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New words:
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accessible, accuracy, aimed, al, Algomi, alleging, analogizing, analyze, appeal, appealing, apportionment, approve, area, argument, Article, assistance, Banco, Bogot, California, capable, capture, Cayman, center, Chancellor, CLOB, comparability, conflict, continuation, Coupon, Daycoval, dealer, deeply, define, depending, disaster, discounting, documented, driver, EBITDA, employer, enable, enforceable, entirety, equally, equipped, exercised, facilitated, failover, faster, fiduciary, formation, found, fraction, GP, harming, hearing, individual, inevitable, LCH, Legacy, lend, length, Lori, margining, Match, mechanism, Merchant, month, necessitated, Northern, OCI, operative, oral, PCD, pension, percent, Pipe, prenegotiated, pretax, principally, priority, Protected, qualifying, quality, quoted, redundant, refrain, refraining, relaxed, Replicated, Representative, reversal, ruling, running, SAM, seeking, selection, servicing, ship, site, soliciting, sought, Stephen, stronger, tested, therefrom, Title, training, treated, trial, unadjusted, unissued, unquantified, verified, Vice, VII, Wellington
Financial report summary
?Competition
Aon • CME Group Inc - Ordinary Shares • MarketAxess • Rodin Income Trust • Rodin Global Property Trust • Tradeweb Markets Inc - Ordinary Shares Cls A • XP Inc - Ordinary SharesRisks
- Our business, financial condition, results of operations and prospects have been and may continue to be affected both positively and negatively by conditions in the global economy and financial markets generally.
- Downgrades of sovereign credit ratings, sovereign debt crises, or a decrease in the integrity of capital markets may have material adverse effects on the financial markets and general economic conditions, as well as our businesses, financial condition, cash flows, results of operations and prospects.
- Actions taken by governments in response to inflation rates may have a material impact on our business.
- If we are unable to identify and successfully exploit new product, service and market opportunities, including through hiring new brokers, salespeople, managers, technology professionals and other front-office personnel, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.
- We may pursue opportunities including new business initiatives, strategic alliances, acquisitions, mergers, investments, dispositions, joint ventures or other growth opportunities or transformational transactions (including hiring new brokers and salespeople), which could present unforeseen integration obstacles or costs and could dilute our stockholders. We may also face competition in our acquisition strategy or new business plans, and such competition may limit such opportunities.
- While we have limited offerings linked to cryptocurrencies, such offerings or any future expansion of such business could expose us to technology, regulatory and financial risks.
- We have debt, which could adversely affect our ability to raise additional capital and obtain or maintain favorable credit ratings, limit our ability to react to changes in the economy or our business, expose us to interest rate risk, and prevent us from meeting our obligations under our indebtedness.
- Our Revolving Credit Agreement contains restrictions that may limit our flexibility in operating our business.
- Credit ratings downgrades could adversely affect our cost of capital and the availability of debt financing.
- Our acquisitions may require significant cash resources and may lead to a significant increase in the level of our indebtedness.
- We may incur substantially more debt or take other actions which would intensify the risks discussed herein.
- We may not have the funds necessary to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a change of control triggering event as required by the indentures governing these notes.
- The requirement to offer to repurchase the BGC Group 3.750% Senior Notes, the BGC Group 4.375% Senior Notes, and the BGC Group 8.000% Senior Notes, or the BGC Partners senior notes upon a “change of control triggering event” may delay or prevent an otherwise beneficial takeover attempt of us.
- Our business is geographically concentrated and could be significantly affected by any adverse change in the regions in which we operate.
- We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business.
- If our licenses or services from third parties are terminated or adversely changed or amended or contain material defects or errors, or if any of these third parties were to cease doing business or if products or services offered by third parties were to contain material defects or errors, our ability to operate our business may be materially adversely affected.
- Defects or disruptions in our technology or services could diminish demand for our products and services and subject us to liability.
- Malicious cyber-attacks and other adverse events could disrupt our business, result in the disclosure of confidential information, damage our reputation and cause losses or regulatory penalties.
- We may use artificial intelligence in our business, and challenges with properly managing its use could result in competitive harm, regulatory action, legal liability and brand or reputational harm.
- The loss of one or more of our key executives, the development of future talent and the ability of certain key employees to devote adequate time and attention to us are a key part of the success of our business, and failure to continue to employ and have the benefit of these executives may adversely affect our business and prospects.
- We may be unable to enforce post-employment restrictive covenants applicable to our employees.
- If we fail to implement and maintain an effective internal control environment, our operations, reputation and stock price could suffer, we may need to restate our financial statements, and we may be delayed or prevented from accessing the capital markets.
- The financial markets in which we operate are generally affected by seasonality, which could have a material adverse effect on our results of operations in a given period.
- The financial services industry in general faces potential regulatory, litigation and/or criminal risks that may result in damages or fines or other penalties as well as costs, and we may face damage to our professional reputation and legal liability if our products and services are not regarded as satisfactory, our employees do not adhere to all applicable legal and professional standards, or for other reasons, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
- We are subject to regulatory capital requirements on our regulated business, and a significant operating loss or any extraordinary charge against capital could materially adversely affect our ability to expand or, depending upon the magnitude of the loss or charge, even to maintain the current level of our business.
- Even after the award of permanent registration status to our SEFs, we will incur significant additional costs, our revenues may be lower than in the past and our financial condition and results of operations may be materially adversely affected by future events.
- Our energy and commodities activities, including those related to environmental and emission, power, oil, and natural gas products, subject us to extensive regulation, potential catastrophic events and other risks that may result in our incurring significant costs and liabilities.
- Our business, financial condition, results of operations and prospects could be materially adversely affected by new laws, rules, or regulations or by changes in existing law, rules or regulations or the application thereof.
- Extensive regulation of our business restricts and limits our operations and activities and results in ongoing exposure to potential significant costs and penalties, including fines, sanctions, enhanced oversight, increased financial and capital requirements, and additional restrictions or limitations on our ability to conduct or grow our business.
- Because competition for the services of brokers, salespeople, managers, technology professionals and other front-office personnel in the financial services industry is intense, it could affect our ability to attract and retain a sufficient number of highly skilled brokers or other professional services personnel, in turn adversely impacting our revenues, resulting in a material adverse effect on our business, financial condition, results of operations and prospects.
- We face strong competition from brokerages, exchanges, and other financial services firms, many of which have greater market presence, marketing capabilities and financial, technological and personnel resources than we have, which could lead to pricing pressures that could adversely impact our revenues and as a result could materially adversely affect our business, financial condition, results of operations and prospects.
- Consolidation and concentration of market share in the banking, brokerage, exchange and financial services industries could materially adversely affect our business, financial condition, results of operations and prospects because we may not be able to compete successfully.
- We are subject to various risks inherent in doing business in the international financial markets, in addition to those unique to the regulated brokerage industry.
- Credit ratings downgrades or defaults by us, Cantor or another large financial institution could adversely affect us or financial markets generally.
- Our activities are subject to credit and performance risks, which could result in us incurring significant losses that could materially adversely affect us.
- In emerging market countries, we primarily conduct our business on an agency and matched principal basis, where the risk of counterparty default, inconvertibility events and sovereign default is greater than in more developed countries.
- The rates business is our largest product category, and we could be significantly affected by any downturn in the rates product market.
- Due to our current customer concentration, a loss of one or more of our significant customers could materially harm our business, financial condition, results of operations and prospects.
- Our revenues and profitability could be reduced or otherwise materially adversely affected by pricing plans relating to commissions and fees on our trading platform.
- Reduced spreads in pricing, levels of trading activity and trading through market makers and/or specialists could materially adversely affect our business, financial condition, results of operations and prospects.
- We have market risk exposure from unmatched principal transactions entered into by some of our desks, as well as holdings of marketable equity securities, which could result in losses and have that could have a material adverse effect on our business, financial condition, results of operations, and prospects for any particular reporting period. In addition, financial fraud or unauthorized trading activity could also adversely impact our business, financial condition, results of operations and prospects.
- We may have equity investments or profit sharing interests in entities whose primary business is proprietary trading. These investments could expose us to losses that could adversely affect our net income and the value of our assets.
- Because our voting control is concentrated among the holders of our Class B common stock, the market price of our Class A common stock may be materially adversely affected by its disparate voting rights.
- Delaware law may protect decisions of our Board that have a different effect on holders of our Class A common stock and Class B common stock.
- Delaware law, our corporate organizational documents and other requirements may impose various impediments to the ability of a third party to acquire control of us, which could deprive investors in our Class A common stock of the opportunity to receive a premium for their shares.
- The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
- We are a holding company, and accordingly we are dependent upon distributions from BGC U.S. OpCo and BGC Global OpCo to pay dividends, taxes and indebtedness and other expenses and to make repurchases.
- If we were deemed an “investment company” under the Investment Company Act, the Investment Company Act’s restrictions could make it impractical for us to continue our business.
- The expected benefits of the Corporate Conversion may not be obtained.
- Changes to our equity-based compensation structure as a result of the Corporate Conversion may adversely affect our ability to recruit, retain, compensate and motivate some employees.
- We are controlled by Cantor and Mr. Lutnick, who have potential conflicts of interest with us and may exercise their control in a way that favors their interests to our detriment.
- Agreements between us and Cantor and/or its affiliates are between related parties, and the terms of these agreements may be less favorable to us than those that we could negotiate with third parties and may subject us to litigation.
- Purchasers of our Class A common stock, as well as existing stockholders, may experience significant dilution as a result of offerings of shares of our Class A common stock by us, and the perception that such sales could occur may adversely affect prevailing market prices for our stock.
- We may use the net proceeds from future offerings of our Class A common stock to repurchase shares from Cantor, our executive officers, other employees and others, which may render the proceeds unavailable for other purposes.
- Our operations are global and exchange rate fluctuations and international market events could materially adversely impact our business, financial condition, results of operations and prospects.
- Employee error or miscommunication could impair our ability to attract and retain customers and subject us to significant financial losses, legal liability, regulatory sanctions and penalties and reputational harm; moreover, misconduct is difficult to detect and deter, and error is difficult to prevent.
- Ongoing scrutiny and changing expectations from stockholders with respect to the Company’s corporate responsibility or ESG practices may result in additional costs or risks.
Management Discussion
- Total brokerage revenues increased by $185.8 million, or 11.3%, to $1,832.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Commission revenues increased by $183.2 million, or 14.3%, to $1,464.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Principal transactions revenues increased by $2.6 million, or 0.7%, to $368.1 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
- Our brokerage revenues from Energy and Commodities increased by $94.5 million, or 32.4%, to $386.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, which was primarily driven by strong double-digit growth across our energy complex and our environmental products, as well as our ship broking business.
- Our brokerage revenues from Rates increased by $60.9 million, or 11.1%, to $610.5 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, reflecting broad-based growth across interest rate derivative and cash products.