or units repurchased or purchased, thereby increasing the aggregate number of shares and units outstanding and potentially decreasing our EPS.

In the event that we sell our Class A common stock, we may use the net proceeds from any future offering, for general corporate purposes, which among other things, may include repurchases of shares of our Class A common stock and purchases of BGC Holdings units or other equity interests in us or in our subsidiaries, from Cantor, our executive officers, other employees, partners, and others, and/or to replace cash used to effect such repurchases and purchases.

In addition, the sale by us of any shares of our Class A common stock will decrease our existing Class A common stockholders’ proportionate ownership interest in us, reduce the amount of cash available per share for dividends payable on shares of our Class A common stock and diminish the relative voting strength of each previously outstanding share of our Class A common stock.

We may use the net proceeds from future offerings of our Class A common stock to repurchase shares from Cantor, our executive officers, other employees and others, which may render the proceeds unavailable for other purposes.

Because we may use the net proceeds from future offerings of our Class A common stock, including pursuant to our CEO program for general corporate purposes, which, among other things, may include repurchases of shares of our Class A common stock or other equity interests in us or in our subsidiaries from Cantor, our executive officers, other employees, and others, and/or to replace cash used to effect such repurchases and purchases, investors should be aware that such net proceeds may not be available for other corporate purposes.

Depending upon the timing and prices of such repurchases of shares and of the sales of our shares in future offerings and the liquidity and depth of our market, we may sell a greater aggregate number of shares, at a lower average price per share in future offerings than the number of shares repurchased or purchased, thereby increasing the aggregate number of shares outstanding and potentially decreasing our EPS.

From January 1, 2023 to December 31, 2023, we repurchased an aggregate of 23.3 million shares of our Class A common stock at an aggregate purchase price of approximately $114.5 million, with a weighted-average repurchase price of $4.93 per share.

During that period, we redeemed for cash an aggregate of 1.3 million limited partnership units at a weighted-average price of $3.87 per unit and an aggregate of 0.1 million founding/working partner units at a weighted-average price of $3.41 per unit.

In the future, we may continue to repurchase shares of our Class A common stock and purchase partnership units from Cantor, our executive officers, other employees, partners, and others, and these repurchases and purchases may be significant.

While we believe that we can successfully manage our issuance and repurchase strategy, and that our share price may in fact increase as we increase the amount of cash available for dividends and share repurchases and unit purchases by paying an increasing portion of the compensation of our employees in the form of partnership units and restricted stock, gradually lowering our compensation expenses for purposes of Adjusted Earnings, and lowering our long-term effective tax rate for Adjusted Earnings, there can be no assurance that our strategy will be successful or that we can achieve any or all of such objectives.

UNRESOLVED STAFF COMMENTS

Not Applicable

From January 1, 2023 to the closing of the Corporate Conversion, we redeemed for cash an aggregate of 0.3 million limited partnership units at a weighted average price of $4.71 per unit and an aggregate of 0.2 million FPUs at a weighted average price of $5.11 per unit.

In the future, we may continue to repurchase shares of our Class A common stock from Cantor, our executive officers, other employees, and others, and these repurchases may be significant.

While we believe that we can successfully manage our issuance and repurchase strategy, and that our share price may in fact increase as we increase the amount of cash available for dividends and share repurchases by paying an increasing portion of the compensation of our employees in the form of restricted stock, gradually lowering our compensation expenses for purposes of Adjusted Earnings, and lowering our long-term effective tax rate for Adjusted Earnings, there can be no assurance that our strategy will be successful or that we can achieve any or all of such objectives.

General Risks

Our operations are global and exchange rate fluctuations and international market events could materially adversely impact our business, financial condition, results of operations and prospects.

Because our operations are global, we are exposed to risks associated with changes in FX rates.

Changes in foreign currency rates create volatility in the U.S.

In addition, changes in the remeasurement of our foreign currency denominated net assets are recorded as part of our results of operations and fluctuate with changes in foreign currency rates.

We monitor our net exposure in foreign currencies on a daily basis and hedge our exposure as deemed appropriate with major financial institutions.

However, potential movements in the U.S.

dollar against other currencies in which we earn revenues have in the past and may in the future materially adversely affect our financial results.

Furthermore, our revenues derived from non-U.S.

jurisdictions.

Revenues from the trading of non-U.S.

securities may be subject to negative fluctuations as a result of the above factors.

The impact of these fluctuations on our results could be magnified because non-U.S.

trading markets, particularly in emerging market countries, are smaller, less liquid and more volatile than U.S.

trading markets.

Employee error or miscommunication could impair our ability to attract and retain customers and subject us to significant financial losses, legal liability, regulatory sanctions and penalties and reputational harm;

moreover, misconduct is difficult to detect and deter, and error is difficult to prevent.

The risk of employee error and miscommunication may be greater for products or services that are new or have non-standardized terms.

Ongoing scrutiny and changing expectations from stockholders with respect to the Company’s corporate responsibility or ESG practices may result in additional costs or risks.

Companies across our industry are facing continuing scrutiny related to their corporate responsibility or ESG practices and related demographic disclosures.

Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also focused on such practices and related demographic disclosures and in recent years have placed increasing importance on the non-financial impacts of their investments.

Further, customer bids, requests for proposals and other customer arrangements or opportunities may require disclosure of or improvements in ESG metrics in order to compete for business.

While we are focused on these efforts and disclosures, if our practices and disclosure of specific metrics do not meet customer, investor or other industry participant expectations, which continue to evolve, we may not win or may lose customers, or may incur additional costs and our business, financial condition, results of operations and prospects could be materially adversely affected.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors