Virtu Financial, Inc.VIRT
Virtu Financial, Inc. Fair Value Disclosure
Financial Assets and Liabilities
Financial Instruments Measured at Fair Value
The fair value of equities, options, on-the-run U.S. government obligations, certain exchange traded notes and digital assets is estimated using recently executed transactions and market price quotations in active markets and are categorized as Level 1 with the exception of inactively traded equities, all other exchange traded notes and certain other financial instruments, which are categorized as Level 2. The Company’s corporate bonds, derivative contracts, other U.S. and non-U.S. government obligations and receivables and payables linked to digital assets have been categorized as Level 2. Fair value of the Company’s derivative contracts is based on the indicative prices obtained from a number of banks and broker-dealers, as well as management’s own analyses. The indicative prices have been independently validated through the Company’s risk management systems, which are designed to check prices with information independently obtained from exchanges and venues where such financial instruments are listed or to compare prices of similar instruments with similar maturities for listed financial futures in foreign exchange.
The Company prices certain financial instruments held for trading at fair value based on theoretical prices, which can differ from quoted market prices. The theoretical prices reflect price adjustments primarily caused by the fact that the Company continuously prices its financial instruments based on all available information. This information includes prices for identical and near-identical positions, as well as the prices for securities underlying the Company’s positions, on other exchanges that are open after the exchange on which the financial instruments is traded closes. The Company validates that all price adjustments can be substantiated with market inputs and checks the theoretical prices independently. Consequently, such financial instruments are classified as Level 2.
Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2025:
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Counterparty and Cash Collateral Netting | Total Fair Value | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Financial instruments owned, at fair value: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 1,511,213 | $ | 2,839,183 | $ | — | $ | — | $ | 4,350,396 | ||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 459,943 | 1,210,309 | — | — | 1,670,252 | |||||||||||||||||||||||||||
| Corporate Bonds | — | 1,207,385 | — | — | 1,207,385 | |||||||||||||||||||||||||||
| Exchange traded notes | — | 10,459 | — | — | 10,459 | |||||||||||||||||||||||||||
| Currency forwards | — | 211,856 | — | (204,775) | 7,081 | |||||||||||||||||||||||||||
| Options | 97,459 | — | — | — | 97,459 | |||||||||||||||||||||||||||
| $ | 2,068,615 | $ | 5,479,192 | $ | — | $ | (204,775) | $ | 7,343,032 | |||||||||||||||||||||||
| Financial instruments owned, pledged as collateral: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 1,896,091 | $ | 1,304,254 | $ | — | $ | — | $ | 3,200,345 | ||||||||||||||||||||||
| Exchange traded notes | — | 8,180 | — | — | 8,180 | |||||||||||||||||||||||||||
| $ | 1,896,091 | $ | 1,312,434 | $ | — | $ | — | $ | 3,208,525 | |||||||||||||||||||||||
| Other Assets | ||||||||||||||||||||||||||||||||
| Equity investment | $ | — | $ | — | $ | 86,491 | $ | — | $ | 86,491 | ||||||||||||||||||||||
| Digital assets | 154,610 | — | — | — | 154,610 | |||||||||||||||||||||||||||
| Exchange stock | 1,020 | — | — | — | 1,020 | |||||||||||||||||||||||||||
| $ | 155,630 | $ | — | $ | 86,491 | $ | — | $ | 242,121 | |||||||||||||||||||||||
| Receivables from broker dealers and clearing organizations: | ||||||||||||||||||||||||||||||||
| Receivables linked to digital assets | $ | — | $ | 328,934 | $ | — | $ | — | $ | 328,934 | ||||||||||||||||||||||
| $ | — | $ | 328,934 | $ | — | $ | — | $ | 328,934 | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Financial instruments sold, not yet purchased, at fair value: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 2,933,027 | $ | 2,784,522 | $ | — | $ | — | $ | 5,717,549 | ||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 234,169 | 1,155,901 | — | — | 1,390,070 | |||||||||||||||||||||||||||
| Corporate Bonds | — | 1,754,517 | — | — | 1,754,517 | |||||||||||||||||||||||||||
| Exchange traded notes | — | 26,135 | — | — | 26,135 | |||||||||||||||||||||||||||
| Currency forwards | — | 198,463 | — | (198,463) | — | |||||||||||||||||||||||||||
| Options | 216,992 | — | — | — | 216,992 | |||||||||||||||||||||||||||
| $ | 3,384,188 | $ | 5,919,538 | $ | — | $ | (198,463) | $ | 9,105,263 | |||||||||||||||||||||||
| Payables to broker dealers and clearing organizations: | ||||||||||||||||||||||||||||||||
| Payables linked to digital assets | $ | — | $ | 181,272 | $ | — | $ | — | $ | 181,272 | ||||||||||||||||||||||
| $ | — | $ | 181,272 | $ | — | $ | — | $ | 181,272 | |||||||||||||||||||||||
Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2024:
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Counterparty and Cash Collateral Netting | Total Fair Value | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Financial instruments owned, at fair value: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 686,827 | $ | 2,471,450 | $ | — | $ | — | $ | 3,158,277 | ||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 348,761 | 908,625 | — | — | 1,257,386 | |||||||||||||||||||||||||||
| Corporate Bonds | — | 967,377 | — | — | 967,377 | |||||||||||||||||||||||||||
| Exchange traded notes | 885 | 40,602 | — | — | 41,487 | |||||||||||||||||||||||||||
| Currency forwards | — | 716,970 | — | (676,905) | 40,065 | |||||||||||||||||||||||||||
| Options | 55,423 | — | — | — | 55,423 | |||||||||||||||||||||||||||
| $ | 1,091,896 | $ | 5,105,024 | $ | — | $ | (676,905) | $ | 5,520,015 | |||||||||||||||||||||||
| Financial instruments owned, pledged as collateral: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 1,639,404 | $ | 629,895 | $ | — | $ | — | $ | 2,269,299 | ||||||||||||||||||||||
| Exchange traded notes | — | 13,338 | — | — | 13,338 | |||||||||||||||||||||||||||
| $ | 1,639,404 | $ | 643,233 | $ | — | $ | — | $ | 2,282,637 | |||||||||||||||||||||||
| Other Assets | ||||||||||||||||||||||||||||||||
| Equity investment | $ | — | $ | — | $ | 75,843 | $ | — | $ | 75,843 | ||||||||||||||||||||||
| Digital assets | 81,671 | — | — | — | 81,671 | |||||||||||||||||||||||||||
| Exchange stock | 812 | — | — | — | 812 | |||||||||||||||||||||||||||
| $ | 82,483 | $ | — | $ | 75,843 | $ | — | $ | 158,326 | |||||||||||||||||||||||
| Receivables from broker dealers and clearing organizations: | ||||||||||||||||||||||||||||||||
| Receivables linked to digital assets | $ | — | $ | 51,595 | $ | — | $ | — | $ | 51,595 | ||||||||||||||||||||||
| $ | — | $ | 51,595 | $ | — | $ | — | $ | 51,595 | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Financial instruments sold, not yet purchased, at fair value: | ||||||||||||||||||||||||||||||||
| Equity securities | $ | 1,837,195 | $ | 1,854,883 | $ | — | $ | — | $ | 3,692,078 | ||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 107,045 | 1,313,955 | — | — | 1,421,000 | |||||||||||||||||||||||||||
| Corporate Bonds | — | 1,249,413 | — | — | 1,249,413 | |||||||||||||||||||||||||||
| Exchange traded notes | 15 | 73,225 | — | — | 73,240 | |||||||||||||||||||||||||||
| Currency forwards | — | 681,878 | — | (681,878) | — | |||||||||||||||||||||||||||
| Options | 5,240 | — | — | — | 5,240 | |||||||||||||||||||||||||||
| $ | 1,949,495 | $ | 5,173,354 | $ | — | $ | (681,878) | $ | 6,440,971 | |||||||||||||||||||||||
| Payables to broker dealers and clearing organizations: | ||||||||||||||||||||||||||||||||
| Interest rate swap | $ | — | $ | 2,572 | $ | — | $ | — | $ | 2,572 | ||||||||||||||||||||||
| Payables linked to digital assets | — | 134,164 | — | — | 134,164 | |||||||||||||||||||||||||||
| $ | — | $ | 136,736 | $ | — | $ | — | $ | 136,736 | |||||||||||||||||||||||
JNX Investment
The Company has a minority investment (the “JNX Investment”) in Japannext Co., Ltd. (“JNX”), formerly known as SBI Japannext Co., Ltd., a proprietary trading system based in Tokyo. In connection with the JNX Investment, the Company issued the SBI Bonds (as described in Note 9 “Borrowings”) and used the proceeds to partially finance the transaction. The JNX Investment is included within Level 3 of the fair value hierarchy. As of December 31, 2025 and December 31, 2024, the fair value of the JNX Investment was determined using a weighted average of valuations using 1) the discounted cash flow method, an income approach; 2) a market approach based on average enterprise value/EBITDA ratios of comparable companies; and to a lesser extent 3) a transaction approach based on transaction values of comparable companies. The fair value measurement is highly sensitive to significant changes in the unobservable inputs, and significant increases (decreases) in discount rate or decreases (increases) in enterprise value/EBITDA multiples would result in a significantly lower (higher) fair value measurement.
The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the JNX Investment:
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | Fair Value | Valuation Technique | Significant Unobservable Input | Range | Weighted Average | |||||||||||||||||||||||||||
| Equity investment | $ | 86,491 | Discounted cash flow | Estimated revenue growth | 5.0% - 6.0% | 5.3 | % | |||||||||||||||||||||||||
| Discount rate | 16.2% - 16.2% | 16.2 | % | |||||||||||||||||||||||||||||
| Market | Future enterprise value/ EBITDA ratio | 9.5x - 20.1x | 15.0x | |||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (in thousands) | Fair Value | Valuation Technique | Significant Unobservable Input | Range | Weighted Average | |||||||||||||||||||||||||||
| Equity investment | $ | 75,843 | Discounted cash flow | Estimated revenue growth | 5.0% - 5.0% | 5.0 | % | |||||||||||||||||||||||||
| Discount rate | 16.4% - 16.4% | 16.4 | % | |||||||||||||||||||||||||||||
| Market | Future enterprise value/ EBITDA ratio | 7.5x - 18.0x | 13.2x | |||||||||||||||||||||||||||||
Changes in the fair value of the JNX Investment are included within in the Consolidated Statements of Comprehensive Income.
The following presents the changes in the Company’s Level 3 financial instruments measured at fair value on a recurring basis:
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Balance at December 31, 2024 | Purchases | Total Realized and Unrealized Gains / (Losses) (1) | Net Transfers into (out of) Level 3 | Settlement | Balance at December 31, 2025 | Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||
| Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Equity investment | $ | 75,843 | $ | — | $ | 10,648 | $ | — | $ | — | $ | 86,491 | $ | 10,648 | ||||||||||||||||||||||||||||||
| Total | $ | 75,843 | $ | — | $ | 10,648 | $ | — | $ | — | $ | 86,491 | $ | 10,648 | ||||||||||||||||||||||||||||||
(1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. | ||||||||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Balance at December 31, 2023 | Purchases | Total Realized and Unrealized Gains / (Losses) (1) | Net Transfers into (out of) Level 3 | Settlement | Balance at December 31, 2024 | Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||
| Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Equity investment | $ | 81,805 | $ | — | $ | (5,962) | $ | — | $ | — | $ | 75,843 | $ | (5,962) | ||||||||||||||||||||||||||||||
| Total | $ | 81,805 | $ | — | $ | (5,962) | $ | — | $ | — | $ | 75,843 | $ | (5,962) | ||||||||||||||||||||||||||||||
| (1) Total realized and unrealized gains/(losses) includes gains and losses due to fluctuations in currency rates as well as gains and losses recognized on changes in the fair value of the JNX Investment. | ||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Not Measured at Fair Value
The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the Consolidated Statements of Financial Condition. The table below excludes non-financial assets and liabilities. The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximates fair value due to the relatively short-term nature of the underlying assets. The fair value of the Company’s long-term borrowings is based on quoted prices from the market for similar instruments, and is categorized as Level 2 in the fair value hierarchy.
The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2025:
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Carrying Value | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||||||||
(in thousands) | Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,061,697 | $ | 1,061,697 | $ | 1,061,697 | $ | — | $ | — | ||||||||||||||||||||||
| Cash restricted or segregated under regulations and other | 64,744 | 64,744 | 64,744 | — | — | |||||||||||||||||||||||||||
| Securities borrowed | 3,191,138 | 3,191,138 | — | 3,191,138 | — | |||||||||||||||||||||||||||
| Securities purchased under agreements to resell | 988,929 | 988,929 | — | 988,929 | — | |||||||||||||||||||||||||||
| Receivables from broker-dealers and clearing organizations | 1,567,471 | 1,567,471 | — | 1,567,471 | — | |||||||||||||||||||||||||||
| Receivables from customers | 161,561 | 161,561 | — | 161,561 | — | |||||||||||||||||||||||||||
| Other assets (1) | 39,945 | 39,945 | 16,414 | 23,531 | — | |||||||||||||||||||||||||||
| Total Assets | $ | 7,075,485 | $ | 7,075,485 | $ | 1,142,855 | $ | 5,932,630 | $ | — | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Short-term borrowings | $ | 12,382 | $ | 12,382 | $ | — | $ | 12,382 | $ | — | ||||||||||||||||||||||
| Long-term borrowings | 2,039,463 | 2,098,639 | — | 2,098,639 | — | |||||||||||||||||||||||||||
| Securities loaned | 3,477,831 | 3,477,831 | — | 3,477,831 | — | |||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 1,405,639 | 1,405,639 | — | 1,405,639 | — | |||||||||||||||||||||||||||
| Payables to broker-dealers and clearing organizations | 817,004 | 817,004 | — | 817,004 | — | |||||||||||||||||||||||||||
| Payables to customers | 43,103 | 43,103 | — | 43,103 | — | |||||||||||||||||||||||||||
| Other liabilities (2) | 26,039 | 26,039 | — | 26,039 | — | |||||||||||||||||||||||||||
| Total Liabilities | $ | 7,821,461 | $ | 7,880,637 | $ | — | $ | 7,880,637 | $ | — | ||||||||||||||||||||||
| (1) Includes cash collateral and deposits, and interest and dividends receivables. | ||||||||||||||||||||||||||||||||
| (2) Includes deposits, interest and dividends payable. | ||||||||||||||||||||||||||||||||
The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2024:
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Carrying Value | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||||||||||
(in thousands) | Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 872,513 | $ | 872,513 | $ | 872,513 | $ | — | $ | — | ||||||||||||||||||||||
| Cash restricted or segregated under regulations and other | 41,478 | 41,478 | 41,478 | — | — | |||||||||||||||||||||||||||
| Securities borrowed | 2,294,529 | 2,294,529 | — | 2,294,529 | — | |||||||||||||||||||||||||||
| Securities purchased under agreements to resell | 983,941 | 983,941 | — | 983,941 | — | |||||||||||||||||||||||||||
| Receivables from broker-dealers and clearing organizations | 1,049,255 | 1,049,255 | — | 1,049,255 | — | |||||||||||||||||||||||||||
| Receivables from customers | 149,804 | 149,804 | — | 149,804 | — | |||||||||||||||||||||||||||
| Other assets (1) | 31,726 | 31,726 | 11,121 | 20,605 | — | |||||||||||||||||||||||||||
| Total Assets | $ | 5,423,246 | $ | 5,423,246 | $ | 925,112 | $ | 4,498,134 | $ | — | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Short-term borrowings | $ | 38,541 | $ | 38,541 | $ | — | $ | 38,541 | $ | — | ||||||||||||||||||||||
| Long-term borrowings | 1,740,467 | 1,788,719 | — | 1,788,719 | — | |||||||||||||||||||||||||||
| Securities loaned | 2,431,878 | 2,431,878 | — | 2,431,878 | — | |||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 1,271,788 | 1,271,788 | — | 1,271,788 | — | |||||||||||||||||||||||||||
| Payables to broker-dealers and clearing organizations | 781,830 | 781,830 | — | 781,830 | — | |||||||||||||||||||||||||||
| Payables to customers | 46,112 | 46,112 | — | 46,112 | — | |||||||||||||||||||||||||||
| Other liabilities (2) | 26,114 | 26,114 | — | 26,114 | — | |||||||||||||||||||||||||||
| Total Liabilities | $ | 6,336,730 | $ | 6,384,982 | $ | — | $ | 6,384,982 | $ | — | ||||||||||||||||||||||
| (1) Includes cash collateral and deposits, and interest and dividends receivables. | ||||||||||||||||||||||||||||||||
| (2) Includes deposits, interest and dividends payable. | ||||||||||||||||||||||||||||||||
Offsetting of Financial Assets and Liabilities
The Company does not net securities borrowed and securities loaned, or securities purchased under agreements to resell and securities sold under agreements to repurchase. These financial instruments are presented on a gross basis in the Consolidated Statements of Financial Condition. In the tables below, the amounts of financial instruments owned that are not offset in the Consolidated Statements of Financial Condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments.
The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2025 and December 31, 2024:
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Assets | Amounts Offset in the Consolidated Statements of Financial Condition | Net Amounts of Assets Presented in the Consolidated Statements of Financial Condition | Amounts Not Offset in the Consolidated Statements of Financial Condition | |||||||||||||||||||||||||||||||||||
| (in thousands) | Financial Instrument Collateral | Counterparty Netting/ Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||||
| Offsetting of Financial Assets: | ||||||||||||||||||||||||||||||||||||||
| Securities borrowed | $ | 3,191,138 | $ | — | $ | 3,191,138 | $ | (3,083,612) | $ | (53,461) | $ | 54,065 | ||||||||||||||||||||||||||
| Securities purchased under agreements to resell | 988,929 | — | 988,929 | (988,274) | — | 655 | ||||||||||||||||||||||||||||||||
| Trading assets, at fair value: | ||||||||||||||||||||||||||||||||||||||
| Currency forwards | 211,856 | (204,775) | 7,081 | — | — | 7,081 | ||||||||||||||||||||||||||||||||
| Options | 97,459 | — | 97,459 | — | (96,708) | 751 | ||||||||||||||||||||||||||||||||
| Total | $ | 4,489,382 | $ | (204,775) | $ | 4,284,607 | $ | (4,071,886) | $ | (150,169) | $ | 62,552 | ||||||||||||||||||||||||||
| Gross Amounts of Recognized Liabilities | Amounts Offset in the Consolidated Statements of Financial Condition | Net Amounts of Liabilities Presented in the Consolidated Statements of Financial Condition | Amounts Not Offset in the Consolidated Statements of Financial Condition | |||||||||||||||||||||||||||||||||||
| (in thousands) | Financial Instrument Collateral | Counterparty Netting/ Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||||
| Offsetting of Financial Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Securities loaned | $ | 3,477,831 | $ | — | $ | 3,477,831 | $ | (3,382,370) | $ | (67,690) | $ | 27,771 | ||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 1,405,639 | — | 1,405,639 | (1,404,924) | — | 715 | ||||||||||||||||||||||||||||||||
| Trading liabilities, at fair value: | ||||||||||||||||||||||||||||||||||||||
| Currency forwards | 198,463 | (198,463) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Options | 216,992 | — | 216,992 | — | (96,708) | 120,284 | ||||||||||||||||||||||||||||||||
| Total | $ | 5,298,925 | $ | (198,463) | $ | 5,100,462 | $ | (4,787,294) | $ | (164,398) | $ | 148,770 | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Gross Amounts of Recognized Assets | Amounts Offset in the Consolidated Statements of Financial Condition | Net Amounts of Assets Presented in the Consolidated Statements of Financial Condition | Amounts Not Offset in the Consolidated Statements of Financial Condition | |||||||||||||||||||||||||||||||||||
| (in thousands) | Financial Instrument Collateral | Counterparty Netting/ Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||||
| Offsetting of Financial Assets: | ||||||||||||||||||||||||||||||||||||||
| Securities borrowed | $ | 2,294,529 | $ | — | $ | 2,294,529 | $ | (2,222,054) | $ | (39,309) | $ | 33,166 | ||||||||||||||||||||||||||
| Securities purchased under agreements to resell | 983,941 | — | 983,941 | (983,753) | — | 188 | ||||||||||||||||||||||||||||||||
| Trading assets, at fair value: | ||||||||||||||||||||||||||||||||||||||
| Currency forwards | 716,970 | (676,905) | 40,065 | — | — | 40,065 | ||||||||||||||||||||||||||||||||
| Options | 55,423 | — | 55,423 | — | (55,423) | — | ||||||||||||||||||||||||||||||||
| Total | $ | 4,050,863 | $ | (676,905) | $ | 3,373,958 | $ | (3,205,807) | $ | (94,732) | $ | 73,419 | ||||||||||||||||||||||||||
| Gross Amounts of Recognized Liabilities | Amounts Offset in the Consolidated Statements of Financial Condition | Net Amounts of Liabilities Presented in the Consolidated Statements of Financial Condition | Amounts Not Offset in the Consolidated Statements of Financial Condition | |||||||||||||||||||||||||||||||||||
| (in thousands) | Financial Instrument Collateral | Counterparty Netting/ Cash Collateral | Net Amount | |||||||||||||||||||||||||||||||||||
| Offsetting of Financial Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Securities loaned | $ | 2,431,878 | $ | — | $ | 2,431,878 | $ | (2,375,372) | $ | (48,545) | $ | 7,961 | ||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 1,271,788 | — | 1,271,788 | (1,271,573) | — | 215 | ||||||||||||||||||||||||||||||||
Payables to broker-dealers and clearing organizations: | ||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | 2,572 | — | 2,572 | — | — | 2,572 | ||||||||||||||||||||||||||||||||
| Trading liabilities, at fair value: | ||||||||||||||||||||||||||||||||||||||
| Currency forwards | 681,878 | (681,878) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Options | 5,240 | — | 5,240 | — | (5,213) | 27 | ||||||||||||||||||||||||||||||||
| Total | $ | 4,393,356 | $ | (681,878) | $ | 3,711,478 | $ | (3,646,945) | $ | (53,758) | $ | 10,775 | ||||||||||||||||||||||||||
The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged as of December 31, 2025 and December 31, 2024:
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Remaining Contractual Maturity | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Overnight and Continuous | Less than 30 days | 30 - 60 days | 61 - 90 Days | Greater than 90 days | Total | ||||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase: | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | — | $ | 315,000 | $ | 85,000 | $ | 100,000 | $ | — | $ | 500,000 | ||||||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 905,639 | — | — | — | — | 905,639 | ||||||||||||||||||||||||||||||||
| Total | $ | 905,639 | $ | 315,000 | $ | 85,000 | $ | 100,000 | $ | — | $ | 1,405,639 | ||||||||||||||||||||||||||
| Securities loaned: | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | 3,477,831 | $ | — | $ | — | $ | — | $ | — | $ | 3,477,831 | ||||||||||||||||||||||||||
| Total | $ | 3,477,831 | $ | — | $ | — | $ | — | $ | — | $ | 3,477,831 | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Remaining Contractual Maturity | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Overnight and Continuous | Less than 30 days | 30 - 60 days | 61 - 90 Days | Greater than 90 days | Total | ||||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase: | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | — | $ | 190,000 | $ | 185,000 | $ | 75,000 | $ | — | $ | 450,000 | ||||||||||||||||||||||||||
| U.S. and Non-U.S. government obligations | 821,788 | — | — | — | — | 821,788 | ||||||||||||||||||||||||||||||||
| Total | $ | 821,788 | $ | 190,000 | $ | 185,000 | $ | 75,000 | $ | — | $ | 1,271,788 | ||||||||||||||||||||||||||
| Securities loaned: | ||||||||||||||||||||||||||||||||||||||
| Equity securities | $ | 2,431,878 | $ | — | $ | — | $ | — | $ | — | $ | 2,431,878 | ||||||||||||||||||||||||||
| Total | $ | 2,431,878 | $ | — | $ | — | $ | — | $ | — | $ | 2,431,878 | ||||||||||||||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.