The Partnership files annual, quarterly, and current reports and other information with the SEC. The Partnership’s SEC filings are available to the public on the SEC’s website at www.sec.gov.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, and in particular Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of U.S. securities laws.  You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “will,” “should,” and other expressions which predict or indicate future events and trends and which do not relate to historical matters.  You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Partnership.  These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Partnership to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

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Some of the factors that might cause differences between forward-looking statements and actual events include, but are not limited to, the following: (1) general economic conditions;conditions, including an economic downturn or volatility in the U.S. and/or global securities markets; (2) regulatory actions; (3) changes in legislation or regulation, including new regulations under the Dodd-Frank Act;Act and any rules promulgated by the DOL; (4) actions of competitors; (5) litigation; (6) the ability of clients, other broker-dealers, banks, depositories and clearing organizations to fulfill contractual obligations; (7) changes in interest rates; (8) changes in technology;technology and other technology-related risks; (9) a fluctuation or decline in the fair value of securities; and (10) the risks discussed under Part I, Item 1A – Risk Factors.  These forward-looking statements were based on information, plans, and estimates at the date of this report, and the Partnership does not undertake to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

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PART I

The Partnership is subject to a number of risks potentially impacting its business, financial condition, results of operations and cash flows.  In addition to the risks and uncertainties discussed elsewhere in this Annual Report on Form 10-K, or in the Partnership’s other filings with the SEC, the following are some important factors that could cause the Partnership’s actual results to differ materially from results experienced in the past or those projected in any forward-looking statement.  The risks and uncertainties described below are not the only ones facing the Partnership.  Additional risks and uncertainties not presently known to the Partnership or that the Partnership currently deems immaterial could also have a material adverse effect on the Partnership’s business and operations.  If any of the matters included in the following risks were to occur, the Partnership’s business, financial condition, results of operations and cash flows could be materially adversely affected.

RISK RELATED TO THE PARTNERSHIP’S BUSINESS

MMARKETarket CONDITIONSonditions —As a part of the securities industry, a downturn in the U.S. and/or global securities markets historically has, and in the past had, andfuture could in the future have, a significant negative effect on revenues and could significantly reduce or eliminate profitability of the Partnership.Partnership.

General political and economic conditions and events such as U.S. fiscal monetary policy, economic recession, natural disasters, terrorist attacks, war, changes in local economic and political conditions, regulatory changes or changes in the law, or interest rate or currency rate fluctuations could create a downturn in the U.SU.S. and/or global securities markets.  The securities industry, and therefore the Partnership, is highly dependent upon market prices and volumes which are highly unpredictable and volatile in nature.  Events such as global recession, frozen credit markets, and institutional failures and government-sponsored bailouts of a number of large financial services companies, as well as debt ceiling debates, and sovereign credit downgrades, could make the capital markets increasingly volatile.  Weakened global economic conditions and an unsettled nature of financial markets, among other things, could cause significant declines in the Partnership’s net revenues which willwould adversely impact its overall financial results.

WithAs the Partnership’s composition of net revenue nowbecomes more heavily weighted towards asset-based fee revenue, than trade revenue as in the past, a decrease in the market value of assets due to market declines can causehave a much moregreater negative impact on the Partnership’s financial results than experienced in prior years, due to the fact that asset-based fees are earned on the value of the underlying client assets. Conversely, in times

Market volatility could also cause clients to move their investments to lower margin products, or withdraw them, which could have an adverse impact on the profitability of improved market conditions the Partnership’s asset-based fee revenue would be positively impacted due to the increase in the market value of assets on which fees are earned.Partnership.

In addition, the Partnership could experience a material reduction in volume and lower securities prices in times of unfavorable economic conditions, which would result in lower commissiontrade revenue, decreased margins and losses in dealer inventory accounts and syndicate positions.  This would have a material adverse impact on the profitability of the Partnership’s operations.

Financial markets continueFurthermore, if the market were to experience volatility anda downturn or the riskseconomy were to sustained global economic growth remain high. Furthermore,enter into a recession, the Partnership would be subject to increased risk of its clients being unable to meet their commitments, such as margin obligations if there was an economic recession.obligations.  If clients are unable to meet their margin obligations, the Partnership has an increased risk of losing money on margin transactions and incurring additional expenses defending or pursuing claims.  Developments such as lower revenues and declining profit margins could reduce or eliminate the Partnership’s profitability.

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LEGISLATIVEANDegislativeand REGULATORYegulatory INITIATIVESnitiatives —Newly adoptedProposed, potential and recently enacted federal and state legislation, rules and pending regulatory proposals intended to reform the financial services industryregulations could significantly impact the regulation and operation of the Partnership and its subsidiaries, its revenue and its profitability.subsidiaries.  In addition, such laws, rules and regulations may significantly alter or restrict the Partnership’s historic business practices, which could negatively affect its operating results.

The Partnership is subject to extensive regulation by federal and state regulatory agencies and by SROs, within the industry.SROs.  The Partnership operates in a regulatory environment that is subject to ongoing change and has seen significantly increased regulation in recent years.  The Partnership may be adversely affected as a result of new or revised legislation or regulations, changes in federal, state or foreign tax laws and regulations, or by changes in the interpretation or enforcement of existing laws and regulations.  The Partnership continues to monitor several regulatory initiatives and proposed, potential and enacted legislation and rules (“Legislative and Regulatory Initiatives”), including, but not limited to:

The Dodd-Frank Act.Act.  The Dodd-Frank Act, passed by the U.S. Congress and signed by the Presidentinto law in July 21, 2010, includes provisions that could potentially impact the Partnership’s operations.  Since the passage of the Dodd-Frank Act, the Partnership has not been required to enact material changes to its operations.  However, the Partnership continues to review and evaluate the provisions of the Dodd-Frank Act and the impending rules to determine what impact or potential impact itthey may have on the financial services industry, the Partnership and its operations.  Among the numerous potentially impactful provisions in the Dodd-Frank Act are: (i) pursuant to Section 913 of the Dodd-Frank Act, the SEC staff issued a study recommending a universal fiduciary standard of care applicable to both broker-dealers and investment advisers when providing personalized investment advice about securities to retail clients, and such other clients as the SEC provides by rule. The standard of conduct is expected to require the broker-dealer and investment adviser to act in the best interest of the client without regard to the financial or other interest of the broker-dealer or investment adviser providing the advice;rule; and (ii) pursuant to Section 914 of the Dodd-Frank Act, a new SRO is expected to be proposed to regulate investment advisers.advisers could be proposed.  In addition, the Dodd-Frank Act contains new or enhanced regulations that could impact specific securities products offered by the Partnership to investors and specific securities transactions.  Proposed rules related to all of these provisions have not yet been adopted by regulators.  It is unclearThe Partnership cannot predict what impact any such rules, if adopted, would have on the Partnership.

Additionally, the Partnership continues to monitor several other proposed regulations and rules that do not presently appear as though they will have a material impact on the Partnership, such as Title X of the Dodd-Frank Act, which established the Bureau of Consumer Financial Protection with broad authority to issue new regulations, and proposed rules related to Section 956 of the Dodd-Frank Act, which would prohibit certain types of incentive-based compensation arrangements. In their present form, the Partnership does not believe these regulations and rules will have a material impact on the Partnership, but if revised the impact on the Partnership could be material.

It is expected that FINRA or other regulatory authorities will continue to issue rules related to the Dodd-Frank Act in the future and the Partnership will continue to monitor and review any such rules.

PART I

Department of Labor. Fiduciary Rule Proposal.  In 2010, the Department of Labor (the “DOL”)DOL proposed a modification to a rule that would have impacted the Employee Retirement Income Security Act’s definition of “fiduciary” and potentially limited certain of Edward Jones’ business practices.  In September 2011, the DOL announced that it was withdrawing the proposed rule and stated its intention to re-propose the rule in the future.  On April 20, 2015, the DOL published in the Federal Register its proposed rule on the definition of the term "fiduciary" and exemptions related thereto.  As proposed, the rule would impact qualified accounts, specifically, IRAs and other retirement accounts.  The DOL held public hearings on the proposed rule in August 2015.  

At this time, the DOL has not yet re-proposedpublished a final rule and has publicly expressed there will be changes to the proposal in the final rule.  As proposed, the rule butwould impact a significant portion of client assets under care.  As proposed, the Partnership expects such re-proposal to occur in the near future. The DOL has indicated that the re-proposed rule willwould have a material impact IRAs and has indicated an intention to address what has been generally described as “third party payments,” such as revenue sharing. The Partnership cannot predict what the re-proposed rule will say, what its scope will be, when or if it will be re-proposed or adopted, or what the impact will be on the Partnership. However, any such rule could impact the operations of Edward Jones and the profitability of the Partnership.

International Financial Reporting Standards. The International Accounting Standards Board developed a core set of accounting standards to act as a framework for financial reporting known as the International Financial Reporting Standards (“IFRS”). By 2007, the majority of listed European Union companies, including banks and insurance companies, began using IFRS to prepare financial statements. In contrast, the majority of public companies in the U.S. prepare financial statements under accounting principles generally accepted in the U.S. (“GAAP”).

The SEC is evaluating adoption of IFRS in the U.S. It is unclear at this time whether the SEC will propose mandatory adoption of IFRS or some other form of GAAP and IFRS harmonization.

The Partnership is currently waiting on further guidance from the SEC to determine what impact, if any, the adoption of IFRS in the U.S. could have on its financial position orPartnership's results of operations. If adopted, IFRS could significantly impact the way the Partnership determines income before allocations to partners, allocations to partners, or returns on partnership capital. In addition, switching to IFRS would be a complex endeavor for the Partnership. The Partnership may need to develop new systems and controls around the principles of IFRS and the specific costs associated with this conversion are uncertain.

Rule 12b-1 Fees. The Partnership receives various payments in connection with the purchase, sale and on-going servicing of mutual fund shares by its clients. Those payments include Rule 12b-1 fees (i.e., service fees) and expense reimbursements. Rule 12b-1, under the Investment Company Act of 1940, allows a mutual fund to pay distribution and marketing expenses out of the fund’s assets. The SEC currently does not limit the size of Rule 12b-1 fees that funds may pay. FINRA does impose such limitations. However, in July, 2010 the SEC proposed reform of Rule 12b-1. The proposal called for the rescission of Rule 12b-1 and a proposed new Rule 12b-2 which would allow funds to deduct a fee on an annual basis of up to 25 basis points to pay for distribution expenses without a cumulative cap on this fee. Additionally, the proposal includes other amendments that would permit funds to deduct an asset-based distribution fee in which the fund may deduct ongoing sales charges with no annual limit, but cumulatively the asset-based distribution fee could not exceed the amount of the highest front-end load for a particular fund. The proposed rule also allows funds to create and distribute a class of shares at net asset value and dealers could establish their own fee schedule. The proposal includes additional requirements for disclosure on trade confirmations and in fund documents. These proposed rules have not been enacted and the Partnership cannot predict with any certainty whether or which of these proposals will be enacted in their current form, revised form or not enacted at all.  In addition, the Partnership is committing significant resources to be prepared for the opportunities and challenges that will arise as a result of the final rule.  We are not yet able to determinepredict how the potential financialfinal DOL rules may differ from the proposed rules.  As such, the Partnership cannot predict at this time the full extent of any adverse impact on itsour operating results related to this proposed reform of Rule 12b-1. For further information onor the amount of Rule 12b-1 fees earned by the Partnership, see Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.overall financial services industry.    

PART I

Health Care Reform.The Patient Protection and Affordable Care Act, (“PPACA”)which was signed into law in March, 2010. PPACA requires employers2010, amended and revised by the Health Care and Education and Reconciliation Act of 2010 (collectively referred to provide affordable coverage with a minimum essential benefit to full-time employees or pay a financial penalty.as the “Affordable Care Act”).  The billAffordable Care Act contains provisions that go into effectwill be implemented over the next several years that expand employee eligibility formay impact the Partnership’s medical plan and places limits on plan design. Regulatory guidance required to fully assess the impact of this law is still forthcoming. Accordingly, thePartnership.  The Partnership is not yet able to determine the full potential financial impact of the Affordable Care Act.

Money Market Mutual Funds.  The SEC adopted amendments to the rules that govern money market mutual funds in July 2014.  The amendments preserve stable net asset value for certain retail funds and government funds.  The amendments also impose, under certain circumstances, liquidity fees and redemption gates on non-government funds.  The Partnership continues to evaluate the impact of these amendments on its operating results in future years.operations and to consider the implementation of policies and procedures to address the amendments.

Federal “Do Not Call” Regulations.The Partnership is also subject to federal

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These Legislative and state regulations like other businesses and must evaluate and adapt to new regulations as they are adopted. In particular, the Partnership believes the federal “do not call” regulations enacted in recent years have affectedRegulatory Initiatives may impact the manner in which many of its financial advisors conduct their businesses. While the Partnership believes it is in compliancemarkets its products and services, manages its business and operations, and interacts with these regulations, these regulationsclients and regulators, any or all of which could materially impact the Partnership’s future revenues or results of operations.

Money Market Mutual Funds. In May 2010,operations, financial condition, and liquidity.  Regulatory changes or changes in the SEC adopted several reforms to money market funds (“MMF”) that were designed to, among other things, strengthen maturity limitations,law could increase diversification,compliance costs which would adversely impact our profitability.  However, the Partnership cannot presently predict when or if any of the proposed or potential Legislative and improve liquidity standards. Following those reforms, the President’s Working Group on Financial Markets, the Financial Stability Oversight Council (“FSOC”), and the SEC continued to evaluate and discuss additional reforms to address what they perceived to be structural vulnerabilities in MMFs. In November 2012, the FSOC, using its authority under the Dodd-Frank Act, proposed structural reforms to MMFs. Specifically, the FSOC proposed three alternatives for consideration: requiring MMFs to have (i) a floating net asset value; (ii) a net asset value buffer of 1% with a requirement that a percentage of a shareholder’s highest account value in excess of $100,000 during the previous 30 days be made available for redemption on a delayed basis and be the first amount at risk under certain MMF loss scenarios; and (iii) a net asset value buffer of 3% with other measures that could include more stringent investment diversification requirements, increased minimum liquidity levels, and/or more robust disclosure requirements. These FSOC alternatives are only proposals; they are not rules. It is unclear whether the proposalsRegulatory Initiatives will be adopted in their current form, in a modified form,enacted or at all. It is likelythe impact that any FSOC recommendation would require rulemaking by the SEC, which the SEC would likely propose for further public comment. Based on that, while MMF reforms in the nature of FSOC’s proposals couldLegislative and Regulatory Initiatives will have an impact on the Partnership’s MMF, it is currently unclear what that impact would be.Partnership.

Any of the foregoing regulatory initiatives could adversely affect the Partnership’s business operations, business model, and profitability. The Partnership cannot predict with any certainty whether or which of the regulatory proposals that have not yet been adopted will be adopted, and if so whether they will be adopted in their current form or adopted subject to further revisions. If adopted, some of these initiatives could significantly and adversely impact the Partnership’s operating costs, its structure, its ability to generate revenue, and its overall profitability.

CCOMPETITIONompetition —The Partnership is subject to intense competition for clients and personnel, and many of its competitors have greater resources.

All aspects of the Partnership’s business are highly competitive.  The Partnership competes for clients and personnel directly with other securities firms and increasingly with other types of organizations and other businesses offering financial services, such as banks and insurance companies.

PART I

Many of these organizations have substantially greater capital and additional resources, and some entities offer a wider range of financial services.  Over the past several years, there has been significant consolidation of firms in the financial services industry, forcing the Partnership to compete with larger firms with greater capital and resources, brokerage volume and underwriting activities, and more competitive pricing.  Also, the Partnership continues to compete with a number of firms offering discount brokerage services, usually with lower levels of personalized service to individual clients.  Further, the financial services industry continues to evolve technologically, with some firms now providing lower cost, computer-based "robo-advice" with limited or no personalized service to clients.  Clients are freeable to transfer their business to competing organizations at any time, although theretime.  The Partnership's continued ability to compete based on a business model designed to serve clients through personalized relationships with financial advisors and branch teams in order to provide tailored solutions may be impacted by the evolving financial services industry and client needs.  If financial advisors do not meet client needs, the Partnership could lose clients, thereby reducing revenues and profitability.  Further, the Partnership faces increased competition for clients from larger firms in its non-urban markets, and from a fee to do so.broad range of firms in the urban and suburban markets in which the Partnership competes.

Competition among financial services firms also exists for financial advisors and other personnel.  The Partnership’s continued ability to expand its business and to compete effectively depends on the Partnership’s ability to attract qualified employees and to retain and motivate current employees.  In addition, the Partnership's business is dependent on financial advisors' ability to attract and retain clients and assets.  If the Partnership���sPartnership’s profitability decreases, then bonuses paid to financial advisors and other personnel, along with profit-sharing contributions, may be decreased or eliminated, increasing the risk that personnel could be hired away by competitors.  In addition, the Partnership has recently faced increased competition from larger firms in its non-urban markets, and from a broad range of firmsduring an extended downturn in the urban and suburban markets in whicheconomy, there is increased risk the Partnership competes.Partnership’s more successful financial advisors may leave because a significant portion of their compensation is variable based on the Partnership’s profitability.  

The competitive pressure the Partnership experiences could have an adverse effect on its business, results of operations, financial condition and cash flow.  For additional information, see Part I, Item 1—1 – Business Operations—– Business Operations – Competition.

BBRANCHranch OFFICEffice SYSTEMystem —The Partnership’s system of maintaining branch offices primarily staffed by one financial advisor may expose the Partnership to risk of loss or liability from the activities of the financial advisors and to increases in rent related to increased real property values.

MostThe vast majority of the Partnership’s branch offices are staffed by a single financial advisor and a branch office administrator withoutadministrator.  Branch offices do not have an onsite supervisor as would be found at broker-dealers with multi-broker branches.  The Partnership’s primary supervisory activity is conducted from its home offices.  Although this method of supervision is designed to comply with all applicable industry and regulatory requirements, it is possible that the Partnership is exposed to a risk of loss arising from alleged imprudent or illegal actions of its financial advisors.  Furthermore, the Partnership may be exposed to further losses if additional time elapses before its supervisory personnel detect problem activity.

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PART I

The Partnership maintains personal financial and account information and other documents and instruments for its clients at its branch offices, both physically and in electronic format.  Despite reasonable precautions, because the branch offices are relatively small and some are in remote locations, the security systems at these branch offices may not prevent theft of such information.  If security of a branch is breached and personal financial and account information is stolen, the Partnership’s clients may suffer financial harm and the Partnership could suffer financial harm, reputational damage and regulatory issues.

In addition, the Partnership leases its branch office spaces and a material increase in the value of real property may increase the amount of rent paid, which will negatively impact the Partnership’s profitability.

PART I

INABILITYTOnability to ACHIEVE OURchieve Financial Advisor GROWTHrowth RATEate —If the Partnership is unable to fully achieve its goals for hiring financial advisors or the attrition rate of its financial advisors is higher than its expectations, the Partnership may not be able to meet its planned growth rates or maintain its current number of financial advisors.

Historically, during times of market downturnsvolatility it is more difficult for the Partnership to attract qualified applicants for financial advisor positions.  In addition, the Partnership relies heavily on referrals from its current financial advisors in recruiting new financial advisors.  During an economic downturn,times of market volatility, current financial advisors can be less effective in recruiting potential new financial advisors through referrals.

Regardless of the presence of a market downturn, the Partnership may not be able to meet its hiring objectives. For instance,volatility, the Partnership has not met annual hiring objectives in eight of the last 10 years from 2002 through 2011. For 2012, the Partnership methistorically been able to consistently meet its annual hiring objective, but theregrowth objectives.  There can be no assurance that the Partnership will be able to hiregrow at desired rates in future periods or maintain its current number of financial advisors.

A significant number of the Partnership’s financial advisors have been licensed as brokers for less than three years.  As a result of their relative inexperience, many of these financial advisors have encountered or may encounter difficulties developing or expanding their businesses.  Consequently, the Partnership has periodically experienced higher rates of attrition, particularly with respect to the less experienced financial advisors and especially during times of market downturns.volatility.  The Partnership generally loses more than half of its financial advisors who have been licensed for less than three years.  In the past, theThe Partnership also has experiencedmay experience increased financial advisor attrition due to increased competition from other financial services companies and efforts by those firms to recruit its financial advisors.  There can be no assurance that the attrition rates the Partnership has experienced in the past will not continue or increase in the future. In addition, the Partnership raised the performance standards for its financial advisors in 2011, which may attribute to higher attrition for financial advisors unable to meet these performance standards.

Either the failure to achieve hiring goals or an attrition rate higher than anticipated may result in a decline in the revenue the Partnership receives from asset-based fees, commissions and other securities related revenues.  As a result, theThe Partnership may not be able to either maintain its current number of financial advisors or achieve the level of net growth upon which its business model is based and its revenues and results of operations may be adversely impacted.

Increased Financial Advisor Compensation — Compensation paid to new financial advisors, as well as current financial advisors participating in a retirement transition plan, could negatively impact the Partnership’s profitability and capital if the increased compensation does not help retain financial advisors and clients.

In order to attract candidates to become financial advisors, the Partnership has recently increased the compensation paid toprovides new financial advisors a minimum base compensation, as well as a bonus based on the amount of new assets gathered, during the first three years as a financial advisor.  The intent is to attract a greater number of high quality recruits with an enhanced level of base compensation in order to meet the Partnership’s growth objectives.objectives and to serve more clients.  If the Partnership increases new financial advisor base compensation and does not comparativelyresult in a corresponding increase in the level of productivity and retention rate of these financial advisors, then thethis additional compensation could negatively impact the Partnership’s financial performance in future periods.

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PART I

Additionally, to better transition clients to a new financial advisor when their current financial advisor retires, as well as to retain quality financial advisors until retirement, the Partnership, in certain circumstances, offers individually tailored retirement transition plans to financial advisors.  These retirement transition plans may offer increased financial consideration prior to and after retirement for financial advisors who provide client transition services in accordance with a retirement and transition employment agreement.  If this increased financial consideration does not increase client asset retention or help to retain quality financial advisors until retirement, the additional financial consideration could negatively impact the Partnership’s profitability and capital in future periods.  In addition, the Partnership expects that the retirement transition plans will result in higher financial advisor compensation expense in the future.

LLITIGATIONANDitigation and REGULATORYegulatory INVESTIGATIONSANDnvestigations and PROCEEDINGSroceedings —As a securities firm, the Partnership is subject to litigation involving civil plaintiffs seeking substantial damages and regulatory investigations and proceedings, which have increased over time and are expected to continue to increase even as global market conditions improve.increase.

Many aspects of the Partnership’s business involve substantial litigation and regulatory risks.  The Partnership is, from time to time, subject to examinations, and informal inquiries and investigations by regulatory and other governmental agencies.

agencies, as well as the SROs of which it is a member, including FINRA.  Such matters have in the past, and could in the future, lead to formal actions, which may impact the Partnership’s business.  In the ordinary course of business, the Partnership also is subject to arbitration claims, lawsuits and other significant litigation such as class action suits.  Over time, there has been increasing litigation involving the securities industry, including class action suits that generally seek substantial damages.

The Partnership has incurred significant expenses to defend and/or settle claims in the past.  In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages or in actions which are at very preliminary stages, the Partnership cannot predict with certainty the eventual loss or range of loss related to such matters.  Due to the uncertainty related to litigation and regulatory investigations and proceedings, the Partnership cannot determine if future litigation will have a material adverse effect on its consolidated financial condition.  Such legal actions may be material to future operating results for a particular period or periods.  See Part I, Item 3 – Legal Proceedings for more information regarding certain unresolved claims.

RRELIANCEONeliance on THIRDhird PARTIESarties —The Partnership’s dependence on third-party organizations exposes the Partnership to disruption if their products and services are no longer offered or supported or develop defects.defects.

The Partnership incurs obligations to its clients which are supported by obligations from firms within the industry, especially those firms with which the Partnership maintains relationships by which securities transactions are executed.  The inability of an organization with which the Partnership does a large volume of business to promptly meet its obligations could result in substantial losses to the Partnership.

The Partnership is particularly dependent on Broadridge, which acts as the Partnership’s primary vendor for providing accounting and record-keeping for client accounts in both the U.S. and Canada.  The Partnership’s communications and information systems are integrated with the information systems of Broadridge.  There are relatively few alternative providers to Broadridge and although the Partnership has analyzed the feasibility of performing Broadridge’s functions internally, the Partnership may not be able to do it in a cost-effective manner or otherwise.  The Partnership also utilizes the sub-accounting functionality of The Bank of New York Mellon Corporation (“BNY Mellon”) for mutual fund investments held by the Partnership’s clients.  BNY Mellon’s sub-accounting technology solution enables the Partnership to provide fund shareholder accounting services to mutual funds.  Consequently, any new computer systems or software packages implemented by Broadridgethese third parties which are not compatible with the Partnership’s systems, or any other interruption or the cessation of service by Broadridgethese third parties as a result of systems limitations or failures, could cause unanticipated disruptions in the Partnership’s business which may result in financial losses and/or disciplinary action by governmental agencies and/or SROs.

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PART I

CANADIANanada OPERATIONSperations —The Partnership is focusing heavily on efforts,has made, and intends to continue to make, substantial investments to support the potential profitability of its CanadianCanada operations, which have not yet achieved profitability.

The Partnership commenced operations in Canada in 1994 and plans to continue to expand its branch system in Canada.  The CanadianCanada operations have operated at a substantial deficit from inception.  The Partnership mayintends to make additional investments in its CanadianCanada operations to address short-term liquidity, capital, or expansion needs, which could be substantial. However, the number of Canadian financial advisors employed by the Partnership has declined since 2009. This decline could affect the ability of the Partnership to reach its profitability goals for the Canadian segment.

There is no assurance the CanadianCanada operations will ultimately become profitable.  For further information on the CanadianCanada operations, see Part II, Item 8 – Financial Statements and Supplementary Data – Note 1613 to the Consolidated Financial Statements.

Capital Requirements; Uniform NetCAPITAL LIMITATIONS; UNIFORM NET CAPITALapital and Customer Protection RULEules —The SEC’s Uniform Net Capital Rule imposes minimum net capital requirements and could limit the Partnership’s ability to engage in certain activities which are crucial to its business.

Adequacy of capital is vitally important to broker-dealers, and lack of sufficient capital may limit the Partnership’s ability to compete effectively.  In particular, lack of sufficient capital or compliance with the Uniform Net Capital Rule may limit Edward Jones’ ability to commit to certain securities activities such as underwriting and trading, which require significant amounts of capital, its ability to expand margin account balances, as well as its commitment to new activities requiring an investment of capital.  FINRA regulations and the Uniform Net Capital Rule may restrict Edward Jones’ ability to expand its business operations, including opening new branch offices or hiring additional financial advisors.  Consequently, a significant operating loss or an extraordinary charge against net capital could adversely affect Edward Jones’ ability to expand or even maintain its present levels of business.  In addition, pursuant to the Customer Protection Rule, the Partnership has cash and investments segregated in special reserve bank accounts for the benefit for U.S. clients.  Increased regulations for the banking industry may impact the Partnership's ability to find institutions to place those segregated client funds.

In addition to the regulatory requirements applicable to Edward Jones, EJTC and the CanadianCanada broker-dealer are subject to regulatory capital requirements in the U.S. and in Canada.  Failure by the Partnership to maintain the required net capital for any of its subsidiaries may subject it to disciplinary actions by the SEC, FINRA, IIROC, OCC or other regulatory bodies, which could ultimately require its liquidation.  In the U.S., Edward Jones may be unable to expand its business and may be required to restrict its withdrawal of subordinated debt and partnership capital in order to meet its net capital requirements.

LLIQUIDITYiquidity —The Partnership’s business in the securities industry requires that sufficient liquidity be available to maintain its business activities, and it may not always have access to sufficient funds.funds.

Liquidity, or ready access to funds, is essential to the Partnership’s business.  The currentA tight credit market environment could have a negative impact on itsthe Partnership’s ability to maintain sufficient liquidity to meet its working capital needs.  Short-term and long-term financing are two sources of liquidity that could be affected by the currenta tight credit market.  AsIn a result of the concerns about the stability of the markets in general, sometight credit market, lenders have reducedmay reduce their lending to borrowers, including the Partnership.  There is no assurance that financing will be available at attractive terms, or at all, in the future.  A significant decrease in the Partnership’s access to funds could negatively affect its business and financial management in addition to its reputation in the industry.

PART I

  In addition, there is increased focus by regulators on the importance of effective liquidity risk management practices.

Many limited partners subordinated limited partners and general partners have financed the initial and subsequentfinance their Partnership capital contributions by obtaining personal bank loans.  Any such bank loan agreement is and will be between the limited partner and the bank.  The Partnership performs certain administrative functions for the majority of limited partner bank loans, but does not guarantee thelimited partner bank loans, nor can limited partners pledge their Partnership interestInterests as collateral for the bank loan. Partnersloans.  Limited partners who finance all or a portion of their Partnership interestInterests with bank financingloans may be more likely to request the withdrawal of capital to repay such obligations should the Partnership experience a period of reduced earnings.  Any withdrawals by general partners, subordinated limited partners or limited partners are subject to the terms of the Partnership Agreement and would reduce the Partnership’s available liquidity and capital.

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PART I

The Partnership makes loans available to those general partners (other than those who are members of the Executive Committee) thatwho require financing for some or all of their individualPartnership capital contributions.  Additionally, in limited circumstances, a general partner capital contributions.may withdraw from the Partnership and become a subordinated limited partner while he or she still has an outstanding partnership loan.  Loans made by the Partnership to general partners are generally for a period of one year, but are expected to be renewed and bear interest at aan interest rate defined in the loan documents.  The Partnership recognizes interest income for the interest paid byhas full recourse against any general partners in connection with such loans. General partners borrowing from thepartner that defaults on his or her Partnership are required to repay such loans by applying earnings received from the Partnership to such loans. As a result,loan obligations.  However, there is no assurance that general partner’spartners will be able to repay the interest and/or the principal amount of their Partnership loans at or prior to its maturity.  If general partners are unable to repay the interest and/or the principal amount of their Partnership loans at or prior to maturity, the Partnership could be adversely impacted.

UUPGRADEOFpgrade of TECHNOLOGICALechnological SYSTEMSystems —The Partnership maywill engage in significant technology initiatives in the future which may be costly and could lead to disruptions.

From time to time, the Partnership has engaged in significant technology initiatives and expects to continue to do so in the future.  Such initiatives are not only necessary to better meet the needs of the Partnership’s clients, but also to satisfy new industry standards and practices, and better secure the transmission of clients’ information on the Partnership’s systems.systems, and improve operational efficiency.  With any major system replacement, there will be a period of education and adjustment for the branch and home office employees utilizing the system.  Following any upgrade or replacement, if the Partnership’s systems or equipment doesdo not operate properly, isare disabled or failsfail to perform due to increased demand (which might occur during market upswings or downturns), or if a new system or system upgrade contains a major problem, the Partnership could experience unanticipated disruptions in service, including interrupted trading, slower response times, decreased client service and client satisfaction, and delays in the introduction of new products and services, any of which could result in financial losses, liability to clients, regulatory intervention or reputational damage.  Further, the inability of the Partnership’s systems to accommodate a significant increase in volume of transactions also could constrain its ability to expand its business.

PART I

INTERESTnterest RATEate ENVIRONMENTnvironment —The Partnership’s profitability is impacted by thea low interest rate environment.

The currentA low interest rate environment adversely impacts the interest income the Partnership earns from clients’ margin loans, the investment of excess funds, and securities the Partnership owns, as well as the fees earned by the Partnership through its minority ownership in Passport Research, which is the investment adviser for two money market funds made available to the Edward Jones money market funds.Partnership's clients.  While thea low interest rate environment positively impacts the Partnership’s expenses related to liabilities that finance certain assets, such as amounts payable to clients and other interest-bearing liabilities, its interest bearinginterest-bearing liabilities are less impacted by short-term interest rates compared to its interest earning assets, resulting in interest income being more sensitive to the currenta low interest rate environment than interest expense.

CCREDITredit RISKisk —The Partnership is subject to credit risk due to the nature of the transactions it processes for its clients.

The Partnership is exposed to the risk that third parties who owe it money, securities or other assets will not meet their obligations.  Many of the transactions in which the Partnership engages expose it to credit risk in the event of default by its counterparty or client, such as cash balances held at various major U.S. financial institutions, which typically exceed FDICFederal Deposit Insurance Corporation (“FDIC”) insurance coverage limits.  In addition, the Partnership’s credit risk may be increased when the collateral it holds cannot be realized or is liquidated at prices insufficient to recover the full amount of the obligation due to the Partnership. See Part III, Item 710 – Management’s DiscussionDirectors, Executive Officers and Analysis of Financial Condition and Results of Operations,Corporate Governance, for more information about the Partnership’s credit risk.

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LACKOFackof CAPITALapital PERMANENCYermanency —Because the Partnership’s capital is subject to mandatory liquidationredemption either upon the death or withdrawal request of a partner, the capital is not permanent and a significant mandatory liquidationredemption could lead to a substantial reduction in the Partnership’s capital, which could, in turn, have a material adverse effect on the Partnership’s business.

Under the terms of the Partnership Agreement, a partner’s capital balance is liquidatedredeemed upon death.  In addition, partners may request withdrawals offrom their partnership capital accounts, subject to certain limitations on the timing of those withdrawals.  Accordingly, partnershipthe Partnership’s capital is not permanent and is dependent upon current and future partners to both maintain their existing capital and make additional capital contributions in the Partnership.  Any withdrawal requests by general partners, subordinated limited partners or limited partners would reduce the Partnership’s available liquidity and capital.  The Managing Partner may decline a withdrawal request if that withdrawal would result in the Partnership violating any agreement, such as a loan agreement, or any applicable laws, rules or regulations.

Under the terms of the Partnership Agreement, limited partners who request the withdrawal of their capital are repaid their capital in three equal annual installments beginning the monthno earlier than 90 days after their withdrawal request. Thenotice is received by the Managing Partner may, in his discretion, allow a limited partner to accelerate the withdrawal of his or her capital.Partner.  The capital of general partners requesting the withdrawal of capital from the Partnership may be converted to subordinated limited partner capital or, at the discretion of the Managing Partner, redeemed by the Partnership.  The withdrawalcapital of subordinated limited partnerpartners requesting withdrawal of their subordinated limited partnership capital is repaid in six equal annual installments beginning the monthno earlier than 90 days after their request for withdrawal. Liquidationswithdrawal is received by the Managing Partner.  The Partnership’s Managing Partner has discretion to waive or modify these withdrawal restrictions and to accelerate the return of capital.  Redemptions upon the death of a partner are generally required to be made within six months of the date of death.  Due to the nature of the liquidationredemption requirements of the Partnership's capital as set forth in the Partnership Agreement, the Partnership accounts for its capital as a liability, in accordance with GAAP.U.S generally accepted accounting principles (“GAAP”).  If the Partnership’s capital declines by a substantial amount due to liquidationdeath or withdrawal, the Partnership may not have sufficient capital to operate or expand its business or to meet withdrawal requests by partners.

PART I

INTERRUPTIONOF BUSINESSAND OPERATIONS —Any substantial disruption to the Partnership’s businessUnderwriting, Syndicate and operations could lead to significant financial loss to its business and operations as well as harm relations with its clients.Trading Position Risks —

The Partnership relies heavily on communications and information systems to conduct its business. The Partnership’s home office facilities and its existing computer system and network, including its backup systems, are vulnerable to damage or interruption from human error, natural disasters, power loss, sabotage, computer viruses, intentional acts of vandalism, attempts by others to gain unauthorized access to the Partnership’s information technology system, and similar events. Such an event could substantially disrupt the Partnership’s business by causing physical harm to its home office facilities and its technological systems. In addition, the Partnership’s reputation and business may suffer if clients experience data or financial loss from a significant interruption. The Partnership’s primary data center is located in St. Louis, Missouri. The Partnership has a data center in Tempe, Arizona, which currently operates as a secondary data center to its primary data center in St. Louis and is designed to enable the Partnership to maintain service during a system disruption contained in St. Louis. A prolonged interruption of either site might result in a delay in service and substantial additional costs and expenses. While the Partnership has disaster recovery and business continuity planning processes, and interruption and property insurance to mitigate and help protect it against such losses, there can be no assurance that the Partnership is fully protected from such an event. In 2011, the Partnership began re-purposing its secondary data center in Tempe, Arizona in order to be able to operate this facility as a primary data center for processing the most critical systems such that they could run in St. Louis, Missouri or Tempe, Arizona. As of December 31, 2012, this is still in process and is expected to take another two to three years to complete.

UNDERWRITING, SYNDICATEAND TRADING POSITION RISKS —The Partnership engages in underwriting activities and maintains inventory in securities, both of which can expose the Partnership to material losses and liability.

Participation as a manager or syndicate member in the underwriting of fixed income and equity securities subjects the Partnership to substantial risk.  As an underwriter, the Partnership is subject to risk of substantial liability, expense and adverse publicity resulting from possible claims against it as an underwriter under federal and state securities laws.  Such laws and regulations impose substantial potential liabilities on underwriters for material misstatements or omissions inOver the document used to describe the offered securities. In addition,past several years, there exists a potential for possible conflict of interest between an underwriter’s desire to sell its securities and its obligation to its clients not to recommend unsuitable securities. There has been an increasing incidence ofincreased litigation in these areas. These lawsuits are frequently brought by large classes of purchasers of underwritten securities. Such lawsuits often name underwriters as defendants and typically seek substantial amounts in damages.

Further, as an underwriter, the Partnership may incur losses if it is unable to resell the securities it is committed to purchase or if it is forced to liquidate all or part of its commitment at less than the agreed upon purchase price.  In addition, the commitment of capital to an underwriting may adversely affect the Partnership’s capital position and, as such, the Partnership’s participation in an underwriting may be limited by the requirement that it must at all times be in compliance with the SEC’s Uniform Net Capital Rule.  In maintaining inventory in fixed income and equity securities, the Partnership is exposed to a substantial risk of loss, depending upon the nature and extent of fluctuations in market prices.

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Business InterruptionRISKOFisk — Any substantial disruption to the Partnership’s business and operations, including cybersecurity attacks, could lead to significant financial loss to the Partnership’s business and operations, as well as harm the Partnership’s reputation and client relationships.

The Partnership relies heavily on communications and information systems to conduct its business.  The Partnership’s home office facilities and its existing computer system and network, including its backup systems, are vulnerable to damage or interruption from human error, natural disasters, power loss, sabotage, cybersecurity attacks, computer viruses and other malicious code, intentional acts of vandalism, attempts by others to gain unauthorized access to the Partnership’s information technology system, market disruptions due to third-party technology errors, and similar events.  The risk of these types of events occurring has grown recently due to increased use of the internet and mobile devices, as well as increased sophistication of external parties who may attempt to cause harm.  The Partnership has not experienced any material losses relating to cybersecurity attacks or other information security breaches.  The Partnership has processes in place designed to safeguard and monitor against business interruptions, cyberattacks or other disruptions.  However, there can be no assurance the Partnership will not suffer such losses in the future.  Such an event could substantially disrupt the Partnership’s business by causing physical harm to its home office facilities and its technological systems, jeopardizing the Partnership’s, its clients’ or third parties’ confidential information, or causing interruptions or malfunctions in the Partnership’s, its clients’ or third parties’ operations.  In addition, the Partnership’s reputation and business may suffer if clients experience data or financial loss from a significant interruption or cybersecurity attack.

The Partnership has primary data centers in Missouri and Arizona.  These data centers act as disaster recovery sites for each other.  While these data centers are designed to be redundant for each other, a prolonged interruption of either site might result in a delay in service and substantial costs and expenses.  While the Partnership has disaster recovery and business continuity planning processes, and interruption and property insurance to mitigate and help protect it against such losses, there can be no assurance that the Partnership is fully protected from such an event.

Risk of INFLATIONnflation —An increase in inflation could affect securities prices and as a result, the profitability and capital of the Partnership.

Inflation and future expectations of inflation can negatively influence securities prices, as well as activity levels in the securities markets.  As a result, the Partnership’s profitability and capital may be adversely affected by inflation and inflationary expectations.   Additionally, the impact of inflation on the Partnership’s operating expenses may affect profitability to the extent that additional costs are not recoverable through increased prices of services offered by the Partnership.

TTRANSACTIONransaction VOLUMEolume VOLATILITYolatility —Significant increases and decreases in the number of transactions by the Partnership’s clients can have a material negative effect on the Partnership’s profitability and its ability to efficiently process and settle these transactions.

Significant volatility in the number of client transactions may result in operational problems such as a higher incidence of failures to deliver and receive securities and errors in processing transactions, and such volatility may also result in increased personnel and related processing costs.  In the past, the Partnership has experienced adverse effects on its profitability resulting from significant reductions in securities sales and likewise, has encountered operational problems arising from unanticipated high transaction volume.  The Partnership is not able to control such decreases and increases, and there is no assurance that it will not encounter such problems and resulting losses in future periods.

In addition, significant transaction volume could result in inaccurate books and records, which would expose the Partnership to disciplinary action by governmental agencies and SROs.

Investment Advisory Activities — The Partnership’s investment advisory businesses may be affected by the investment performance of its portfolios and operational risks associated with the size of the program.

Poor investment returns, due to either general market conditions or underperformance of programs constructed by the Partnership (relative to the programs of the Partnership’s competitors or to benchmarks) may affect the Partnership's ability to retain existing assets under care and to attract new clients or additional assets from existing clients.  Should there be a reduction in assets under care in programs which generate asset-based fees the Partnership will experience a decrease in net revenue.

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PART I

Based on the current size of the investment advisory program, it may experience concentration risks associated with the level and percentage of holdings in individual funds within the program which could result in additional operational and regulatory risks for the Partnership.  As a result of the size of the program, the Partnership is also exposed to that risk that trading volumes and program activity could impact the Partnership's ability to process transactions in a timely manner. 

Proprietary Mutual Funds — The Partnership’s business may be affected by operational risks, investment performance and the heightened regulatory requirements it faces as a result of sponsoring proprietary mutual funds and managing sub-advisers and other third party service providers.

As a sponsor and investment adviser to proprietary mutual funds, the Partnership, through its ownership of OLV, may experience additional operational risk and regulatory requirements attributed to its responsibility to oversee the investment management of the funds.  Due to the size and number of sub-advisers within proprietary mutual funds, there is a heightened risk associated with the Partnership's ability to perform ongoing due diligence and supervision.  Poor investment returns, due to either general market conditions or underperformance, of proprietary mutual funds may affect the Partnership's ability to expand the Trust, develop new mutual funds, attract new client assets, and retain existing client assets.  

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PART I

RISKS RELATED TO AN INVESTMENT IN LIMITED PARTNERSHIP INTERESTS

HHOLDINGolding COMPANYompany — JFC is a holding company; as a consequence, JFC’s ability to satisfy its obligations under the Partnership Agreement will depend in large part on the ability of its subsidiaries to pay distributions or dividends to JFC, which is restricted by law and contractual obligations.

Since JFC is a holding company, the principal sources of cash available to it are distributions or dividends from its subsidiaries and other payments under intercompany arrangements with its subsidiaries.  Accordingly, JFC’s ability to generate the funds necessary to satisfy its obligations with respect to the Interests, including the 7.5% “guaranteed payment” (for tax purposes, within the meaning of the Internal Revenue Code)Code of 1986, as amended (the “IRC”)) to limited partners pursuant to Section 3.3 of the Partnership Agreement (the “7.5% Payment”), will be dependent on distributions, dividends, and intercompany payments from its subsidiaries, and if those sources are insufficient, JFC may be unable to satisfy such obligations.

JFC’s principal operating subsidiaries, including Edward Jones,  are subject to various statutory and regulatory restrictions applicable to broker-dealers generally that limit the amount of cash distributions, dividends, loans and advances that those subsidiaries may pay to JFC. Regulations relating to capital requirements affecting some of JFC’s subsidiaries also restrict their ability to pay distributions or dividends and make loans to JFC.  See subheading “Regulation” ofPart I, Item 1 “Business”– Business – Regulation for a discussion of this Annual Report on Form 10-K.these requirements.

In addition, JFC’s subsidiaries may be restricted under the terms of their financing arrangements from paying distributions or dividends to JFC, or may be required to maintain specified levels of capital.  Moreover, JFC or its subsidiaries may enter into financing arrangements in the future which may include additional restrictions or debt covenant requirements further restricting distributions to JFC, which may impact JFC’s ability to make distributions to its limited partners.

SAVAILABILITYOFufficiency of Distributions to Repay FINANCINGinancing — Limited partners may finance their purchase of the Interests with a bank loan, but theloan.  The Partnership does not guarantee those loans and distributions may be insufficient to pay the interest or principal due on the loans.

Many limited partners finance the purchases of their Interests by obtaining personal bank loans.  Any such bank loan agreement is between the limited partner and the bank.  The Partnership performs certain administrative functions for the majority of limited partner bank loans, but does not guarantee the bank loans, nor can limited partners pledge their Partnership interestInterests as collateral for the bank loan.  Limited partners who have chosen to finance a portion of the purchase price of their Interests assume all risks associated with the loan, including the legal obligation to repay the loan.

There is no assurance that distributions from the Partnership will be sufficient to pay the interest on a limited partner’s loan or repay the principal amount of the loan at or prior to its maturity.  There also can be no assurance that such distributions will be sufficient to pay all income taxes due each year arising from a limited partner’s share of the Partnership’s income. Furthermore, in the event the Partnership experiences a loss which leads to its liquidation, there is no assurance there will be sufficient capital available to distribute to the limited partners for the repayment of any loans.

Status As Partner For Tax Purposes and Tax Risks — Limited partners are subject to income tax liabilities on the Partnership’s income, whether or not income is distributed, and may have an increased chance of being audited.  Limited partners may also be subject to passive loss rules as a result of their investment.

Limited partners are required to file tax returns and pay income tax in those states and foreign jurisdictions in which the Partnership operates, as well as in the limited partner’s state of residence or domicile.  Limited partners are liable for income taxes on their pro rata share of the Partnership’s taxable income.  The amount of income the limited partner pays tax on can significantly exceed the net income earned on the Interests and the income distributed to such limited partner, which results in a disproportionate share of income being used to pay taxes.  The Partnership’s income tax returns may be audited by government authorities, and such audit may result in the audit of the returns of the limited partners (and, consequently, an amendment of their tax returns).  

A limited partner’s share of the Partnership’s income or losses could be subject to the passive loss rules.  Under specific circumstances, certain income may be classified as portfolio income or passive income for purposes of the passive loss rules.  In addition, under certain circumstances, a limited partner may be allocated a share of the Partnership’s passive losses, the deductibility of which will be limited by the passive loss rules.

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PART I

Possible Tax Law Changes – From time to time, legislative changes to the IRC or state laws may be adopted that could increase the tax rate applicable to the limited partners’ net income earned and/or subject the net income earned to additional taxes currently not applicable.

Congress may enact legislation that subjects a limited partner’s share of the Partnership’s taxable income to self-employment tax.  Such legislation, if ever enacted, may substantially reduce a limited partner’s after-tax return from his or her Interest.  Other tax law changes may substantially impact a limited partner’s Interest and cannot be predicted.

NONon-VOTINGoting INTERESTSnterests; NONon-TRANSFERABILITYOFransferability of INTERESTSnterests; ABSENCEOFbsence of MARKET;arket, PRICErice FORor INTERESTSnterests —The Interests are non-voting and non-transferable, no market for the Interests exists or is expected to develop, and the price only represents book value.

None of the limited partners in their capacity as limited partners may vote or otherwise participate in the management of the Partnership’s business.  The Managing Partner has the authority to amend the Partnership Agreement without the consent of the limited partners, subordinated limited partners or general partners.  None of the limited partners may sell, pledge, exchange, transfer or assign their Interests without the express written consent of the Managing Partner (which is not expected to be given).

Because there is no market for the Interests, there is no fair market value for the Interests.  The price ($1,000 per Interest) at which the Interests were offered represents the book value of each Interest.  Capital could decline to a point where the book value of the Interests could be less than the price paid.

RRISKOFisk of DILUTIONilution —The Interests may be diluted from time to time, which could lead to decreased returns to the limited partners.

The Managing Partner has the ability, in his or her sole discretion, to issue additional Interests or Partnership capital.  The Partnership filed a Registration Statement on Form S-8 with the SEC on January 17, 2014, to register $350 million of Interests to be issued pursuant to the Partnership’s 2014 Employee Limited Partnership Interest Purchase Plan (the “Plan”).  On January 2, 2015, the Partnership issued $292 million of Interests in connection with the Plan.  In addition, on January 4, 2016, the Partnership issued additional Interests to individuals participating in retirement transition plans pursuant to the Plan.  The remaining $58 million of Interests may be issued in connection with the Plan at the discretion of the Partnership in the future.  The issuance of Interests will reduce the percentage of participation in net income by general partners, subordinated limited partners and pre-existing limited partners.

Any additionissuance of newadditional Interests will decrease the Partnership’s net interest income by the 7.5% PaymentsPayment for any such additional Interests, and holders of existing Interests may suffer decreased returns on their investment because the amount of the Partnership’s net income they participate in may be reduced as a consequence.  Additionally,Accordingly, the issuance of additional Interests will reduce the Partnership’s net interest income and profitability.

In 2015, the Partnership retains approximately 23%retained 13.8% of the general partners’ net income as capital which is credited monthly to the general partners’ Adjusted Capital Contributions (as defined in the Partnership Agreement).  Beginning in 2013, the Partnership decreased the amount of retentionRetention for 2016 is expected to approximately 14% of net income allocated to general partners.remain at a similar level as 2015.  Such retention, along with any additional capital contributions by general partners, will reduce the percentage of participation in net income by limited partners.  There is no requirement to retain a minimum amount of general partners’ net income, and the percentage of retained net income could change at any time in the future.  In accordance with the Partnership Agreement, the percentage of income allocated to limited partners is reset annually and the amount of retained general partner income and any additional issuance of general partnership capital reduces the income allocated to limited partners.

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PART I

LIMITATIONOFimitationof LIABILITYiability; INDEMNIFICATIONndemnification —The Partnership Agreement limits the liability of the Managing Partner and general partners by indemnifying them under certain circumstances, which may limit a limited partner’s rights against them and could reduce the accumulated profits distributable to limited partners.

The Partnership Agreement provides that none of the general partners, including the Managing Partner, will be liable to any person for any acts or omissions performed or omitted by such partner on behalf of the Partnership (even if such action, omission or failure to act constituted negligence) as long as such partner has (a) not (a) committed fraud, (b) acted or failed to act in subjective good faith or in a manner which involveddid not involve intentional misconduct, or a knowing violation of law or which was grossly negligent, orand (c) not derived improper personal benefit.

PART I

The Partnership also must indemnify theany general partners,partner, including the Managing Partner, from any claim in connection to acts or omissions performed in connection with the business of the Partnership and from costs or damages stemming from a claim attributable to acts or omissions by such partner, unless such act or omission was not in good faith on behalf of the Partnership, was not in a manner reasonably believed by the partner to be within the scope of his or her authority, norand was not in the best interests of the Partnership.  The Partnership does not have to indemnify any general partner, including the Managing Partner, in instances of fraud, for acts or omissions not in good faith or which involve intentional misconduct, a knowing violation of the law, or gross negligence, or for any acts or omissions where such partner derived improper personal benefit.

As a result of these provisions, the limited partners will have more limited rights against such partners than they would have absent the limitations in the Partnership Agreement.  Indemnification of the general partners could deplete the Partnership’s assets unless the Partnership's indemnification obligation is covered by insurance, which the Partnership may or may not obtain, or which insurance may not be available at a reasonable price or at all or in an amount sufficient to cover the indemnification obligation.  The Partnership Agreement does not provide for indemnification of limited partners.

Risk Of Loss — The Interests are equity interests in the Partnership.  As a result, and in accordance with the Partnership Agreement, the right of return of a limited partner’s Capital Contribution (as defined in the Partnership Agreement) is subordinate to all existing and future claims of the Partnership’s general creditors, including any of its subordinated creditors.

In the event of a partial or total liquidation of the Partnership or in the event there were insufficient Partnership assets to satisfy the claims of its general creditors, the limited partners may not be entitled to receive their entire Capital Contribution amounts back.  Limited partner capital accounts are not guaranteed.  However, as a class, the limited partners would be entitled to receive their aggregate Capital Contributions back prior to the return of any capital contributions to the subordinated limited partners or the general partners.  If the Partnership suffers losses in any year but liquidation procedures described above are not undertaken and the Partnership continues, the amounts of such losses would be absorbed in the capital accounts of the partners as described in the Partnership Agreement, and each limited partner in any event remains entitled to receive annual 7.5% Payments on his or her contributed capital under the terms of the Partnership Agreement.  However, as there would be no accumulated profits in such a year, limited partners would not receive any sums representing participation in net income of the Partnership.  In addition, although the amount of such annual 7.5% Payments to limited partners are charged as an expense to the Partnership and are payable whether or not the Partnership earns any accumulated profits during any given period, no reserve fund has been set aside to enable the Partnership to make such payments.  Therefore, such payments to the limited partners are subject to the Partnership’s ability to service this annual 7.5% Payment, of which there is no assurance.

Foreign Exchange Risk For Canada Residents — Each foreign limited partner has the risk that he or she will lose value on his or her investment in the Interests due to fluctuations in the applicable exchange rate; furthermore, foreign limited partners may owe tax on a disposition of the Interests solely as the result of a movement in the applicable exchange rate.

All investors purchase Interests using U.S. dollars.  As a result, limited partners who reside in Canada may risk having the value of their investment, expressed in Canadian currency, decrease over time due to movements in the applicable currency exchange rates.  Accordingly, such limited partner may have a loss upon disposition of his or her investment solely due to a downward fluctuation in the applicable exchange rate.

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PART I

In addition, changes in exchange rates could have an impact on Canadian federal income tax consequences for a limited partner, if such limited partner is a resident in Canada for purposes of the Income Tax Act (Canada).  The disposition by such limited partner of an Interest, including as a result of the withdrawal of the limited partner from the Partnership or the Partnership’s dissolution, may result in the realization of a capital gain (or capital loss) by such limited partner.  The amount of such capital gain (or capital loss) generally will be the amount, if any, by which the proceeds of disposition of such Interest, less any reasonable costs of disposition, each expressed in Canadian currency using the exchange rate on the date of disposition, exceed (or are exceeded by) the adjusted cost base of such Interest, expressed in Canadian currency using the exchange rate on the date of each transaction that is relevant in determining the adjusted cost base.  Accordingly, because the exchange rate for those currencies may fluctuate between the date or dates on which the adjusted cost base of a limited partner’s Interest is determined and the date on which the Interest is disposed of, a Canadian-resident limited partner may realize a capital gain or capital loss on the disposition of his or her Interest solely as a result of fluctuations in exchange rates.

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PART I

None.

The Partnership primarily conducts its U.S. home office operations from two campus locations in St. Louis, Missouri and one campus location in Tempe, Arizona.  As of December 31, 2012,2015, the Partnership’s U.S. home office consisted of 1814 separate buildings totaling approximately 2.0 million square feet.

Of the 1814 U.S. home office buildings, two buildings areone building is leased through an operating lease and the remaining 1613 are owned by the Partnership.  The land for the Tempe, Arizona campus is leased.  In addition, the Partnership leases its CanadianCanada home office facility in Mississauga, Ontario through an operating lease.  The Partnership also maintains facilities in 11,41512,482 branch locations as of December 31, 2012,2015, which are located in the U.S. and Canada and are predominantly rented under cancelable leases.  See Part II, Item 8 – Financial Statements and Supplementary Data – Notes 1411 and 1714 to the Consolidated Financial Statements for information regarding non-cancelable lease commitments and related party transactions, respectively.

PART I

In the normal course of its business, the Partnership is named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation. Certain of these legal actions may include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The Partnership is involved, from time to time, in various legal matters, including arbitrations, class actions, other litigation, and investigations and proceedings by governmental organizations and SROs, certain of which may result in adverse judgments, fines or penalties.SROs.

CountrywideCountrywide. ThereIn the past several years, there have been fourfive cases filed against Edward Jones (in addition to numerous other issuers and underwriters) asserting various claims under the U.S. Securities Act of 1933 (the “Securities Act”) in connection with registration statements and prospectus supplements issued for certain mortgage-backed certificates issued between 2005 and 2007. 2007, four of which have appeals that are currently pending.

Three of these cases arewere purported class actions (David H. Luther, et al. v. Countrywide Financial Corporation, et al.al. filed in 2007.;2007 in the Superior Court of the State of California, County of Los Angeles; Maine State Retirement System, et al. v. Countrywide Financial Corporation, et al.al. filed in 2010; in the U.S. District Court for the Central District of California; andWestern Conference of Teamsters Pension Trust Fund v. Countrywide Financial Corporation, et al.al. filed in 2010). All three cases remain pending in the Superior Court of the State of California, County of Los Angeles) filed against numerous issuers and underwriters, including Edward Jones. The plaintiffs sought compensatory damages and reasonable costs and fees, including attorneys’ and experts’ fees. The U.S. District Court for the Central District of California. Plaintiffs seek unspecified compensatory damages, attorneys’ fees, costs, expenses and rescission. In November 2010,California granted final approval of a settlement for these three cases on December 6, 2013. The approved settlement is not expected to have a material adverse impact on the Court in theMaine State case dismissed all of plaintiffs’ claimsPartnership’s consolidated financial condition. On January 14, 2014, some objectors to the extent they related to any certificates for which Edward Jones acted as dealer. TheWestern Conferencesettlement filed a notice of Teamsters case has been stayed by agreementappeal of the parties.Court’s final judgment and dismissal, and the appeal is currently pending in the U.S. Court of Appeals for the Ninth Circuit.

On August 10, 2012, the Federal Deposit Insurance Corporation,FDIC, in its capacity as receiver for Colonial Bank, filed a separate lawsuit (FDIC v. Countrywide Securities Corporation, Inc., et al.) in the U.S. District Court for the Central District of California against numerous issuers and underwriters, including Edward Jones. However,The plaintiff does not allege that it purchased any tranchesought compensatory damages and attorneys’ fees and costs. On April 8, 2013, the Court dismissed this case based on statute of any offering for which Edward Jones acted as dealer. Following defendant’s motion to dismiss, plaintiffslimitations grounds. The FDIC filed a notice of appeal of the Court’s dismissal on October 3, 2013 and filed their first amended complaintopening brief on NovemberApril 6, 2012.2015.  The parties have agreed to a briefing schedule on defendants’ motion to dismiss.

Lehman Brothers. Edward Jones was named as a defendant in three actions related to its underwriting of Lehman Brothers Holdings Inc. (“Lehman Brothers”) notes that are or wereappeal is currently pending in the U.S. District Court of Appeals for the Southern District of New York (“SDNY”). Two of the suits were putative class action suits originally brought by plaintiffs in state court in Arkansas (the “Arkansas Plaintiffs”), which asserted Securities Act claims based upon two offerings of Lehman Brothers’ notes in 2007. The Court dismissed those actions on December 11, 2012. The Arkansas Plaintiffs will have the right to appeal the dismissal order. The third suit was amended in October 2011 to assert a Section 11 claim against Edward Jones related to three offerings of Lehman bonds in January and February 2008. Plaintiffs, American National Life Insurance Company of Texas, Comprehensive Investment Services Inc., The Moody Foundation, and American National Insurance Company, allege to have purchased $3 million of securities in these offerings, but did not make any of these purchases through Edward Jones. This action names several other purported underwriters as defendants, as well as Lehman Brothers’ former auditor. On January 6, 2012, Edward Jones and other defendants moved to dismiss this action. The motion was fully briefed as of March 5, 2012. The Court has not yet ruled on the motion to dismiss.Ninth Circuit.

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PART I

Nicholas Maxwell,Daniel Ezersky, individually and on behalf of all others similarly situated.situated. On March 14, 2013, Edward Jones was named as a defendant in a putative class action complaintlawsuit in Alameda Superior Court.the Circuit Court of St. Louis County, Missouri. The complaint asserted causes of action for unlawful wage deductions (Labor Code sections 221, 223, 400-410, 2800, 2802, Cal. Code Reg. title 8, section 11040(8)); California Unfair Competition Law violations (Business and Professions Code sections 17200-04); and waiting time penalties (Labor Code sections 201-203). Plaintiff allegespetition alleged that Edward Jones improperly chargedbreached its California financial advisors fees, costs,fiduciary duties and expenses related to trading errors or “broken” trades, and failed to timely pay wages at termination; howeverwas unjustly enriched through the use of an online life insurance needs calculator that plaintiff does not allege a specificclaims inflated the amount of damages. Plaintiff filedinsurance he needed. The plaintiff sought damages on behalf of Missouri residents who purchased certain life insurance products from Edward Jones between March of 2008 and the complaint on Decemberpresent, including: actual damages, or alternatively, judgment in an amount equal to profits gained from the sale of term, whole life or universal life insurance to plaintiff/damages class; punitive damages; injunctive relief; costs, including reasonable fees and expert witness expenses; and reasonable attorneys’ fees. On August 18, 2012 and2014, Edward Jones filed its answera motion for summary judgment, which was subsequently granted by the Court. Plaintiff filed a notice of appeal, and the Missouri Court of Appeals for the Eastern District affirmed summary judgment on February 6, 2013. There is a case management conference scheduled for July 10, 2013.October 20, 2015.  On January 26, 2016, the Supreme Court of Missouri denied the plaintiff's application to transfer the case. 

TribuneTribune. In August 2011, retirees of Times Mirror/Tribune Company filed suit in the U.S. District Court for the SDNYSouthernDistrict of New York (“SDNY”) against numerous brokerage firms and banks, including Edward Jones, claiming that a fraudulent transfer occurred during the 2007 Times Mirror/Tribune Company merger. Plaintiffs allege that payments made to Tribune Company shareholders, of which Edward Jones’ customers received approximately $6.5 million, constituted fraudulent transfers. The case has been consolidated inOn June 1, 2015, the U.S. District Court for the SDNY along with a number of similar casesentered an Order dismissing Edward Jones without prejudice from the lawsuit captioned In Re: Tribune Company Fraudulent Conveyance Litigation, Marc S. Kirschner, as partLitigation Trustee for the Tribune Litigation Trust v. FitzSimons, et al. Two of the multi-district litigation process.

Yavapai County Litigation. In September, 2009, threeother related lawsuits, Deutsche Bank Trust Company Americas v. Ametek, Inc., and Niese v. Alliance Bernstein L.P., were filed indismissed by the State of Arizona; all three lawsuits were consolidated and are pending before the U.S. District Court for the DistrictSDNY in 2013 and the dismissal was appealed to the U.S. Court of Arizona. The actions relate to bonds underwrittenAppeals for the Second Circuit. No decision has been issued by the U.S. Court of Appeals for the Second Circuit.

Mutual Fund Share Class Waivers. On May 5, 2015, FINRA’s Enforcement Department advised Edward Jones that it was investigating whether any violations of the federal securities laws or rules have occurred with respect to mutual fund purchases and other brokerage firmssales charge waivers for the purpose of financing construction of an event center in Prescott Valley, Arizona.certain retirement plan and charitable organization accounts.  As previously disclosed, on October 26, 2015, Edward Jones, sold approximately $2.9 million ofwithout admitting or denying the bonds. The plaintiffs allegefindings, entered into a settlement agreement with FINRA in connection with this investigation. On June 12, 2015, the underwriters, including Edward Jones, made material misrepresentations and omissions in the preliminary official statement and/or in the official statement. One of the matters was filed as a putative class action in which the plaintiffs seek to represent all purchasers of the issued bonds. Allstate is suing as a purchaser of the bonds and Wells Fargo filed a separate action as indenture trustee on behalf of all bond holders. The Court entered an order in November, 2010 dismissing several of the claims against Edward Jones, including all claims brought on behalf of the class. The remaining claims against Edward Jones stem from allegations that defendants violated certain state securities acts and committed common law torts. Plaintiffs are seeking an unspecified amount of damages including attorneys’ fees, costs, expense, rescission or statutory damages, out-of-pocket damages and prejudgment interest. In 2011, Edward Jones filed a third-party complaint and counterclaim against Wells Fargo Bank, N.A., solely in its capacity as indenture trustee, asserting claims for negligent misrepresentation based on Wells Fargo’s involvement with the bond documents and official statement.

In the Matter of Edward D. Jones & Co., L.P. Municipal Bond Pricing. On April 27, 2012, the SEC’s Division of Enforcement of the SEC informed Edward Jones that it had commenced an investigation into Nebraska Public Power District’s (“NPPD”) Taxable Build America Bonds, which formed part of NPPD’s 2009 General Revenue Bonds offering. Edward Jones was a co-manager of said offering.is also investigating this matter. The investigation inquired into whether Edward Jones and others may have engaged in possible violations of the Securities Act, the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) (including Section 10(b) and Rule 10b-5 thereunder), and MSRB Rules. In January 2013, the SEC commenced a second investigation that subsumed the one just described, relating more generally to municipal bond pricing, which also inquired into possible violations of the Securities Act, Exchange Act (including Section 10(b) and Rule 10b-5 thereunder), and MSRB Rules.SEC’s review is ongoing. Consistent with its practice, Edward Jones is cooperating fully with the SEC with respect to these investigations. The SEC has stated to Edward Jones with respect to each of the investigations described above that the “investigation is a non-public, fact-finding, informal inquiry, which should not be construed as an indication that the Commission or its staff have determined that any violations of law have occurred,” and the SEC has not taken any action against Edward Jones or others with respect to either investigation.

New Hampshire Investigation. In March 2012, Edward Jones received an inquiry from the State of New Hampshire in connection with its investigation into Edward Jones’ procedures regarding compliance with federal and state telemarketing rules. The state has requested documentation and interviewed individuals at Edward Jones. Edward Jones is engaged in ongoing discussions with the state and has produced documents as requested by the state.

PART I

None.

PART IINot applicable.

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PART II

There is no established public trading market for the Partnership’s limited partnership and subordinated limited partnership interestsInterests and their assignment or transfer is prohibited.  As of February 22, 2013,26, 2016, the Partnership was composed of 14,00919,790 limited partners and 297391 subordinated limited partners.

On January 4, 2016, the Partnership issued an aggregate of $370,500 of Interests to certain retired associates of Edward Jones for aggregate consideration of $370,500 in a private placement in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. 

PART II

The following information sets forth, for the past five years, selected financial data determined from the audited financial statements.

All information included in the Annual Report on Form 10-K is presented on a continuing operations basis unless otherwise noted.

Summary Consolidated Statements of Income Data:

(All dollars in millions, except per unit information and units outstanding)