What changed in this filing

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Item 1. Business

2023-03-29 compared with 2022-03-30 · 100 added, 124 removed, 150 unchanged (60% of the section changed)

Overview of Company

Siebert Financial Corp., a New York corporation, incorporated in 1934, is a holding company that conducts the following lines of business through its wholly-owned and majority-owned subsidiaries:

Siebert Financial Corp., together with its subsidiaries, is a diversified financial services firm and provides a full range of brokerage and financial advisory services including securities brokerage, investment advisory and insurance offerings, and corporate stock plan administration solutions.

Our firm is characterized by building solid relationships with our clients through exceptional personal service and proven performance.

We have a strong legacy and continue to evolve in our approach to take advantage of ever-evolving opportunities in the financial services industry.

We conduct the following lines of business through our wholly-owned and majority-owned subsidiaries:

Muriel Siebert & Co., Inc.

(“MSCO”), which provides retail brokerage services.

MSCO is a Delaware corporation and broker-dealer registered with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934 (“Exchange Act”) and the Commodity Exchange Act of 1936, and member of the Financial Industry Regulatory Authority (“FINRA”), the New York Stock Exchange (“NYSE”), the Securities Investor Protection Corporation (“SIPC”), and the National Futures Association (“NFA”).

(“MSCO”) provides retail brokerage services.

Siebert AdvisorNXT, Inc.

(“SNXT”), which provides investment advisory services.

SNXT is a New York corporation registered with the SEC as a Registered Investment Advisor (“RIA”) under the Investment Advisers Act of 1940 (“Advisers Act”)

(“SNXT”) provides investment advisory services.

SNXT is a New York corporation registered with the SEC as a Registered Investment Advisor (“RIA”) under the Investment Advisers Act of 1940 (“Advisers Act”).

Park Wilshire Companies, Inc.

(“PW”), which provides insurance services.

(“PW”) provides insurance services.

PW is a Texas corporation and licensed insurance agency

Siebert Technologies, LLC.

(“STCH”), which provides robo-advisory technology development.

STCH is a Nevada limited liability company  

RISE Financial Services, LLC, (“RISE”), which provides prime brokerage services.

RISE was formerly known as WPS Prime Services, LLC (“WPS”), a Delaware limited liability company and a broker-dealer registered with the SEC and NFA.

RISE is a woman-owned and operated financial services firm that offers a comprehensive suite of prime brokerage services aligned with the growing mission-driven Environmental Social and Governance (“ESG”) initiatives of institutional investors.

(“STCH”) provides robo-advisory technology development.

STCH is a Nevada limited liability company.

RISE Financial Services, LLC, (“RISE”) is a Delaware limited liability company and a broker-dealer registered with the SEC and NFA.

StockCross Digital Solutions, Ltd.

(“STXD”), an inactive subsidiary headquartered in Bermuda.

(“STXD”) is an inactive subsidiary headquartered in Bermuda.

For purposes of this Annual Report, the terms “Siebert,” “Company,” “we,” “us” and “our” refer to Siebert Financial Corp., MSCO, SNXT, PW, STCH, RISE, and STXD collectively, unless the context otherwise requires.

Our headquarters are located at 535 Fifth Avenue, 4 th Floor, New York, NY 10017, with primary operations in New Jersey, Florida, and California.

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and clients around the world.

As of March 20, 2023, we had 117 full-time employees.

Our common stock is registered under Section 12 of the Exchange Act, and we file periodic reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy and information statements on Schedule 14.

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Our SEC filings are also available through our website at www.siebert.com, where investors are able to obtain copies of our public filings free of charge.

Our common stock, par value $.01 per share trades on the Nasdaq Capital Market under the symbol “SIEB.”

Siebert is a financial services company that provides a full range of brokerage, financial advisory, and insurance services through our operating subsidiaries.

Our mission is to create a strong financial future for our clients, shareholders, and strategic partners.

By leveraging Siebert’s strong legacy while investing in future technologies, we are committed to building a company that values our clients, shareholders, and employees.

Our common stock, par value $.01 per share trades on the Nasdaq Capital Market under the symbol “SIEB.”

Subsidiaries and Business Offerings

Muriel Siebert & Co., Inc.

MSCO has been providing online and traditional discount brokerage services to clients for over 50 years.

MSCO was founded in 1967 by Muriel F.

(“Mickie”) Siebert, a trailblazer who was the first woman to own a seat on the NYSE and the first to head one of its member firms.

On May 1, 1975, after the federal government banned fixed commissions by brokers, Mickie broke barriers and declared MSCO a discount brokerage firm.

Today, MSCO offers a wide range of products and services and serves as the primary subsidiary of Siebert.

In May 2022, MSCO received approval to expand its clearing services in the U.S.

by acting as a correspondent clearing firm for institutional and online broker-dealers, registered investment advisors and other asset managers.

Achieving this milestone strengthens our core competencies, diversifies our business, and reinforces our commitment as a strategic partner to our clients.

Today, MSCO offers a wide range of products and services and is the primary subsidiary of Siebert.

Products and Services

Self-directed trading

Wealth management / financial advice

Market making and fixed income investments

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Equity compensation plans (Siebert Corporate Services)

Siebert 2021 Form-10K 2

Wealth management / financial advice

Siebert 2022 Form-10K 2

Additional Information

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MSCO offers a wide selection of quality investment services, including broker assisted trades and free online self-service features such as real time quotes, market data, and trading tools.

Upon its merger with StockCross Financial Services, Inc., on January 1, 2020, MSCO became a self-clearing broker-dealer and added business lines such as securities lending, equity stock plan services, and market making.

MSCO also clears with National Financial Services Corp.

(“NFS”), a wholly-owned subsidiary of FMR, LLC.

MSCO is a self-clearing broker-dealer and also clears with National Financial Services Corp.

(“NFS”), a wholly-owned subsidiary of FMR, LLC.

Securities Finance and Market Making

We make markets in multiple exchanges and in over 2,000 equity securities and fixed income products.

The client service offerings within our Market Making division have evolved with capital markets and different trading strategies.

Our strengths include trading experience in domestic markets, enhanced liquidity, and the search for significant price improvement.

The ability of our Market Making division to execute large orders continues to be a strategic advantage in supporting the growth of our Corporate Services division.

We operate our Securities Finance Group, a division which consists primarily of our stock borrow / stock loan and related services.

Our management team brings decades of securities finance experience and we have seen positive results in recent years and are committed to continue to expand our securities finance operations.

Corporate Services

We are dedicated to helping publicly traded companies and their employees manage their equity compensation plans.

Corporate services is a key component of our business, and we leverage our technology partnerships to create a distinct advantage through FIX connection trading and real-time transaction reporting.

Our corporate services offering primarily supports small and mid-cap public companies.

Independent Retail Execution Services

MSCO and its clearing firms monitor order flow in efforts to ensure that customers are getting the best possible trade executions.

All equity orders are routed in a manner intended to afford MSCO’s customers the most favorable terms on all orders.

MSCO also offers customers execution services through various market centers for an additional fee, providing customers access to numerous market centers before and after regular market hours.

Customers may buy or sell fixed income securities, municipal bonds, corporate bonds, mortgage-backed securities, government sponsored enterprises, unit investment trusts, mutual funds, certificates of deposit, and other securities.

These transactions are serviced by MSCO’s registered representatives.

Retail Customer Service

MSCO believes that its superior customer service enhances its ability to compete with larger brokerage firms and provides retail customers with personal service via access to dedicated customer service personnel for all of its products and services.

Customer service personnel, located in MSCO’s branch offices, are cross trained to assist with all clients’

needs for a reliable experience.

MSCO uses a variety of customer relationship management systems that enables representatives, in any location, to review and respond to customers’

requests in a timely manner.

Customer service personnel, located in MSCO’s branch offices, are cross trained to assist with all clients’ needs for a reliable experience.

MSCO uses a variety of customer relationship management systems that enables representatives in any location to review and respond to customers’ requests in a timely manner.

Retirement Accounts

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Customer Financing

Customer margin accounts are carried whereby money is lent to customers for a portion of the market value of marginable securities held in the customer’s account.

Margin loans are collateralized by these securities.

Customers also may sell securities short in a margin account, subject to minimum equity and applicable margin requirements, and the availability of such securities to be borrowed.

In permitting customers to engage in margin financing, short sale or any other transaction, MSCO assumes the risk of its customers’

failure to meet their obligations in the event of adverse changes in the market affect the value of the margined securities positions.

In permitting customers to engage in margin financing, short sale or any other transaction, MSCO assumes the risk of its customers’ failure to meet their obligations in the event of adverse changes in the market affect the value of the margined securities positions.

MSCO and NFS reserve the right to set margin requirements higher than those established by the Federal Reserve System.

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In the last five years, MSCO has not had any significant losses as a result of customers failing to meet commitments.

Siebert 2022 Form-10K 3

Information and Communications Systems

MSCO relies heavily on its data technology platform and the platform provided by its clearing agents.

These platforms offer interfaces to MSCO’s clearing service providers’ computing systems where all customer account records are kept and are accessible through MSCO’s data technology platform.

MSCO’s systems also utilize browser-based access and other types of data communications.

MSCO’s representatives use NFS systems, by way of MSCO’s data technology platform, to perform daily operational functions which include trade entry, trade reporting, clearing-related activities, risk management and account maintenance.

MSCO’s data technology platform offers services used in direct relation to customer activities as well as support for corporate use.

Some of these services include email and messaging, market data systems and third-party trading systems, business productivity tools and customer relationship management systems.

MSCO’s data network is designed with redundancies in case a significant business disruption occurs.

To ensure reliability and to conform to regulatory requirements related to business continuity, MSCO maintains backup systems and backup data, leverages cloud-based technology, and has a full-time offsite disaster recovery site to ensure business continuity during a potential wide-spread disruption.

However, despite the preventive and protective measures in place, in the event of a wide-spread disruption, MSCO’s ability to satisfy the obligations to customers and other securities firms may be significantly hampered or completely disrupted.

For more information regarding our business continuity plan, refer to the Business Continuity Statement on our website.

We are consistently enhancing technology for both our customers as well as our internal operations.

We are currently in the process of enhancing our retail trading platform to provide a seamless user experience for our customers and streamline our operations.

Siebert AdvisorNXT, Inc.

SNXT offers customers our proprietary robo-advisory technology that utilizes trading algorithms initially developed by STCH.

SNXT offers customers our proprietary robo-advisory technology that utilizes trading algorithms initially developed by STCH to create our robo-advisor.

This technology provides clients with cost-efficient, competitively priced, and automated wealth management solutions intended to maximize portfolio returns based on specific risk tolerance.

The platform utilizes Nobel Prize-winning Modern Portfolio Theory (“MPT”) to create optimal portfolios for each client.

We provide web-based tools to enable clients to monitor and interact with the Robo-Advisor’s automated portfolio manager application.

Siebert 2021 Form-10K 3

The Robo-Advisor selects low-cost, well-managed, exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) that represent the asset classes that provide clients the necessary risk-adjusted exposure given current market conditions.

In order to determine a client’s risk tolerance, a prospective client answers a series of objective questions posed in the form of an interactive digital interview.

Once a client’s risk tolerance is determined, the Robo-Advisor’s algorithm utilizes MPT to create a theoretically optimal allocation across a diverse selection of asset classes, thus tailoring a portfolio to a client’s specific investment objectives and risk tolerance.

The platform utilizes Nobel Prize-winning Modern Portfolio Theory (“MPT”) to create optimal portfolios for each client.

We provide web-based tools to enable clients to monitor and interact with the robo-advisor’s automated portfolio manager application.

The robo-advisor selects low-cost, well-managed, exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) that represent the asset classes that provide clients the necessary risk-adjusted exposure given current market conditions.

The robo-advisor continuously monitors and periodically rebalances portfolios to address changes in market and economic conditions.

SNXT offers its clients access to investment managers and advisory services of Envestnet Asset Management, Inc.

(“Envestnet”).

Envestnet is registered with the SEC as an investment advisor and provides investment advisory services, technology services, and products to our advisory clients.

Upon contracting to an investment strategy proposal, clients grant full discretionary authority to Envestnet to determine the securities to be bought and sold, and the amount and time of those transactions.

Products and Services

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PW is a full-service insurance agency founded in 2010.

Through PW, we have expanded our product offering to include various insurance products such as fixed annuities and property and casualty insurance.

Through PW our product offerings include various insurance products such as fixed annuities and property and casualty insurance.

Products and Services

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Life and disability

RISE Financial Services, LLC

In December 2019, we acquired WPS Prime Services, LLC, a prime brokerage focused on providing institutional quality services to hedge funds.

In November 2021, we purchased a minority stake in Tigress Holdings, LLC, (“Tigress”) a disabled and woman-owned financial services firm, in exchange for a minority stake in RISE and shares of Siebert stock.

As part of the transaction, Siebert rebranded WPS and changed its name to create RISE.

Cynthia DiBartolo, Tigress’

founder, was appointed to the of CEO of RISE, as well as to the Board of Directors of Siebert and RISE.

Gebbia was appointed to the position of Chief Impact Officer at RISE as well as to the Board of Directors of RISE.

RISE is a woman-owned, diverse financial services firm, extending Siebert’s 50+ year history of diversity, equity, and inclusion which began with Muriel Siebert.

RISE Prime, a division of RISE, specializes in offering a comprehensive suite of prime brokerage services aligned with the growing mission-driven Environmental, Social and Governance (ESG) initiatives of institutional investors.

RISE offers state of the art technology solutions, risk and analytic systems, capital introduction and trading capabilities that can accommodate the complex business requirements from the most sophisticated hedge funds to the growing sector of emerging managers.

RISE maintains a prime clearing relationship with BNY Mellon Bank - Pershing, positioning RISE to serve as a strategic partner to institutional clients when diversity and access to best-in-class prime brokerage services matter.

Products and Services

Financing solutions

Execution services

Securities lending

Client service

Capital introductions

Siebert 2021 Form-10K 4

Siebert 2022 Form-10K 4

Siebert Technologies, LLC

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Through STCH, we expanded our products and services by offering a robo-advisor through SXNT, and we plan to use this subsidiary for future fintech opportunities and products and services.

Strategic Acquisitions, Investments, and Partnerships

Hedge Connection

In January 2022, we acquired a minority stake in Hedge Connection, Inc.

(“Hedge Connection”), a woman-owned FinTech company offering a patented enterprise capital introduction SaaS solution, branded as “FUEL.”

The founder of Hedge Connection, Lisa Vioni, was appointed as President of RISE Prime –

Head of Capital Introductions, and was appointed to the Board of RISE.

FUEL is a powerful platform that allows hedge fund managers to connect with a global pool of institutional investors and retain control over how their information is shared while helping allocators to streamline due diligence.

FUEL provides RISE Prime with a technology solution to efficiently scale a comprehensive capital introduction program for clients.

Tigress Holdings, LLC

In November 2021, we purchased a minority stake in Tigress, the parent company of Tigress Financial Partners, LLC, (“Tigress Financial Partners”), a disabled and woman-owned financial services firm, in exchange for a minority stake in RISE and shares of Siebert stock.

Tigress Financial Partners provides institutional and high net worth investors with expertise in investment banking, capital markets, research, corporate advisory and global trade execution services, asset management and global wealth management.

Tigress Financial Partners serves as a strategic diversity partner to corporate issuers, bookrunners, hedge funds and private equity firms and is the first disabled and woman-owned Floor Broker and Member of the NYSE in the Big Board’s 229-Year history.

This partnership aligns two key broker-dealers on Wall Street with a shared culture, and the transaction’s focus on ESG and charitable initiatives aligns with Cynthia DiBartolo and Gloria Gebbia’s extensive involvement with charitable organizations.

StockCross Financial Services, Inc.

Effective January 1, 2020, we acquired the remaining 85% of StockCross’

outstanding shares, and StockCross was merged with and into MSCO.

As of January 1, 2020, all clearing services provided by StockCross were performed by MSCO.

The acquisition of StockCross provided new business lines such as market-making, equity stock plan services, self-clearing and custody, IRA custodianship and securities lending.

Merging StockCross into MSCO increased our total net capital and assets under management and added two retail branches.

StockCross also provided an equity stock plan service business line that offers integrated and comprehensive solutions to corporate service clients and employee participants.

RISE Financial Services, LLC

During 2021 and 2022, RISE Prime Services, LLC was a prime broker focused on providing institutional quality services to hedge funds and other institutional investors.

Reorganization of RISE, Tigress, and Hedge Connection

In 2021 and 2022, Siebert and RISE engaged in certain transactions with Tigress Holdings, LLC (“Tigress”) and Hedge Connection, Inc.

(“Hedge Connection”) to exchange equity, cash, and respective leadership positions.

Based upon the strategic direction of these ventures, management of the respective businesses decided to unwind the original transactions with Siebert, RISE, Hedge Connection and Tigress.

See Note 3 – Transactions with Tigress and Hedge Connection for further detail on these transactions.

Siebert management is assessing the future strategic direction of RISE, taking into consideration current market conditions, demand trends, and resources.

We encounter significant competition from full-commission, online and discount brokerage firms, including zero commission firms, as well as from financial institutions, mutual fund sponsors, venture-backed technology and cryptocurrency firms, and other organizations.

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however, our success in the financial services industry is a result of our high-quality customer service, responsiveness, products offered, and excellent executions.

Siebert 2021 Form-10K 5

Siebert 2022 Form-10K 5

Cybersecurity

Cybersecurity presents significant challenges to the business community in general, as well as to the financial services industry.

Increasingly, bad actors, both domestically and internationally, attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals’

and companies’

files and equipment connected to the Internet.

Increasingly, bad actors, both domestically and internationally, attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals’ and companies’ files and equipment connected to the internet.

Recently, intruders have become increasingly sophisticated and use deceptive methods to steal funds and personally identifiable information which they either take for their own purposes, release to the internet, or hold for ransom.

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MSCO is a member of the NYSE and the FINRA.

Much of the regulation of broker-dealers has been delegated to self-regulatory organizations (“SROs”), principally FINRA, which is MSCO’s and RISE’s primary regulator with respect to financial and operational compliance.

These SROs adopt rules (subject to approval by the SEC) governing the industry and conduct periodic examinations of broker-dealers.

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The principal purpose of regulation and discipline of broker-dealers is the protection of customers and the securities markets.

funds and securities, capital structure of securities firms, record keeping, fee arrangements, disclosure to clients, and the conduct of directors, officers and employees.

The regulations to which broker-dealers are subject cover all aspects of the securities business, including training of personnel, sales methods, trading practices among broker-dealers, uses and safekeeping of customers’ funds and securities, capital structure of securities firms, record keeping, fee arrangements, disclosure to clients, and the conduct of directors, officers and employees.

Additional legislation, changes in rules promulgated by the SEC and by SROs or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of broker-dealers.

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Dodd-Frank Act of 2010

As a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 (“Dodd-Frank”), the adoption of implementing regulations by the federal regulatory agencies as well as other recent regulatory reforms, we have experienced significant changes in the laws and regulations that apply to us, how we are regulated, and regulatory expectations in the areas of compliance, risk management, corporate governance, operations, capital and liquidity.

As a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 (“Dodd-Frank”), the adoption of implementing regulations by the federal regulatory agencies, as well as other recent regulatory reforms, we have experienced significant changes in the laws and regulations that apply to us, how we are regulated, and regulatory expectations in the areas of compliance, risk management, corporate governance, operations, capital and liquidity.

Regulation Best Interest

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Regulation Best Interest Rules have impacted the conduct of our business, especially with respect to our business with our retail clients.

The need for enhanced documentation for recommendations of securities transactions to broker-dealer retail clients as well as the increased supervision of sales practices and transactions have increased the amount of record-keeping and training for our sales staff.

The need for enhanced documentation for recommendations of securities transactions to broker-dealer retail clients as well as the increased supervision of sales practices and transactions increased the amount of record-keeping and training for our sales staff.

The related new rules and procedures have and may continue to bring increased costs associated with compliance and enhanced technology.

Siebert 2021 Form-10K 6

We reviewed our business practices and operating models in light of the Regulation Best Interest Rules and made structural, technological and operational changes to our business leading up to the effective date of June 30, 2020 for compliance with the Regulation Best Interest Rules.

As a result, we conducted thorough training of all our employees with respect to the requirements of Regulation Best Interest.

Additionally, we created the Regulation Best Interest Rule’s required documents and completed each of the required mailings (both electronic and conventional) prior to the effective date.

Siebert 2022 Form-10K 6

We operate pursuant to Regulation Best Interest Rules and as such, we conducted thorough training of all our employees with respect to the requirements of Regulation Best Interest.

Additionally, we created the Regulation Best Interest Rule’s required documents and completed each of the required mailings (both electronic and conventional) prior to the effective date.

We believe that the changes made to our business processes resulted in compliance with these new requirements.

As business continues to be conducted under the Regulation Best Interest Rules, it is likely that additional changes may be necessary.

As a registered broker-dealer and FINRA member organization, MSCO is required by federal law to belong to the Securities Investor Protection Corporation (“SIPC”) which provides, in the event of the liquidation of a broker-dealer, protection for securities held in customer accounts held by the firm of up to $500,000 per customer, subject to a limitation of $250,000 on claims for cash balances.

As a registered broker-dealer and FINRA member organization, MSCO is required by federal law to belong to the SIPC which provides, in the event of the liquidation of a broker-dealer, protection for securities held in customer accounts held by the firm of up to $500,000 per customer, subject to a limitation of $250,000 on claims for cash balances.

SIPC is principally funded through assessments on registered broker-dealers.

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Neither SIPC protection nor the additional protection insures against fluctuations in the market value of securities.

MSCO is also authorized by the Municipal Securities Rulemaking Board (“MSRB”) to affect transactions in municipal securities on behalf of its customers and has obtained certain additional registrations with the SEC and state regulatory agencies necessary to permit it to engage in certain other activities incidental to its brokerage business.

Margin Lending

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SNXT is registered with the SEC as an investment adviser pursuant to the Advisers Act.

The Advisers Act, together with the SEC’s regulations and interpretations thereunder, is a highly prescriptive regulatory statute.

The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act, ranging from fines and censures to termination of an adviser’s registration and, in the case of willful violations, can refer a matter to the Unites States Department of Justice for criminal prosecution.

The Advisers Act, together with the SEC’s regulations and interpretations thereunder, is a highly prescriptive regulatory statute.

Under the Advisers Act, an investment adviser (whether or not registered under the Advisers Act) owes fiduciary duties to its clients.

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allocations of investment opportunities among clients;

use of “soft dollar arrangements,”

a practice that involves using client brokerage commissions to purchase research or other services that help managers make investment decisions;

use of “soft dollar arrangements,” a practice that involves using client brokerage commissions to purchase research or other services that help managers make investment decisions;

execution of transactions;

and recommendations to clients.

As a RIA, SNXT is subject to additional requirements that cover, among other things, disclosure of information about its business to clients;

As an RIA, SNXT is subject to additional requirements that cover, among other things, disclosure of information about its business to clients;

maintenance of written policies and procedures;

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The SEC has legal authority to inspect any investment adviser and typically inspects a RIA periodically to determine whether the adviser is conducting its activities in compliance with (i) applicable laws and regulations, (ii) disclosures made to clients and (iii) adequate systems, policies and procedures reasonably designed to prevent and detect violations.

Section 28(e) of the Exchange Act provides a “safe harbor”

to investment managers who use commission dollars generated by their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to the manager in the performance of investment decision-making responsibilities.

SNXT, as a matter of policy, does not use “soft dollars”

and as such, it has no incentive to select or recommend a broker or dealer based on any interest in receiving research or related services.

Rather, as a fiduciary, SNXT selects brokers based on its clients’

interests in receiving best execution.

Siebert 2021 Form-10K 7

Section 28(e) of the Exchange Act provides a “safe harbor” to investment managers who use commission dollars generated by their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to the manager in the performance of investment decision-making responsibilities.

SNXT, as a matter of policy, does not use “soft dollars” and as such, it has no incentive to select or recommend a broker or dealer based on any interest in receiving research or related services.

Rather, as a fiduciary, SNXT selects brokers based on its clients’ interests in receiving best execution.

Siebert 2022 Form-10K 7

Bank Secrecy Act of 1970

We conduct financial services activities that are subject to the Bank Secrecy Act of 1970 (“BSA”), as amended by the USA PATRIOT Act of 2001 (“PATRIOT Act”), which require financial institutions to develop and implement programs reasonably designed to achieve compliance with these regulations.

The BSA and PATRIOT Act include a variety of monitoring, recordkeeping, and reporting requirements (such as currency transaction reporting and suspicious activity reporting) as well as identity verification and client due diligence requirements, which are intended to detect, report and/or prevent money laundering, and the financing of terrorism.

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sanctions programs administered by the Office of Foreign Assets Control.

requirements for client trades under SEC guidelines and FINRA rules, and segregation of fully paid client funds and securities under the SEC Customer Protection Rule (Rule 15c3-3), administered by the SEC and FINRA.

As registered broker-dealers, MSCO and RISE are subject to the requirements of the Exchange Act relating to broker-dealers such as minimum net capital requirements under the SEC Uniform Net Capital Rule (Rule 15c3-1) and segregation of fully paid client funds and securities under the SEC Customer Protection Rule (Rule 15c3-3), administered by the SEC and FINRA.

Net capital rules are designed to protect clients, counterparties and creditors by requiring a broker-dealer to have sufficient liquid resources available to satisfy its financial obligations.

Net capital is a measure of a broker-dealer’s readily available liquid assets, reduced by its total liabilities other than approved subordinated debt.

Under the SEC Uniform Net Capital Rule, a broker-dealer may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount below required levels.

Failure to maintain the required regulatory net capital may subject a firm to suspension or expulsion by the NYSE or FINRA, as well as certain punitive actions by the SEC and other regulatory bodies, which ultimately could require a firm’s liquidation.

Best Execution

As explained in SEC guidelines and FINRA rules, brokers are required to seek the “best execution”

reasonably available for their clients’

As explained in SEC guidelines and FINRA rules, brokers are required to seek the “best execution” reasonably available for their clients’ orders.

In part, this requires brokers to use reasonable diligence so that the price to the client is as favorable as possible under prevailing market conditions.

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None of our employees are represented by a union, and we believe that relations with our employees are good.

Siebert 2021 Form-10K 8

Siebert 2022 Form-10K 8

To maintain a high-caliber, values-driven workforce that is committed to our culture, we strive to offer total rewards, including compensation and benefits that position our company as an employer of choice.

We design our compensation to be competitive in the markets in which we compete, and closely monitor industry trends and practices to ensure we are able to attract and retain the personnel who are critical to our success.

To support our employees’

health and well-being, we offer competitive medical, dental and vision plans as well as other health benefits.

We believe in our employees’

potential and provide training and development opportunities intended to maximize their performance and professional growth.

To support our employees’ health and well-being, we offer competitive medical, dental and vision plans as well as other health benefits.

We believe in our employees’ potential and provide training and development opportunities intended to maximize their performance and professional growth.

We require all of our employees to complete courses in key regulatory areas, such as insider trading and anti-money laundering compliance.

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We are committed to providing a workplace that is free from violence, harassment and other unsafe or disruptive conditions, and require our personnel to attend regular training sessions and workshops on those topics.

In response to the COVID-19 pandemic and for the protection of our employees, clients and business partners, we implemented remote work arrangements for nearly 100% of our employees, restricted business travel and temporarily closed some of our branch offices.

As of the date of this Report we have reopened all of our branch offices.

Siebert 2021 Form-10K 9

Siebert 2022 Form-10K 9

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