What changed in this filing

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Item 1. Business

2025-03-12 compared with 2024-03-06 · 100 added, 79 removed, 392 unchanged (31% of the section changed)

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Our business segments are Capital Markets, Asset Management, and Principal Investing.

Our Capital Markets business segment consists of fixed income sales, trading, and gestation repo financing as well as new issue placements in corporate and securitized products and advisory services, operating primarily through our subsidiaries, JVB in the United States (the “U.S.”) and CCFESA in Europe.

A division of JVB, Cohen & Company Capital Markets (“CCM”) is our full-service boutique investment bank that focuses on mergers and acquisitions (“M&A”), capital markets, and SPAC advisory.

Our Capital Markets business segment consists of fixed income sales, trading, gestation repo financing, new issue placements in corporate and securitized products, underwriting, and advisory services, operating primarily through our subsidiaries, JVB in the United States (the “U.S.”) and CCFESA in Europe.

A division of JVB, Cohen & Company Capital Markets (“CCM”) is our full-service boutique investment bank that focuses on mergers and acquisitions (“M&A”), capital markets, and SPAC advisory services.

Our Capital Markets business segment also includes investment returns on financial instruments that we have received as consideration for advisory, underwriting, and new issue placement services provided by CCM.

Our Asset Management business segment manages assets through investment vehicles, such as collateralized debt obligations (“CDOs”), managed accounts, joint ventures, and investment funds (collectively, “Investment Vehicles”).

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Our Principal Investing business segment is comprised primarily of investments we hold related to our SPAC franchise and investments that we have made for the purpose of earning an investment return rather than investments made to support our trading or other capital markets business activity.

Our Principal Investing segment also includes other investments that we have received as consideration for advisory services provided by our Capital Markets segment.

Capital Markets

Our Capital Markets business segment consists primarily of fixed income sales, trading, and gestation repo financing as well as new issue placements in corporate and securitized products and advisory services operating primarily through our subsidiaries, JVB in the U.S.

Our Capital Markets business segment consists primarily of fixed income sales, trading, gestation repo financing, new issue placements in corporate and securitized products, underwriting, and advisory services operating primarily through our subsidiaries, JVB in the U.S.

and CCFESA in Europe.

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CCFESA is regulated by the ACPR.

CCM was established in 2021 as a division of JVB to address the coverage gaps and structural shortfalls at leading investment banks.

CCM is a boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory services.

We have investment banking professionals with experience in a number of emerging growth verticals and continue to expand our offerings for our clients.

CCM is one of the most active SPAC advisors on Wall Street with differentiated and inventive products for clients.

In addition, we are growing our team of investment banking professionals with experience in a number of emerging growth verticals and continue to expand offerings for our clients.

We are a lead advisor on the majority of the transactions we advise, showcasing an ability to navigate complex transactions and volatile markets.

To date, CCM has hired 24 professionals with substantial industry and capital markets experience.

As of December 31, 2024, CCM had 21 investment banking professionals with substantial industry and capital markets experience.

Our fixed income sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers.

We specialize in a variety of products, including but not limited to:

corporate bonds and loans, asset-backed securities (“ABS”), mortgage backed securities (“MBS”), commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), CDOs, collateralized loan obligations (“CLOs”), collateralized bond obligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and other forward agency MBS contracts, U.S.

corporate bonds and loans, asset-backed securities (“ABS”), mortgage backed securities (“MBS”), residential mortgage-backed securities (“RMBS”), collateralized bond obligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and other forward agency MBS contracts, Small Business Administration loans ("SBA loans"), U.S.

government bonds, U.S.

government agency securities, brokered deposits and certificates of deposit (“CDs”) for small banks, and hybrid capital of financial institutions including TruPS, whole loans, and other structured financial instruments.

government agency securities, brokered deposits and certificates of deposit (“CDs”) for small banks, and hybrid capital of financial institutions including whole loans and other structured financial instruments.

In 2012, we established a trading desk for “to-be-announced” securities, or TBAs, as part of our mortgage group.

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In addition, our mortgage group acts as an intermediary between borrowers and lenders of short-term funds and provides funding for various inventory positions using repurchase agreements.

For several years, JVB has operated a gestation repo financing program.

In addition, JVB operates a gestation repo financing program.

In general, JVB lends money to a counterparty after obtaining collateral securities from that counterparty via a reverse repurchase agreement.

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For on balance sheet trades, JVB borrows from one counterparty and lends to another on a principal basis and earns net interest margin.

For agency repo trades, JVB gets paid a fee (which is paid by the borrower and is a function of the reverse repo notional amount), while the borrower and lender transact with each other directly.

For agency trades, JVB receives a fee (which is paid by the borrower and is a function of the reverse repo notional amount), while the borrower and lender transact with each other directly.

From 2017 through 2021, we also operated a matched book general collateral funding (“GCF”) repo business as a full netting member of the Fixed Income Clearing Corporation’s (“FICC”) Government Services Division.

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Our Capital Markets business segment generates revenue through the following activities:

(1) trading activities, which include execution and brokerage services, gestation repo, riskless trading activities as well as gains and losses (unrealized and realized), and income and expense earned on securities classified as trading, and (2) new issue and advisory revenue comprised of (a) origination fees for newly created financial instruments originated by us, (b) revenue from advisory services, and (c) new issue revenue associated with arranging and placing the issuance of newly created financial instruments.

Our Capital Markets business segment has offices in Boca Raton (Florida), Jupiter (Florida), Locust Valley (New York), Menlo Park (California), New York City (New York), Paris (France), and Philadelphia (Pennsylvania).

(1) trading activities, which include execution and brokerage services, gestation repo, riskless trading activities as well as gains and losses (unrealized and realized), and income and expense earned on securities classified as trading, (2) new issue and advisory revenue comprised of (a) origination fees for newly created financial instruments originated by us, (b) revenue from advisory services, (c) underwriting, and (d) new issue revenue associated with arranging and placing the issuance of newly created financial instruments, and (3) any investment returns on financial instruments that we have acquired or received as consideration for services provided by CCM.

Our Capital Markets business segment has offices in Boca Raton (Florida), Memphis (Tennessee), Menlo Park (California), New York City (New York), Paris (France), and Philadelphia (Pennsylvania).

Trades in our Capital Markets business segment can be either “riskless” or risk-based.

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Such risk-based trading activity may include the use of leverage.

In recent years, we began to utilize more leverage in our Capital Markets business segment.

We believe that the prudent use of capital to facilitate client orders increases trading volume and profitability.

Any gains or losses on trading securities that we have classified as investments-trading are recorded in our Capital Markets business segment, whereas any gains or losses on securities that we classified as other investments, at fair value are recorded in our Principal Investing business segment.

From time to time CCM will receive financial instruments as consideration for services.

We will generally record the fair value of the investment consideration as Capital Markets segment revenue at the time it is received, then reclassify the investment to the Principal Investing segment and record subsequent gains and losses, including periodic mark-to-market unrealized gains and losses, as components of the Principal Investing segment.

Our commercial real estate lending platform (“CRE Opportunities”), which operates outside of JVB, was created in 2021 with a primary focus on multi-family transitional loans and a team of professionals with extensive origination, underwriting, and securitization experience in the commercial real estate market.

Any gains or losses on trading securities that we have classified as investments-trading are recorded in our Capital Markets business segment.

In addition, any gains or losses on trading securities that we have classified as other investments, at fair value, which were acquired or received as consideration for services provided by CCM, are recorded in our Capital Markets business segment.

Whereas any gains or losses on securities that we have classified as other investments, at fair value, which were not received as consideration for services provided by CCM, are recorded in our Principal Investing business segment.

From time to time, CCM receives financial instruments as consideration for advisory, underwriting, and new issue placement services provided.

We generally record the fair value of the investment consideration as new issue and advisory revenue at the time it is received, and record subsequent gains and losses, including periodic mark-to-market unrealized gains and losses, as principal transactions revenue, which remain in the Capital Markets segment.

A description of our investment portfolio can be found under the heading "Principal Investing" below, reflecting the value as of December 31, 2024 of the financial instruments that CCM has acquired or received as consideration for services provided.

Our commercial real estate lending platform (“CRE Opportunities” or "CREO"), which operates outside of JVB, was created in 2021 with a primary focus on multi-family transitional loans and a team of professionals with extensive origination, underwriting, and securitization experience in the commercial real estate market.

Asset Management

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AUM equals the sum of the net asset value (“NAV”) or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation of our management fees.

Beginning in November 2023, we earn an annual servicing fee on the notional amount of the loans owned by the CREO JV and, from that point, the notional amount of these loans have been included in our AUM.

Beginning in November 2023, we earn an annual servicing fee on the notional amount of the loans owned by the CREO JV and, from that point, the notional amount of these loans has been included in our AUM.

Our calculation of AUM may differ from the calculations of other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers.

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This fund was fully invested in December 2017.

In January 2017, the second vintage fund in the series of these funds closed with total commitments of €203.5 million, an initial investment period of three years (which was later extended by two years), and a maturity date of January 2032.

These funds were fully invested in July 2021.

In July 2020, the third vintage fund in the series of these funds closed with total commitments of €375.5 million, an initial investment period of three years (which was later extended by one year), and a maturity date of July 2034.

This series of funds is referred to in this Annual Report on Form 10-K as the “PriDe Funds.” The PriDe Funds earn investment returns by investing in a diversified portfolio of debt securities issued by small and medium sized European and Bermudian insurance companies that have limited access to capital markets.

In January 2017, the second vintage Investment Vehicles in the series of these funds closed with total commitments of €203.5 million, an initial investment period of three years (which was later extended by two years), and a maturity date of January 2032.

These Investment Vehicles were fully invested in July 2021.

In July 2020, the third vintage Investment Vehicles in the series of these funds closed with total commitments of €375.5 million, an initial investment period of three years (which was later extended by two years), and a maturity date of July 2035.

In November 2024, the fourth vintage Investment Vehicles in the series of these funds closed with total commitments of €337 million, an initial investment period of three years, and a maturity date of November 2037.

This series of Investment Vehicles is referred to in this Annual Report on Form 10-K as the “PriDe Funds.” The PriDe Funds earn investment returns by investing in a diversified portfolio of debt securities issued by small and medium sized European and Bermudian insurance companies that have limited access to capital markets.

CCFESA earns investment advisor regular fees and investment advisor performance fees depending on the level of returns achieved.

We have not made an investment, nor do we expect to make any investment, in the PriDe Funds.

In addition, we provide investment management services to a number of separately managed accounts.

Part of our European CDO team has transitioned to providing investment management or advisory services primarily to European family offices, high net worth individuals, and asset managers.

The investment focus is on CDO and CLO notes and debt instruments where the investment managers have relevant expertise.

For these services, we are paid gross annual base management or advisory fees of approximately 1.5% plus a gross annual performance fee of 20% of cash-on-cash returns in excess of an 8% hurdle.

In addition, we provide investment management or advisory services to a number of separately managed accounts owned by family offices, high net worth individuals, and asset managers.

The investment focus of the separately managed accounts is on CDO, collateralized loan obligations ("CLO") notes, and debt instruments where our professionals have relevant expertise.

For the services provided to these managed accounts, we are paid gross annual base management or advisory fees of approximately 1.5% plus a gross annual performance fee of 20% of cash-on-cash returns in excess of an 8% hurdle.

There is also an early redemption fee if any of the clients were to terminate their arrangement within the first five years of the relationship.

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The CREO JV is managed by us.

The CREO JV was formed for the purposes of investing in primarily multi-family commercial real estate mortgage-backed loans and below-investment-grade rated tranches in CRE CLOs collateralized by mostly transitional commercial real estate mortgage-backed loans.

The CREO JV was formed for the purposes of investing in primarily multi-family commercial real estate mortgage-backed loans collateralized by mostly transitional commercial real estate mortgage-backed loans.

“CRE CLO” means any pooling of commercial real estate mortgage-backed loans into a collateralized loan obligation.

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Through December 31, 2024, we had not yet structured or consummated a CRE CLO and, accordingly, had not earned any management fees as manager of any CRE CLO.

Beginning in November 2023, we began earning an annual portfolio servicing fee on the notional amount of loans owned by the CREO JV, which is equal to 0.25%.

In November 2023, we began earning an annual portfolio servicing fee on the notional amount of loans owned by the CREO JV, which is equal to 0.25%.

Once we have earned aggregate portfolio servicing fees of $1.5 million, the annual percentage will drop to 0.10%.

From November 2023 through 2024, we have earned $0.8 million from the CREO portfolio servicing fee.

In 2018, we invested in and became the investment manager and general partner of a newly formed fund structure that was created for the purpose of investing primarily in the equity interests of SPACs and, in certain circumstances, SPAC sponsor entities including SPACs sponsored by us, our affiliates, and third parties (the “SPAC Fund”).

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As a result, effective April 1, 2023, the Vellar GP became the sole owner of, and began consolidating, the SPAC Fund.

We own a one-third interest in the Vellar GP.

Effective April 1, 2023, we began consolidating the SPAC Fund as well.

We owned a one-third interest in the Vellar GP, and effective April 1, 2023, we began consolidating the SPAC Fund as well.

CCFM was the manager of the SPAC Fund and was entitled to a quarterly base management fee based on a percentage of the NAV of the SPAC Fund until April 1, 2023.

In February 2025, we sold our one-third interest in the Vellar GP and going forward will no longer consolidate the Vellar GP or have any interest in the Vellar GP or the SPAC Fund.

See note 31 to our consolidated financial statements included in this Annual Report on Form 10-K.

SPAC Series Funds.

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As of December 31, 2024, our investment in the SPAC Series Funds was carried at $1.9 million.

As of December 31, 2023, in our capacity as the asset manager of the SPAC Series Funds, we received and still hold an allocation of 7.6 million founder shares, for a nominal purchase price, from 13 different SPAC sponsor entities that have not completed any business combinations.

As of December 31, 2024, in our capacity as the asset manager of the SPAC Series Funds, we received and still hold an allocation of 1.7 million founder shares, for a nominal purchase price, from six different SPAC sponsor entities that have not completed any business combinations.

These allocations will be worthless if the underlying SPACs fail to complete their business combination and liquidate.

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The IIFC revenue share arrangement expires when we have earned a cumulative $20 million in revenue share payments or with the dissolution of IIFC’s management company.

Also, in any particular year, the revenue share earned by us cannot exceed $2.0 million.

In 2024, we earned $2.6 million from the IIFC revenue share.

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More recently, capitalizing on our SPAC expertise, we have become active in multiple aspects of the SPAC market, including as a sponsor, asset manager, and investor, and as a result we hold various investments related to our SPAC franchise.

In addition, we have received securities as consideration for advisory services provided by our Capital Markets segment.

A SPAC is a shell corporation formed for the sole purpose of raising investment capital through an initial public offering (“IPO”), which is then used to acquire or merge with one or more unspecified businesses to be identified after the IPO.

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Subsequently, MetroMile was acquired by Lemonade, Inc.

(NASDAQ:LMND) (“Lemonade”).

(NYSE:LMND) (“Lemonade”).

Our third sponsored SPAC, INSU Acquisition Corp.

III (“Insurance SPAC III”), completed its $218 million IPO in December 2020 and was liquidated in December 2022 without completing a business combination within the required timeframe.

See note 4 to our consolidated financial statements included in this Annual Report on Form 10-K.

Subject to changes in the overall SPAC market, which are evolving rapidly, we may continue to grow our SPAC franchise and capitalize on opportunities in the space.

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The sponsor entity will continue to mark its investment in the SPAC to market after the business combination and we will recognize our share of the change in fair value as income or loss from equity method affiliates.

Once the sponsor entity distributes to us our share of the SPAC shares it owns, we will reclassify our investment from investment in equity method affiliate to other investments, at fair value as we will then hold the SPAC shares directly (rather than through an equity method investee).

Once the sponsor entity distributes to us our share of the SPAC shares it owns, we will reclassify our investment from investment in equity method affiliates to other investments, at fair value as we will then hold the SPAC shares directly (rather than through an equity method investee).

We will then record principal transactions income and loss until the SPAC shares themselves are liquidated.

We have also engaged in several transactions known as “share forward arrangements” (“SFAs”).

Through Vellar GP, we have also engaged in several transactions known as “share forward arrangements” (“SFAs”).

In a typical SFA transaction, we acquire an interest in a publicly traded company (referred to as the “SFA Counterparty”) through open market purchases, direct acquisitions from the SFA Counterparty, or a combination thereof.

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In some cases, the SFA requires the payment to be made exclusively in cash.

Importantly, the SFA does not obligate us to hold the interests which we acquired in the SFA Counterparty.

Importantly, the SFA does not obligate us to hold the interests that we acquired in the SFA Counterparty.

Following the execution of the SFA, we are free to sell the interests we acquired in the SFA Counterparty (assuming the interests themselves are not restricted from transfer).

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The SFAs provide the right of set off in the case of Maturity Consideration, thereby allowing us to keep the interests we hold in the SFA Counterparty and offset the Maturity Consideration we are owed following termination of the applicable SFA.

As of December 31, 2023, our Principal Investing portfolio included other investments, at fair value, which were valued at $72.2 million, and investments in equity method affiliates, which were carried at $14.2 million, net of other investments sold, not yet purchased, which were valued at $24.7 million, and non-convertible non-controlling interests, which were valued at $9.6 million.

A description of our Principal Investments as of December 31, 2023 is set forth below.

Other Investments,

Investments in Equity

Other Investments

On February 25, 2025, we sold all of our interests in Vellar GP and do not anticipate engaging in additional SFA transactions in the foreseeable future.

As of December 31, 2024, our investment portfolio included other investments, at fair value, which were valued at $35.3 million, and investments in equity method affiliates, which were carried at $23.4 million, net of other investments sold, not yet purchased, which were valued at $1.7 million, and the related non-convertible non-controlling interests, which were valued at $11.5 million.

Any financial instruments that CCM receives as consideration for services provided are included in the Capital Markets segment, while all other financial instruments are included in the Principal Investing segment;

financial instruments from both our Capital Markets and Principal Investing segments are shown in the chart below.

In addition, several of the positions listed below are subject to trading restrictions or are warrants, units, or notes that are convertible into publicly traded equity.

A description of our investments as of December 31, 2024 is set forth below.

Inv in Equity

Non-Convertible,

at Fair Value

Method Affiliates

Sold, Not Yet Purchased

Non Controlling Interest

Investment Value

Non-Sponsored SPACs:

Post-Business Combination

African Agriculture Holdings Inc.

Other Investments at Fair Value

Sold, Not Yet

Non-Controlling

Post-Business Combination SPACs -

Abpro Corporation

Baird Medical Investment Holdings Limited

Brand Engagement Network, Inc.

Captivision Inc.

Critical Metals Corp.

Crown LNG Holdings Limited

Murano Global Investments Plc

Payoneer Global Inc.

Perella Weinberg Partners

Syntec Optics Holdings, Inc.

Rezolve Limited

Vellar - SPVs

ZoomCar Holdings, Inc.

(convertible note and shares)

Pre-Business Combination SPACs -

Chenghe Acquisition II Co.

Dynamix Corporation (warrants)

FACT II Acquisition Corp (units)

Melar Acquisition Corp I

Other Investments -

Dutch Real Estate

SPAC Series Funds

Total Principal Investing Portfolio

Investment in Non-Sponsored SPACs, Post-Business Combination.

An investment in non-sponsored SPACs, post-business combination is classified as other investments, at fair value after we receive our allocation of the post-business combination publicly traded company shares.

During the period between the closing of the business combination and receiving our allocation of shares in the post-business combination publicly traded company, an investment in non-sponsored SPACs, post-business combination is classified as an investment in equity method affiliates, representing an investment in the sponsor of the SPAC, entitling us to an eventual allocation of post-business combination public company shares.

As of December 31, 2023, our investment in the public equity of non-sponsored SPACs, post-business combination was valued at $63.4 million as a component of other investments, at fair value and our investment in the sponsors entitling us to public equity of non-sponsored SPACs, post-business combination had a carrying value of $6.2 million as a component of investment in equity method affiliates.

Total Investment Portfolio

Investment in Post-Business Combination SPACs.

These are investments in publicly traded companies that were issued in connection with business combinations with SPACs.

A significant portion of this equity was received as consideration for services provided by CCM.

The portion that is not related to CCM consideration, is related to allocations of founder shares to us, for a nominal purchase price, from the SPAC sponsor entities in which the SPAC Series Funds invested.

An investment in post-business combination SPACs is classified as other investments, at fair value after we receive our allocation of the post-business combination publicly traded company shares.

During the period between the closing of the business combination and receiving our allocation of shares in the post-business combination publicly traded company, an investment in post-business combination SPACs is classified as an investment in equity method affiliates, representing an investment in the sponsor of the SPAC, entitling us to an eventual allocation of post-business combination public company shares.

As of December 31, 2024, our investment in the public equity of post-business combination SPACs was valued at $23.8 million as a component of other investments, at fair value, $15.1 million of which was received as consideration for services provided by CCM, and our investment in the sponsors entitling us to public equity of post-business combination SPACs had a carrying value of $17.7 million as a component of investment in equity method affiliates.

As of December 31, 2024, these investments had offsetting liabilities that were valued at $1.7 million as a component of other investments sold, not yet purchased, and $11.5 million as a component of non-convertible non-controlling interests, representing the portion of the investment that we do not ultimately own.

These investments are primarily a result of allocations of founder shares to us and certain of our employees, for a nominal purchase price, from the SPAC sponsor entities in which the SPAC Series Funds invest.

Certain of the shares are subject to restrictions on transfer until threshold trading prices are met.

See notes 4 and 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

Investment in Pre-Business Combination SPACs.

These are investments in publicly traded pre-business combination SPACs, which are primarily shares received as consideration for CCM acting as underwriter in the IPOs of SPACs or performing other advisory services.

As of December 31, 2024, our investment in the public equity of pre-business combination SPACs was valued at $1.6 million as a component of other investments, at fair value.

Investment in CREO JV.

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As of December 31, 2024, we had invested $4.9 million of our $15.0 million investment commitment, our investment in the CREO JV was valued at $6.4 million, which was included as a component of other investments, at fair value in our consolidated balance sheet, and the NAV of the CREO JV was $85.8 million.

Investment in Dutch Real Estate.

In December 2019, we acquired a 45% interest in CK Capital Partners B.V.

(“CK Capital”), a private company incorporated in the Netherlands, which provides asset and investment advisory services relating to real estate holdings, as well as a 10% interest in a related real estate holding company.

In December 2021, we invested an additional $2.4 million in the related real estate holding company.

As of December 31, 2024, our investment in these Dutch real estate entities was carried at $5.1 million, $0.4 million in CK Capital and $4.7 million in the real estate holding company, which was included as a component of investment in equity method affiliates in our consolidated balance sheet.

Investment in U.S.

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Insurance JV was $151.6 million.

Investment in Dutch Real Estate.

In December 2019, we acquired a 45% interest in CK Capital Partners B.V.

In December 2021, we invested an additional $2.4 million in the related real estate holding company.

As of December 31, 2023, our investment in these Dutch real estate entities was carried at $5.9 million, $0.4 million in CK Capital and $5.5 million in the real estate holding company, which was included as a component of investment in equity method affiliates in our consolidated balance sheet.

Investment in the SPAC Series Funds.

In 2020, we established and became the managing member and investment manager to the SPAC Series Funds that issue a separate series for each investment portfolio, which typically consists of investments in the sponsor entities of individual SPACs.

As of December 31, 2023, our investment in the SPAC Series Funds was carried at $1.1 million, which was included as a component of investment in equity method affiliates in our consolidated balance sheet.

Investment in Other Securities.

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As of December 31, 2024, we employed a total of 113 full-time professionals and support staff.

This number includes 70 employees of our JVB subsidiary, 7 employees of our CRE Opportunities group, 15 employees of our Principal Investing business segment, 8 employees of our U.S.

Asset Management business segment, 6 employees of our European Asset Management business segment, and 12 employees of our executive and support services group.

This number includes 76 employees of our JVB subsidiary, six employees of our CRE Opportunities group, five employees of our Principal Investing business segment, eight employees of our U.S.

Asset Management business segment, five employees of our European Asset Management business segment, and 13 employees of our executive and support services group.

We consider our employee relations to be good and believe that our compensation and employee benefits are competitive with those offered by other financial services firms that we compete with for personnel.

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We believe that the principal factors affecting competition in our business include the economic environment, the quality and price of our products and services, our client relationships, our reputation, our market focus, and the ability of our professionals.

Our competitors are other public and private asset managers, investment banks, brokerage firms, merchant banks, and financial advisory firms.

Our competitors are other public and private investment banks, brokerage firms, merchant banks, financial advisory firms, and asset managers.

We compete globally and on a regional, product, and niche basis.

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In addition, some of these competitors may have higher risk tolerances or make different risk assessments than we do, allowing them to consider a wider variety of investments and establish broader business relationships.

In recent years, there has been substantial consolidation and convergence among companies in the financial services industry, including among many of our former competitors.

There has been substantial consolidation and convergence among companies in the financial services industry, including among many of our former competitors.

In particular, a number of large commercial banks have established or acquired broker-dealers or have merged with other financial institutions.

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As part of the firm regulatory requirements under the ACPR it must maintain adequate financial resources as set out in the European Union Regulation (EU) 2019/2033, also known as the Investment Firms Regulation (IFR), and Directive (EU) 2019/2034, also known as the Investment Firms Directive (IFD).

CCFESA is classified as a class 2 firm.

This means that CCFESA shall at all times have own funds as the highest of the following:

(a) their fixed overhead requirement, that is to say one quarter of the fixed overhead of the preceding year, calculated in accordance with Article 13 of the IFD;

(b) their permanent minimum capital requirement (€75,000) in accordance with Article 14 of the IFD;

The IFR and the IFD apply to investment firms deemed sufficiently small and non-interconnected (so called “class 3” firms).

Class 3 firms are subject to less stringent financial requirements;

specifically, the capital requirement for a class 3 firm is equal to the higher of (1) €75,000 of permanent minimum capital requirement (PMR) or (2) a quarter of its fixed overhead measured on the basis of the previous year’s activity.

CCFESA is classified as a class 3 firm and is subject to a base regulatory tangible capital requirement of €621,000.

In addition, this base capital will be reviewed on an annual basis.

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In addition, any expansion of our activities into new areas may subject us to additional regulatory requirements that could adversely affect our business, reputation, and results of operations.

A new Anti-Money Laundering legislative package is under discussion between the European Parliament and Council.

The package includes a proposal for the creation of a new EU authority to fight money laundering (EU AML Authority).

The AML package, a new body of regulations to combat money laundering and the financing of terrorism (AML/CFT), was published on June 19, 2024.

It consists of one directive, the 6th Anti-Money Laundering Directive (hereafter “AMLD6”), and two regulations, one concerning the creation of the new European AML-FT authority - known by the acronym “AMLA” - and the other relating to the requirements that supervised entities must meet to protect the European Union's internal market against BC-FT risks.

As part of the AMLA package, the 6th Anti-Money Laundering Directive aims to improve the organization of national AML/CFT systems by establishing clear rules for national authorities, notably in terms of cooperation between Financial Intelligence Units (FIUs) and national supervisors.

The main contributions of this new directive concern the centralization and harmonization of information required for financial investigations, in particular bank account information and information on beneficial owners.

European Regulation 2022/2554 of December 14, 2022 on the digital operational resilience of the financial sector (DORA) came into force on January 17, 2025.

The requirements of this regulation apply, with certain exceptions, to all entities in the financial sector and concern:

● IT risk management;

● incident reporting;

● resilience testing;

● management of third-party risk borne by IT service providers.

Available Information

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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 1. Business