FOCUS Report Nylife Securities Llc

X-17A-5 [Paper] - FOCUS Report

Published: 2006-06-19 20:10:29
Submitted: 2006-03-17
Period Ending In: 2005-12-31
scanned.pdf Scanned paper document


&                                     «_ MIMMIH        06005584                  1.
                                                                                                         —> +      OMB Number:       3235—
                                                                                                                   Ex?ires;r: ejanuarg 3(1:'1 g(;gg
                                                                                                                                                      1       i
                                                                                                                    stimated average burden
                                          NNUAL AUDITED REPORT                                                     hours per response... .. . 12.00

                                                   FOFIE"I\\AR)'(I:' 1"7|A'5                                                    SEC FILE NUMBER
                                                                                                                                * 155|
                                                       FACING PAGE
              Information Required of Brokers and Dealers Pursuant to Section 17 of the
                           Securities Exchange Act of 1934 and Rule 17a—5 Thereunder

REPORT FOR THE PERIOD BEGINNING                  01/01/05                              AND ENDING__12/31/05
                                                               MM/DD/YY                                                  MM/DD/YY

                                     A. REGISTRANT IDENTIFICATION

NAME OF BROKER—DEALER: NYLIFE Securities Inc.                                                                           OFFICIAL USE ONLY

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)                                                               FIRM 1.D. NO.

   51 Madison Avenue
                                                           (No. and Street)
   New York                                                     KY                                                      10010
                   (City)                                            (State)                                       (Zip Code)


    Joseph 0 ‘Neill                                                            (212) 351—6006                        (Area Code — Telephone Number)

                                     B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

    PricewaterhouseCoopers LLP
                                               (Name — if individucl, state last, first, middle name)

    300 Madison Avenue                               New York                                       NY                          10017
      (Address)                                       (City)                                             (State)                     (Zip Code)

CHECK ONE:             '                                                                       |             PROCESSE

          £] Certified Public Accountant                                                       ['              JUN 2 @ 2&8&
           C Public Accountant
           C Accountant not resident in United States or any of its possessions.                                   FINANCIAL

                                               FOR OFFICIAL USE ONLY

 *Claims for exemption from the requirement that the annual report e                  d by the opinibn ofan independent public accountant
 must be supported by a statement offacts and circumstances relied 0                      .s far th  e @n. See Section 240.17a—5(e)(2)

                                 Potential persons who are to respond to the         x« n ‘of
                                 information contained in this form are not required to respond
    SEC 1410 (06—02)             unless the form displays a currently valid OMB control number.


                                                                     OATH OR AFFIRMATION

     I,                         Joseph O‘Neill                                                           , swear (or affirm) that, to the best of
     my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of

                                NYLIFE Securities Inc.                                                                                        , as
     of                         Decembher31,                                 , 2005      , are true and correct. I further swear (or affirm) that
     neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account

     classified solely as that of a customer, except as follows:

                ~~              i

                      SUBSGRIBEDAND SWORN To BEFOR; ME
                      This /(\mvos "~VHL»A Ftob                                                                     .
                                                                                                        2      _/

                                                                                          ]        I[ Siénaturc

               NOTARY PUBLIC, STATE OF NEW YORK                                          Chief Financial Officer
                       <~*    2, NO. 01ED6091240                                                            Title
                     QUALIFIED IN NEW YORK COUNTY

      COMMISSION EXPIRES APRIL                               8   J
                                    Notary Public

      This report ** contains (check all applicable boxes):

      K (a) Facing Page.
      j (b) Statement of Financial Condition.
      DJ         (c)         Statement   of Income (Loss).

      C1         (d)         Statement   of Changes in Financial Condition.
      L          (e)         Statement   of Changes in Stockholders‘ Equity or Partners‘ or Sole Proprietors‘ Capital.
      C          (f)         Statement   of Changes in Liabilities Subordinated to Claims of Creditors.
          DQ (g) Computation of Net Capital.

          O (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15¢3—3.
          B (i) Information Relating to the Possession or Control Requirements Under Rule 15¢c3—3.
            (J) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3—1 and the

                Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3—3.
          O      (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
          iX     (1) An Oath or Affirmation.

          0 (m) A copy of the SIPC Suppiemental Report.
          O (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit.

          **For conditions of confidential treatment of certain portions of this filing, see section 240.17a—5(e)(3).

NYLIFE Securities Inc.
(An affiliate of New York Life Insurance Company)
Statement of Financial Condition
December 31, 2005

NYLIFE Securities Inc.
{An affiliate of New York Life Insurance Company)
December 31, 2005


Report Of IndepeNMG@Nt AUGIEOFS...........02222220222220021eerevevrrrerrrrrrrersrrrrrr es ree rerrererserrr ce rerrersrrererrerrerrerscerererseerees 1

Financial Statements

Statement Of FiAANCIAL CONAUIMIONM ..........202202.0e2202e0erv es e se rrere es e es ererre es ts es erricreerrrarrrrsersrearrserrrere esnb es e rrerrrrenek 2

Notes to Statement Of FiN@NCI@L COMUIAtON .............c2222020seves es erersrvererersrrsrrrersrrererverecrererversrerrrerrer in e se rrrrenes 3—6

                                                                                     PricewaterhouseCoopers LLP
                                                                                     PricewaterhouseCoopers Center
                                                                                     300 Madison Avenue
                                                                                     New York NY 10017
                                                                                     Telephone (646) 471 3000
                                                                                     Facsimile (813) 286 6000

                                  Report of Independent Auditors

To the Board of Directors
and Stockholder of
NYLIFE Securities Inc.:

In our opinion, the accompanying statement of financial condition presents fairly, in all material
respects, the financial position of NYLIFE Securities Inc. (the "Company") at December 31, 2005, in
conformity with accounting principles generally accepted in the United States of America, This
financial statement is the responsibility of the Company‘s management. Our responsibility is to express
an opinion on this financial statement based on our audit. We conducted our audit of this statement in
accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statement is free of material misstatement. An audit includes examini{lg, on a test basis,
evidence supporting the amounts and disclosures in the financial statement, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.

             ui ujerjaAm lroy, is
March 10, 2006

NYLIFE Securities Inc.
(An affiliate of New York Life Insurance Company)
Statement of Financial Condition
December 31, 2005

Cash and cash equivalents                                                                   $   10,098,275
Receivable from NYLIFE Distributors LLC                                                          4,923,996
Receivable from affiliates                                                                          60,645
Commissions receivable                                                                           2,291,040
Federal income taxes receivable from New York
  Life Insurance Company                                                                           237,271
Fee income receivable                                                                              420,000
Investments, at market value                                                                       692,499
Prepaid expenses                                                                                   542,182
Fixed assets (net of accumulated depreciation of $4,874,067)                                       475,698
Deferred tax asset                                                                               1,451,603
         Total assets                                                                       $   21,193,209
Liabilities and Stockholder‘s Equity
  Payable to New York Life Insurance Company                                                $    3,433,009
  Accrued commission expense                                                                     3,076,410
  Accrued litigation expense                                                                     2,634,722
  Other accrued liabilities                                                                      _ 208,498
         Total liabilities                                                                       9,352,639
Total stockholder‘s equity                                                                      11,840,570
         Total liabilities and stockholder‘s equity                                         $   21,193,209

                 The accompanying notes are an integral part of this financial statement.


NYLIFE Securities Inc.
(An affiliate of New York Life Insurance Company)
Notes to Statement of Financial Condition
December 31, 2005

1.    Organization and Business

     NYLIFE Securities Inc. (the "Company"), a wholly owned subsidiary of NYLIFE LLC (a wholly
     owned subsidiary of New York Life Insurance Company, ("NYLIC")) is registered with the
     Securities and Exchange Commission as a broker—dealer and is a member of the National
      Association of Securities Dealers, Inc.

      The Company has entered into a soliciting dealer agreement with NYLIFE Distributors LLC
      ("Distributors"), a wholly owned subsidiary of New York Life Investment Management Holdings
      LLC, whereby the Company charges Distributors commissions for sales of the MainStay Funds by
      the Company‘s registered representatives, for which the Company‘s registered representatives are
      generally paid commissions.

      Under various contractual agreements with unrelated financial institutions, the Company receives
      commissions from the financial institutions for sales of open—end mutual fund products, for which
      the Company‘s registered representatives are generally paid commissions.

      The Company receives commissions for acting as introducing broker for clients and uses a non—
      affiliated clearing broker, on a fully disclosed basis, to perform trade execution, clearance,
      settlement and related activities.

      The Company, under an agreement with New York Life Insurance and Annuity Corporation
      ("NYLIAC®"), a wholly owned subsidiary of NYLIC, directs and supervises NYLIAC‘s sale of
      variable annuity contracts and variable life insurance policies through separate accounts maintained
      by NYLIAC. The Company‘s expenses incurred in connection with the offering of these products
      are billed to NYLIC.

2.    Summary of Significant Accounting Policies

      The preparation of financial statements in conformity with generally accepted accounting
      principles requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
      financial statement. Actual results could differ from those estimates.

      Securities transactions are recorded on trade date.

      Investments are valued at market value.

      Short—term investments with original maturities of three months or less are considered cash
      equivalents. At December 31, 2005, such short—term investments consist of commercial paper
      carried at its amortized cost of $9,813,741, which approximates market value.

      Fixed assets are recorded at cost and depreciated using the straight—line method over estimated
      useful lives of three to ten years. Assets acquired in 2000 and prior have been depreciated utilizing
      a half—year convention. Cost of assets sold or retired and the related amounts of accumulated
      depreciation are eliminated from the accounts in the year of disposal.

NYLIFE Securities Inc.
{An affiliate of New York Life Insurance Company)
Notes to Statement of Financial Condition
December 31, 2005

      Current income taxes are provided on taxable earnings at the appropriate statutory rate applicable
      to such earnings. Deferred income taxes are provided for temporary differences between the
      financial reporting and tax basis of assets and liabilities.

3.    Related Parties Transactions

      Investments, at market value on the statement of financial condition consists of shares in an
      affiliated mutual fund, the MainStay Equity Index Fund.

      Commissions receivable and accrued commission expense on the statement of financial condition
      includes $850,635 and $2,574,243, respectively, of transactions with affiliates.

      The Company is party to a service agreement with NYLIC, whereby NYLIC provides services to
      the Company. The Company is charged for these services based upon separately identifiable actual
      costs incurred where NYLIC acts as paymaster on behalf of the Company. The services include
      personnel, office space, other services, and administrative. The Company is also charged
      administrative expenses from NYLIC which are specifically identifiable to the Company or
      incurred by NYLIC principally through analyses of time spent on matters relating to the Company
      or pursuant to agreed upon formulas.

4.    Credit Risk

      The Company introduces all of its securities transactions to a clearing broker on a fully disclosed
      basis. Pursuant to the terms of the agreement between the Company and the clearing broker, the
      clearing broker has the right to charge the Company for losses that result from a customer‘s failure
      to fulfill its contractual obligations.

      As the right to charge the Company has no maximum amount and applies to all trades executed
      through the clearing broker, the Company believes there is no maximum amount assignable to this
      right. At December 31, 2005, the Company has recorded no liabilities with regard to this right.

      In addition, the Company has the right to pursue collection or performance from the customers who
      do not perform under their contractual obligations. The Company monitors the credit standing of
      the clearing broker and all customers with which it conducts business.

5.    Income Taxes

      The Company is a member of an affiliated group which joins in the filing of a consolidated federal
      income tax return with NYLIC. Estimated payments for taxes are made between the members of
      the consolidated group during the year. State and local returns are filed separately; minimum taxes
      are paid to state and local jurisdictions.

NYLIFE Securities Inc.
(An affiliate of New York Life Insurance Company)
Notes to Statement of Financial Condition
December 31, 2005

      At December 31, 2005 the Company has a net deferred tax asset of $1,451,603 attributable to the
      following temporary differences between the financial reporting and the tax basis of assets and

      Gross Deferred Tax Assets
      Accrued                                                                            $    854,624
      Depreciation                                                                            669,153
                 Gross deferred tax asset                                            .       1,523,777
      Gross Deferred Tax Liabilities
      Unrealized investment loss                                                              (66,230)
      Loss on disposal of assets                                                               (5,944)
                 Gross deferred tax liability                                                  (72,174)
                Net deferred tax assets                                                  $   1,451,603

      As of December 31, 2005, the Company has state and local net operating losses of approximately
      $7,120,000, which will expire between 2007 and 2024. The 2005 deferred tax asset relating to net
      operating losses is approximately $356,000. A full valuation allowance against the deferred tax
      asset relating to the net operating losses has been established based on management‘s belief that it
      is more likely than not that the deferred tax asset will not be realized. The Company does not have
      any federal net operating losses as they were fully utilized in the group‘s consolidated tax return.

      The Company is reimbursed for its deferred tax assets on an annual basis to the extent they are
      utilized in the group‘s consolidated tax return through a tax allocation agreement with its parent. A
      valuation allowance against the Company‘s other deferred tax assets is not considered necessary
      because it is more likely than not that those deferred tax assets will be realized.

6.    Net Capital Requirements

      The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule
      ("Rule 15¢c3—1"), which requires the maintenance of minimum net capital. The Company has
      elected to compute its net capital requirement in accordance with the Alternative Method permitted
      by the rule. This method requires the maintenance of minimum net capital, as defined, of the
      greater of 2% of aggregate debit items arising from customer transactions or $250,000. At
      December 31, 2005, the Company had net capital, as defined under such rules, of $3,952,716
      which was $3,702,716 in excess of its required net capital of $250,000.

7.    Contingencies

      In the normal course of business, the Company has been named a defendant in various legal
      matters. The Company is also from time to time involved in governmental, administrative, and
      investigative proceedings and inquiries. Notwithstanding the uncertain nature of litigation and
      regulatory inquiries, the outcome of which cannot be predicted, the Company believes that, after
      provisions made in the financial statements, the ultimate liability that could result from litigation

NYLIFE Securities Inc.
(An affiliate of New York Life Insurance Company)
Notes to Statement of Financial Condition
December 31, 2005

     and proceedings would not have a material adverse effect on the Company‘s financial position;
     however, it is possible that settlements or adverse determinations in one or more actions or other
     proceedings in the future could have a material adverse effect on the Company‘s operating results
      for a given year.

     NYLIFE Securities Inc. is a member of the Securities Investor Protection Corporation.

Document Created: 2019-05-23 18:45:36
Document Modified: 2019-05-23 18:45:36
9999999997-06-025931.paper AUTO-GENERATED PAPER DOCUMENT

ENT> X-17A-5 1 9999999997-06-025931.paper AUTO-GENERATED PAPER DOCUMENT This document was generated as part of a paper submission. Please reference the Document Control Number 06005584 for access to the original document.
Additional Files
9999999997-06-025931.txt   Complete submission text file   2051

© 2019
SEC CFR Title 17 of the Code of Federal Regulations.