FOCUS Report Vestech Securities, Inc.

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

Published: 2017-04-20 15:34:24
Submitted: 2017-04-20
Period Ending In: 2016-06-30
scanned.pdf Scanned paper document


                                                              17017152                                              OMB APPROVAL
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                                            NNUAL AUDITED REPORT
                                               FORM X-17A-5                                                               I SEC FILE NUM ER
                                                  PART III                                                                s- 4gz4o
       16                                      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 07/01/2015                                            AND ENDING 06/30/2016
                                                              MM/DD/YY                                              MM/DD/YY

                                      A. REGISTRANT IDENTIFICATION

NAME OF BROKER-DEALER: V~S~.h                     cSeCvt'I ileS, Ir1C,                                            OFFICIAL USE ON Y

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)                                                         FIRM I.D. NO.
11477 Olde Cabine Rd. STE 310
                                                           (No. and Street)
                     St. LMWS                                       MI®                                      63141
                     (City)                                        (State)                                   (Zip Code)

NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
John Huang                                                                                                      314.828.2111
                                                                                                              (Area Code - Telephone Nunibcr)

                                     B. ACCOUNTANT IDENTIFICATION                                                                            i

INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

Moss Adams LLP
                                               (Name - ifindividual, stale lust, first, middle name)

      8750 N. Central Expressway, STE 300             Dallas                                           TX                      75231-6464
      (Address)                                      (City)                                        (State)                     (Zip Cudc)

CIIECK ONE:

         Fi/~Certitied Public Accountant
              Public Accountant

              Accountant not resident in United States or any of its possessions.

                                               FOR OFFICIAL USE ONLY                                                                        -1




*Claimsjot- exemption front the requirement that the annual report be cohered by the opinion ol'an independent public accountant
mut i be supported by a statement ojjacts and eircumsianees relied on as the hasisfor the exemption. See Section 240. l7a-?(e)(2)



                               Potential persons who are to respond to the collection of
                               information contained in this form are not required to respond
   SEC 1410 (06-02)            unlessthe form displays acurrentlyvalid OMB control number.


                                               OATH OR AFFIRMATION

     John Huang                                                                ,swear (or affirm) that, to the best f
    _
my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
 Vestech Securities, Inc.                                                                                             as
tt l June 30                                        .2016         aretrue and correct. 1 further swear (or affirm) thlt
neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account
classified solely as that of customer, except as follows:




             Notary Public - Notary Seal
                 State of Missouri                                                   Sign
         Commissloned for St o_ouls County
        My Commisslon Expires: April 18,2020
          Commisslon Number,-12421187                                              TcC'lOK ,C C D
                                                                                      Title


                Notary Public

This report ** contains (check all applicable boxes):
    (a) Facing Page.
Q~ (b) Statement of Financial Condition.
® (c) Statement of Income (Loss).
© (d) Statement of Changes in Financial Condition.
® (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
TX7 (t) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
® (g) Computation of Net Capital.
    (h) Computation for Determination of Reserve Requirements Pursuant to Rule 150-3.
❑ (1) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
    6) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 150-1 and the
        Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
    (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
        consolidation.
© (1) An Oath or Affirmation.
    (m) A copy of the SIPC Supplemental Report.
❑ (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit.

**For conditions ofewilidential treatment ofc•ertain portions ofthisfiling, see section 240.17a-5(e)(3).


    VESTECH SECURITIES, INC.

REPORT PURSUANT TO RULE 17a-5(d)

    YEAR ENDED JUNE 30, 2016


                                                                                   i




                                                                                                    WWW.MOSSAOAMS.COM

                                       ........                                     8750 North Central Expressway, Suite 300
                                                                                                            nalias, TX 752.37
                                                                                         T 197213B7-4300 F 1214; 242-7488




                      REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Vestech Securities, Inc.

We have audited the accompanying statement of financial condition of Vestech Securities, Inc. (the "Company") as
of June 30, 2016, and the related statements of income, changes in stockholder's equity, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Vestech Securities, Inc. as of June 30, 2016, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 9 to the financial statements, the Company has earned a narrow profit margin for the
year ended June 30, 2016 and the Company's ability to sustain positive cash flows depends on a variety of factors,
including the success of the financial markets and the retirement industry. These matters raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard to these matters are also described in
Note 9. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty. Our opinion is not modified with respect to this matter.

The supplementary information in Schedule I and lI (the "Supplemental Information") has been subjected to audit
procedures performed in conjunction with the audit of Company's financial statements. The Supplemental
Information is the responsibility of the Company's management. Our audit procedures include determining whether
the Supplemental Information reconciles to the financial statements or the underlying accounting and other
records, as applicable, and performing procedures to test the completeness and accuracy of the Supplemental
Information. In forming our opinion on the Supplemental Information, we evaluated whether the Supplemental
Information, including its form and content is presented in conformity with 17 C.F.R.§ 240.17a-5. In our opinion, the
supplementary information in Schedule I and 11 is fairly stated in all material respects in relation to the financial
statements as a whole.


      X010/ ✓~~Rww„a,~

Dallas, Texas  l
September 7, 2016




                                                                                                               Praxit`Y
                                                                                                                -1St.1. ->t€ht:..",E OF
                                                                                                               ~N is ."Kh'DENT Y MMS


                                    VESTECH SECURITIES, INC.
                                  Statement of Financial Condition
                                          June 30, 2016



                                               ASSETS


   Cash                                                                       $     2,056
   Deposit with Clearing Organizations                                            63,740
   Due from Other Broker Dealers                                                  16,563
   Advisory Fees and Concessions Receivable                                       32,759
   Other Receivables                                                              18,786
   Stockholder Note Receivable                                                     S,005
   Property and Equipment, Net                                                     5,467
   Security Deposit                                                                2,000


          TOTAL ASSETS                                                        $ 146,376



                        LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
   Accounts Payable                                                           $    4,599
  Commissions Payable                                                             14,376
   Other Accrued Liabilities                                                       7,998
   Deferred Rent                                                                   5,652
   Non-Owner Capital Contribution                                                 35,000


          TOTAL LIABILITIES                                                       67,625



STOCKHOLDER'S EQUITY
  Common Stock, no par, 100,000 authorized
     1,000 shares issued and outstanding                                           1,000
  Paid-in Capital                                                                 60,002
   Retained E6rnings                                                              17,749


          TOTAL STOCKHOLDER'S EQUITY                                              78,751



TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                                   $ 146,376




              The accompanying notes are an integral part of these financial statements.

                                               Page 2


                                   VESTECH SECURITIES, INC.
                                      Statement of Income
                                For the Year Ended June 30, 2016




REVENUES
       Commission and Concession Income                                                 99,096




                                                                                   $
       Investment Advisory Fees                                                         90,409
       Other Revenues                                                                    5,021
TOTAL REVENUES                                                                         194,526



EXPENSES
       Broker Commissions                                                               18,316
       Wages and Salaries                                                               49,940
       Legal and Professional Fees                                                      26,446
      Clearing Expenses                                                                 15,339
      Communications                                                                    2,361
       Regulatory Dues       Fees                                                       16,723
                         &
       Rent                                                                             17,260
      Other Expenses                                                                    13,590
TOTAL OPERATING EXPENSES                                                               159,975



INCOME BEFORE INCOME TAXES                                                              34,551
PROVISION FOR INCOME TAXES


NET INCOME                                                                        $ 34,551




           The accompanying notes are an integral part of these financial statements.

                                            Page 3


                                        VESTECH SECURITIES, INC.
                               Statement of Changes in Stockholder's Equity
                                    For the Year Ended June 30, 2016




                              Common
                            Stock Shares         Common              Paid-in        Retained
                               Issued             Stock              Capital        Earnings      Total


Balance at June 30, 2015          1,000         $    1,000       $ 55,402          $ (16,802)   $ 39,600

Shareholder Contributions                                              4,600                       4,600

Net Income                                                                           34,551       34,551

Balance at June 30, 2016         1,000         $     1,000       $    60,002       $ 17,749     $ 78,751




                   The accompanying notes are an integral part of these financial statements.
                                                  Page 4


                                           VESTECH SECURITIES, INC.
                                            Statement of Cash Flows
                                       For the Year Ended June 30, 2016




OPERATING ACTIVITIES
        Net Income                                                                             34,551




                                                                                         $
        Adjustments to reconcile net income to net cash provided (used) by operations:
           Depreciation Expense                                                                   497
           Deferred Rent                                                                        5,652
          (Increase) decrease in assets:
             Deposits with Clearing Organization                                              (48,737)
             Due from Other Broker Dealers                                                    (12,415)
             Advisory Fees and Concessions Receivable                                         (14,539)
             Other Receivables                                                                (17,434)
          (Increase) decrease in liabilities:
             Accounts Payable                                                                  (7,198)
             Commissions Payable                                                               13,376
             Accrued Liabilities                                                                7,764
Net cash provided (used) by Operating Activities                                              (38,481)


INVESTING ACTIVITIES
        Property and Equipment Purchases                                                       (5,964)
        Security Deposit Payment                                                               (2,000)
Net cash provided (used) by Investing Activities                                               (7,964)


FINANCING ACTIVITIES
        Capital Contribution                                                                    4,600
        Contribution from Non-owner                                                            35,000
Net cash provided (used) by Financing Activities                                               39,600


Net increase (decrease) in cash                                                                (6,845)
Cash at beginning of year                                                                       8,901


Cash at end of year                                                                      $     2,056




                 The accompanying notes are an integral part of these financial statements.
                                                   Page 5


                                           VESTECH SECURITIES, INC.
                                         Notes to Financial Statements
                                                June 30, 2016


Note 1- Summary of Significant Accounting Policies

    Nature of Operations and Basis of Presentation
    Vestech Securities, Inc.(the "Company"), a Kansas corporation, was incorporated on March 13, 1996. It is a
    broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") and a member of
    the Financial Industry Regulatory Authority ("FINRA"). The Company operates under(SEC)Rule 156-3(k)(2)(ii),
    whereby a clearing broker-dealer performs clearing functions for all broker-dealer transactions with customers
    and brokers and dealers on a fully disclosed basis. The Company also has agreements for clearing functions
    with other various mutual funds and direct participation program brokers. The Company receives commissions
    on trades that are facilitated through the clearing broker-dealer and other brokers. The accounting and
    reporting policies of the Company conform to U.S. generally accepted accounting principles and to general
    practices within the securities industry.

    The Company is a Registered Investment Adviser with the SEC and as such performs financial services, advice,
    management and administration for private and corporate clients. During fiscal year ended June 30, 2016,the
    Company's primary office location changed from Wichita, Kansas to St. Louis, Missouri. Substantially all of the
    Company's business is conducted with customers located in Kansas and Missouri.

    Receivable from Broker-Dealers and Clearing Organizations
    Receivables from broker-dealers and clearing organizations are generally collected in full in the month
    following their accrual. Receivables from investment advisory fees are generated only from creditworthy
    accounts and are generally collected in full within 30 days after invoicing. Management records an allowance
    for bad debt based on a collectability review of specific accounts. Any receivables deemed uncollectable are
    written off against the allowance. As of June 30, 2016, no allowance for doubtful accounts was determined
    necessary.

    Property and Equipment
    Property and equipment are carried at cost less accumulated depreciation. Depreciation is recognized using
    the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years.
    Expenditures for repairs and maintenance and minor replacements are charged to expense incurred.

    Application Fees
    The Company incurs normal application fees in relation to its membership in the Financial Industry Regulatory
    Authority ("FINRA") and in the course of other business activities. Generally, normal application fees are
    expensed as incurred. For certain circumstances including changes in business operations, FINRA requires its
    member firms to file a continuing membership application ("CMA") and get FINRA approval prior to initiating
    changes. The fees for the CMA include a non-refundable $500 component, but the remainder of the fees can
    be refunded or waived under certain situations. The Company accounts for the non-refundable component of
    CMA fees as a liability and expense upon submission of a CMA. Upon payment of the full CMA fee, the
    Company eliminates its liability and records a prepaid expense for the remainder of the fee. FINRA's decision
    is effective upon service of notice to the applicant, as such, the Company recognizes the application process
    complete upon receipt of service by FINRA by adjusting the prepaid expense to zero and recognizing an expense
    for the remainder of the fee. As of June 30, 2016, the Company had a CMA in process for the addition of
    registered representatives beyond what is currently in the Company's FINRA membership agreement. The

                                                     Page 6


                                            VESTECH SECURITIES, INC.
                                          Notes to Financial Statements
                                                 June 30, 2016

Note 1- Summary of Significant Accounting Policies, continued

     total fee for this CMA was $10,000, of which $500 was accrued at June 30, 2016 and the remainder was
     recorded as a prepaid expense upon payment on July 20, 2016. This CMA has not yet been approved by FINRA.

    Revenue Recognition
    Security transactions and the related commission revenue and expense are recorded on a settlement date
    basis, which is generally the third business day following the transaction. If materially different, security
    transactions and their related commission income and expenses are recorded on a trade date basis.

     Investment advisory and wrap management fees are generally recognized as services are provided.
     Generally, fees are billed on a quarterly basis based on the account's asset value at the end of a quarter.
     Advance payments, if received, are deferred and recognized during the periods for which services are
     provided.

    Compensated Absences
    Compensated absences have not been accrued because the amount cannot be reasonably estimated.

    Income Taxes
    The Companyfiles as an "S" Corporation for federal and state income tax purposes. The Company's net income
    is taxed at the stockholder level rather than the corporate level for income tax purposes, and thus, no provision
    for income taxes has been made in the accompanying financial statements. Any interest or penalties
    associated with income taxes would be included as a component of income tax expense in the period in which
    the assessment arises.

    The Companyfiles income tax returns in the U.S.federal jurisdiction and in the State of Kansas. The Company's
    federal income tax returns generally remain subject to examination by the Internal Revenue Service for three
    years from the date the return is due, including extensions. The Company's state income tax returns are subject
    to examination by the respective state and local authorities for up to four years from the date of filing.

    Use of Estimates
    The preparation of financial statements in conformity with accounting principles generally accepted in the
    United States of America 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
    statements and the reported amounts of revenues and expenses during the reporting period. Actual results
    could differ from those estimates.

Note 2 - Net Capital Requirements

    Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is
    required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net
    capital ratio may fluctuate on a daily basis. At June 30, 2016 the Company had net capital of approximately
    $16,179 and net capital requirements of $5,000. The Company's ratio of aggregate indebtedness to net capital
    was 4.18 to 1. The Securities and Exchange Commission permits a ratio of no greater than 15 to 1.


                                                      Page 7


                                          VESTECH SECURITIES, INC.
                                        Notes to Financial Statements
                                               June 30, 2016


Note 3 -Possession or Control Requirements

    The Company does not have any possession or control of customer funds or securities. There were no
    material weaknesses in the procedures followed in adhering to the exemptive provisions of(SEC) Rule 15c3-
    3(k)(2)(ii) by promptly transmitting all customer funds and securities to the clearing broker who carries the
    customer accounts.

Note 4- Clearing Deposit

    The Company maintains a deposit account with Maplewood Investment Advisors, Inc.("Maplewood") and
    Sterne Agee & Leach, Inc.("Sterne") as part of the Company's contract for services. Maplewood and Sterne
    require a deposit for their services that serves as a reserve for counterparty credit risk, including default
    risk and settlement risk, as well as market risk to open un-hedged positions. As of June 30, 2016, the
    balance of the clearing deposits from Maplewood and Sterne were $13,740 and $50,000, respectively.

Note 5 - Related Party Transactions

    As of June 30, 2016 the Company had one stockholder who owned 100% of the Company. As of June 30,
    2016,the Company advanced a total of $5,005 to the stockholder. The note is unsecured, bears interest at
    3% per annum, and has no definite repayment terms. The Company has accrued interest receivable of
    $1,462 on the note receivable and the Company has unsecured advances of $14,589 due from its
    stockholder as of June 30, 2016, which are recorded in other receivables on the Statement of Financial
    Condition.

Note 6 - Property and Equipment

    The classes of property and equipment are as follows:

               Furniture and Equipment                   $      12,891
                 Less: Accumulated Depreciation                  7,424
                                                          $      5,467

    Depreciation and amortization expense for the year ended June 30, 2016 was $497 and is reflected in other
    expenses.

Note 7 - Operating Lease

    The Company leased office space in Wichita, Kansas under a lease from a related party which was terminated
    early with no penalty as of June 30, 2016. On March 15, 2016, the Company entered into a new lease
    agreement for office space in St. Louis, Missouri. The lease commencement date began on April 15, 2016,
    with no payment due for the first 60 days. The lease term is for 50 months, with two options to extend the




                                                    Page 8


                                            VESTECH SECURITIES, INC.
                                          Notes to Financial Statements
                                                 June 30, 2016



Note 7 - Operating Lease, continued

    lease for 3 years each. The Company recognizes rent expense on a straight-line basis over the lease term.
    Total rent expense was $17,260 for the year ended June 30, 2016.

    The following is a schedule by years of future minimum rental payments required under operating leases that
    have initial or remaining non-cancelable lease terms in excess of one year:

                     Year Ending
                      June 30,
                        2017                                                                 24,225




                                                                                         $
                        2018                                                                 36,515
                        2019                                                                 36,515
                        2020                                                                 37,646

                         Total:                                                              134 901

Note 8 - Non-Owner Capital Contribution

    In February, 2016, the Company received a capital infusion of $35,000 from a director of the Company who
    was a non-owner at that time. On July 5, 2016,the Company issued stock to the director, which resulted in the
    capital infusion being allowable owner's equity for net capital purposes.

Note 9 - Going Concern

    As shown in the financial statements,the Company has earned a narrow profit margin as of June 30,2016. The
    Company's ability to sustain positive cash flows depends on a variety of factors, including the success of the
    financial markets and the retirement industry. These matters raise concern about the sustainability of the
    Company to continue as a going concern. Management has taken steps to increase the Company's net capital
    and to reduce certain expenses. The financial statements do not contain any adjustments that might result
    from the outcome of the uncertainties. The Company's stockholder intends to contribute additional capital
    and/or defer future direct compensation as needed to fund the operations of the Company.

Note 10 -Commitments and Contingencies

    Litigation
    The Companyfrom time to time may be involved in litigation relating to claims arising out of its ordinary course
    of business. Management believes that there are no claims or actions pending or threatened against the
    Company,the ultimate disposition of which would have a material impact on the Company's financial position,
    results of operations or cash flows.




                                                     Page 9


                                             VESTECH SECURITIES, INC.
                                           Notes to Financial Statements
                                                   June 30, 2016


Note 10 -Commitments and Contingencies, continued

    FIN RA Audit
    The Company recently completed a FINRA cycle exam on July 1,2016. Exceptions and recommendations were
    noted with regards to operational and supervisory controls. Management is adhering its responsibility to
    comply with appropriate securities rules and regulations and is implementing changes in its policies and
    procedures to achieve effective controls.

    Risk Management
    The Company maintains various forms of insurance that the Company's management believes are adequate
    to reduce the exposure to these risks to an acceptable level.

    Clearing Agreement
    Included in the Company's clearing agreements with its clearing broker-dealers are indemnification clauses.
    The clauses relate to instances where the Company's customers fail to settle security transactions. In the event
    this occurs, the Company will indemnify the clearing broker-dealers to the extent of the net loss on any
    unsettled trades. At June 30, 2016, management of the Company had not been notified by the clearing broker-
    dealers, nor were they otherwise aware, of any potential losses relating to this indemnification.

    Joint Supervision for dual Registration Agreement
    The Company is in the process of completing a transaction with another broker dealer, IBN Financial Services
    (IBN), in order to allow the Company's registered representatives the ability to offer certain investment
    products on IBN's platform and vice versa. In order to consummate the transaction, the Company and IBN
    have agreed to both issue a share of common stock to each other. Additional minor details are still in process
    of being completed. Overall, the transaction is not expected to have a material impact on the Company's
    balance sheet. As amounts are expected to initially be insignificant and certain information is still not estimable
    by management, no amounts have been recorded for this transaction through June 30, 2016.

Note 11-Subsequent Events

    As indicated in Note 9,the Company issued 250 shares of common stock to a director, resulting in a previously
    paid in capital infusion of $35,000 to be allowable owner's equity for net capital purposes.

    In July 2016,the Company's stockholder paid $18,596 in Advances and Receivables due from him, all of which
    were treated as unallowable for net capital as of June 30, 2016.

    Through August 31, 2016, the Company collected all of its advisory and concessions receivable, of which
    $31,314 was determined to be unallowable for net capital purposes as of June 30, 2016.

    As a result of the transactions noted above, the Company recognized an increase in net capital of $84,910 in
    the period subsequent to June 30, 2016.




                                                      Page 10


 Supplementary Information

 Pursuant to Rule 17a-5 of the

Securities Exchange Act of 1934

      As of June 30, 2016




          Page 11


                                            Schedule I

                                  VESTECH SECURITIES, INC.
                        Computation of Net Capital Under Rule 156-1
                         of the Securities and Exchange Commission
                                      As of June 30, 2016




COMPUTATION OF NET CAPITAL


Total Allowable Owner Equity for Qualified Net Capital                    78,751




                                                                      $
Deductions and/or Changes:
   Non-Allowable Assets:
              Advisory Fees and Concessions Receivable                    31,314
              Other Receivables                                           18,786
              Stockholder Note Receivable                                  5,005
              Property and Equipment, Net                                 5,467
              Security Deposit                                             2,000
   Total Non-Allowable Assets                                             62,572


Net Capital Before Haircuts on Securities Positions                       16,179
Haircuts on Securities (Pursuant to Rule 15c-3-1(f))


Net Capital                                                           $   16,179



                                 AGGREGATE INDEBTEDNESS


Items Included in Statement of Financial Condition
  Accounts Payable                                                    $    4,599
  Commissions Payable                                                     14,376
  Other Accrued Liabilities                                               7,998
  Deferred Rent                                                           5,652
  Non-Owner Capital Contribution                                          35,000


Total Aggregate Indebtedness (AI)                                     $   67,625




                                            Page 12


                                        Schedule I (continued)

                                       VESTECH SECURITIES, INC.
                             Computation of Net Capital Under Rule 15c3-1
                              of the Securities and Exchange Commission
                                           As of June 30, 2016


                    COMPUTATION OF BASIC NET CAPITAL REQUIREMENT

   Minimum Net Capital Required (6 2/3% of total Al)                              4,508




                                                                            $
   Minimum Net Capital Requirement for IBD                                        5,000




                                                                            $
   Net Capital Requirement (Greater of the two above)                             5,000




                                                                            $
   Net Capital Above the Required Minimum                                        11,179




                                                                            $
  Ratio: Al to Net Capital                                                         4.18



RECONCILIATION WITH COMPANY'S COMPUTATION

The differences in the computation of net capital under Rule 15c3-1 from the Company's computation
are as follows:

  Net Capital per the Company's unaudited FOCUS IIA                         $     77,403
  Reclass of non-owner contribution from equity to liabilities                  (35,000)
  Net adjustments to receivables                                                   9,304
  Additional receivables determined to be unallowable                           (31,465)
  Net adjustments to accounts payable and accrued liabilities                      1,589
  Deferred rent adjustments                                                      (5,652)


   Net Capital per the audited report                                       $   16,179




                                              Page 13


                                                Schedule II

                                       VESTECH SECURITIES, INC.
                     Computation for Determination of Reserve Requirement Under
                        Rule 1Sc3-3 of the Securities and Exchange Commission
                                          As of June 30, 2016




EXEMPTIVE PROVISIONS

The Company has claimed an exemption from Rule 15c3-3 under Section (k)(2)(ii), in which all customer
transactions are cleared through another broker-dealer on a fully disclosed basis.


Company's clearing firms:

        National Financial Services Corporation, LLC
        Sterne Agee & Leach, Inc.




                                                 Page 14


Report of Independent Registered Public Accounting Firm

         On Management's Exemption Report

              Required by SEC Rule 17a-5

               Year Ended June 30, 2016




                       Page 15


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                                  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



                     To the Board of Directors
                     Vestech Securities, Inc.

                     We have reviewed management's statements, included in the accompanying exemption report, in which
                     (1) Vestech Securities, Inc. (the "Company') identified provision 17 C.F.R. § 156-3(k)(2)(ii) (the
                     "exemption provisions") under which the Company claimed an exemption from 17 C.F.R. § 240.156-3
                     and (2) the Company stated that the Company met the identified exemption provisions throughout the
                     most recent fiscal year without exception. The Company's management is responsible for compliance
                     with the exemption provisions and its statements.

                     Our review was conducted in accordance with the standards of the Public Company Accounting
                     Oversight Board (United States) and, accordingly, included inquiries and other required procedures to
                     obtain evidence about the Company's compliance with the exemption provisions. A review is
                     substantially less in scope than an examination,the objective of which is the expression of an opinion on
                     management's statements. Accordingly, we do not express such an opinion.

                     Based on our review, we are not aware of any material modifications that should be made to
                     management's statements referred to above for them to be fairly stated, in all material respects, based
                     on the conditions set forth in paragraph (k)(2)(ii) of Rule 156-3 under the Securities Exchange Act of
                     1934.




                     Dallas, Texas
                     September 7, 2016




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                                VESTECH SECURITIES, INC.
     WIV



August 23, 2016

Vestech Securities, Inc.
SEC Filing 48-49409
Firm Ott 41409
For the Year ended June 30, 2016



                                          EXEMPTION REPORT

In accordance with the requirements of SEC Rule 17a-5(d)(4)(i)-(iii), I, John Huang, certify and attest, to
the best of my knowledge and belief that the following statements are true and correct with regard to
Vestech Securities, Inc.:

    1. Vestech Securities, Inc. claimed an exemption from SEC Rule 15c3-3 under provision 15c3-
       3(k)(2)(ii) throughout the most recent fiscal year, in that it is an introducing broker or dealer
       who clears all transactions with and for customers on a fully disclosed basis with clearing broker
       or dealers, and it promptly transmits all customer funds and securities to the clearing broker or
       dealers which carry all of the accounts of such customers and maintain and preserve such books
       and records pertaining thereto pursuant to the requirements of § 240.17a-3 and 240.17a-4, as
       are customarily made and kept by clearing broker or dealers and;

    2. Vestech Securities, Inc. met the above exceptive provisions in SEC Rule 15c3-3(d)(2)(ii)
       tl~roAghout the fiscal year without exception.




John Hua4 irector / CCO
1147' Olde abin Road
Suite 310
St. Louis, MO 63141




11477 Olde Cabin Rd Suit3 310, St. Louis MO 63141          Ph. 314.828.2111         Fax 314.261.9188
8100 E. 22"d St. N Suite 600-8, Wichita KS 67226           Ph. 316.686.6222         Fax 316.686.1511



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