MISSOURI

Registrant’sRegistrant's telephone number, including area code (314) 515-2000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Limited Partnership Interests

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  ¨o    NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    YES  ¨o    NO  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’sregistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨o    No  x

As of February 28, 2014, 639,23226, 2016, 914,542 units of limited partnership interest (“Interests”) are outstanding, each representing $1,000 of limited partner capital.  There is no public or private market for such Interests.

DOCUMENTS INCORPORATED BY REFERENCE

None

THE JONES FINANCIAL COMPANIES, L.L.L.P.

TABLE OF CONTENTS

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PART I

The Jones Financial Companies, L.L.L.P. (“JFC”) is a registered limited liability limited partnership organized under the Missouri Revised Uniform Limited Partnership Law of the State of Missouri Revised Statutes.Act.  Unless expressly stated, or the context otherwise requires, the terms “Registrant” and “Partnership” refer to JFC and all of its consolidated subsidiaries.  The Partnership’s principal operating subsidiary, Edward D. Jones & Co., L.P. (“Edward Jones”), was organized onin February 20, 1941 and reorganized as a limited partnership onin May 23, 1969. JFC was organized onin June 5, 1987 and, along with Edward Jones, was reorganized onin August 28, 1987.

As of December 31, 2013,2015, the Partnership operates in two geographic segments, the United States (“U.S.”) and Canada.  Edward Jones is comprised of twoa registered broker-dealers primarily serving individual investorsbroker-dealer in the U.S. and throughone of Edward Jones’ subsidiaries is a subsidiary,registered broker-dealer in Canada.  AsJFC is the ultimate parent company of Edward Jones JFCand is a holding company.  Edward Jones primarily derives its revenue from the retail brokerage business through the sale of listed and unlisted securities and insurance products, investment banking, principal transactions, distribution of mutual fund shares, and through fees related to assets held by and account services provided to its clients.clients, including investment advisory services, the purchase or sale of listed and unlisted securities and insurance products, and principal transactions.  Edward Jones conducts business in the U.S. and Canada with its clients, various brokers, dealers, clearing organizations, depositories and banks.  For financial information related to segments for the years ended December 31, 2015, 2014 and 2013, 2012 and 2011, see Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8 – Financial Statements and Supplementary Data – Note 1613 to the Consolidated Financial Statements.

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PART I

ORGANIZATIONAL STRUCTUREOrganizational Structure.

At December 31, 2013,2015, the Partnership was organized as follows:

For additional information about the Partnership’s other subsidiaries and affiliates, see Exhibit 21.21.1.

Branch Office Network.  The Partnership primarily serves serious, long-term individual long-term investors through its extensive network of branch offices.  The Partnership's business model is designed to serve clients through personal relationships with financial advisors and branch office administrators ("BOA") located in the communities where its clients live and work.  Financial advisors and BOAs provide tailored solutions and services to their clients while leveraging the resources of the Partnership's home office.  The Partnership operated 11,64712,482 branch offices as of December 31, 2013,2015, primarily staffed by a single financial advisor and a branch office administrator.BOA.  Of this total, the Partnership operated 11,08311,904 branch offices in the U.S. (located in all 50 states) and 564578 branch offices in Canada.

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Governance.Governance.  Unlike a corporation, the Partnership is not governed by a board of directors and has no individuals who are designated as directors.  Moreover, none of its securities are listed on a securities exchange and therefore the governance requirements that generally apply to many companies that file periodic reports with the U.S. Securities and Exchange Commission (“SEC”) reporting companies do not apply to it.  Under the terms of the Partnership’s EighteenthNineteenth Amended and Restated Agreement of Registered Limited Liability Limited Partnership, Agreement (“the Partnershipdated June 6, 2014, as amended (the “Partnership Agreement”), the Partnership’s Managing Partner has primary responsibility for administering the Partnership’s business, determining its policies and controlling the management and conduct of the Partnership’s business, andits management.  The Managing Partner also has the power to admit and dismiss general partners of JFC and to adjust the proportion of their respective interests in JFC.  As of December 31, 2013,2015, JFC was composed of 371380 general partners, 13,76019,873 limited partners and 297362 subordinated limited partners.  See Part III, Item 10 – Directors, Executive Officers and Corporate Governance for a description of the governance structure of the Partnership.

Revenues by Source.  The following table sets forth the sources of the Partnership’s revenues for the past three years.  Due to the interdependence of the activities and departments of the Partnership’s investment business and the inherently arbitrary assumptions required to allocate overhead, it is impractical to identify and specify expenses applicable to each aspect of the Partnership’s operations.  Further information on revenue related to the Partnership’s segments is provided in Part II, Item 8 – Financial Statements and Supplementary Data – Note 1613 to the Consolidated Financial Statements and Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Asset-based Fees

The Partnership earns fees from investment advisory services offered in the U.S. through Edward Jones Advisory SolutionsSolutions® (“Advisory Solutions”), and Edward Jones Managed Account ProgramProgram® (“MAP”) and in Canada through Edward Jones Portfolio ProgramProgram® (“Portfolio Program”) and Edward Jones Guided Portfolios Program.Portfolios® (“Guided Portfolios”).  Advisory Solutions and MAP are both registered as investment advisory programs with the SECcreated under the Investment Advisers Act of 1940.  Portfolio Program and Guided Portfolios Program are not requiredsubject to be registered under this Act as services from these programs are only offered in Canada.  In January 2016 the Partnership announced its intention to wind down the MAP program offered in the U.S.  The Partnership stopped accepting new assets in the MAP program in January 2016 and intends to close the program by mid-2017.  MAP represents less than 1% of asset-based fees revenue and the Partnership expects most of the client assets will be transferred to other programs which offer investment advisory services.  

PART I

Through Advisory Solutions, providesfinancial advisors provide investment advisory services to its clients for a monthlyan annual fee based upon the average daily market value of their assets in the program, and consists of a managed account investedprogram.  Clients can choose to invest in Advisory Solutions Fund Models, which invests in affiliated mutual funds, unaffiliated mutual funds, and exchange-traded funds (ETFs) and money market funds, or Advisory Solutions Unified Managed Account models, which also include separately managed allocations (SMAs). For this program,allocations.  When investing in Advisory Solutions, the client mustmay elect either a research or a custom account model.  If the client elects a research type model, the Partnership assumes full investment discretion on the account whichand the client assets will be invested in one of numerous different research models developed and managed by Edward Jones’ Mutual Fund Research department.Jones.  If the client elects to build a custom model, the Partnership assumes limited investment discretion on the account developedand the investments are selected by the client and his or her financial advisor.  The vast majority of client assets within Advisory Solutions are invested in research models.

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PART I

In 2013, in order to accommodate the current size and expected growth in investment advisory services offered through Advisory Solutions, in 2013as well as potentially lower client investment management expense, the Partnership launched a new sub-advised mutual fund,formed the Bridge Builder Trust (the “Trust”"Trust"), to offer additional fund options for clients ofinvested in Advisory Solutions.  The Trust added seven sub-advised mutual funds to its series in 2015, bringing the total to eight sub-advised funds.  At its discretion, the Trust may add additional funds in the future.  Olive Street Investment Advisers, L.L.C. (“OLV”("OLV"), a wholly-owned subsidiary of JFC and a Missouri limited liability company, was formed in December 2012 to beis the investment adviser to the Bridge Builder fund. In 2013, the Trust hired OLV as the overall investment adviser to the Trust’scurrent sub-advised mutual fund.funds.  For each of the sub-advised mutual funds in the Trust, OLV has primary responsibility for allocation of funds, setting the mutual fund’s overall investment strategies the selection and management of subadvisors, and supervisory responsibility for the general management of the trust,mutual funds and selecting and managing sub-advisers, subject to the review and approval by itsof the Trust's board of trustees.  As of December 31, 2013,2015, the Trust had client assets under management of $5.9$22.6 billion.

Through the MAP and Portfolio Program, offerfinancial advisors provide investment advisory services to clients for a monthly fee based upon the average value of assets in the program, by using independent investment managers and proprietary asset allocation models.  Guided Portfolios Program is a non-discretionary, fee-based program with structured investment guidelines.

In addition to  Fees for these programs are based on the advisory programs mentioned above,average value of client assets in the Partnership earns asset-based fees from the trust and investment management services offered to its clients through Edward Jones Trust Company (“EJTC”), a wholly-owned subsidiary of JFC.program.

The Partnership also earns revenue on most of its clients’ assets through service fees and other revenues received under agreements with mutual fund and insurance companies.  The fees generally range from 15 to 25 basis points (0.15% to 0.25%) of the value of the client assets held.

In addition, theThe Partnership earns revenue sharing from certain mutual fund and insurance companies.  In most cases, this is additional compensation paid by investment advisers, insurance companies or distributors based on a percentage of average assets held by the Partnership’s clients.

In addition to the advisory programs mentioned above, the Partnership earns asset-based fees from the trust services and investment management services offered to its clients through Edward Jones Trust Company (“EJTC”), a wholly-owned subsidiary of JFC.

The Partnership is a 49.5% limited partner of Passport Research, Ltd. (“Passport Research”), the investment adviser to certainfor two money market funds made available to the Partnership’sEdward Jones clients.  Revenue from this source is primarily based on client assets in the funds.  However, due to the low interest rate environment, the investment adviser voluntarily chose (beginning in March 2009) to reduce certain fees charged to the funds to a level that will maintain a positive client yield on funds.  For further information on this reduction of fees, see Part II, Item 7A – Quantitative and Qualitative Disclosures About Market Risk.  The Partnership has entered into a non-binding letter of intent to acquire the remaining 50.5% of Passport Research from Federated Investment Management Company ("Federated"), the general partner of Passport Research.  The transaction is not expected to have a material impact on the Consolidated Financial Statements.  Federated approved the transfer on February 18, 2016 and the transfer is expected to be completed in the fourth quarter of 2016, subject to customary regulatory and fund shareholder approvals.

PART I

Account and activity fees include shareholder accounting service fees, Individual Retirement Account (“IRA”) custodial service fees, and other product/service fees.

CommissionsThe Partnership charges fees to certain mutual fund companies for shareholder accounting services, including maintaining client account information and providing other administrative services for the mutual funds.  The Partnership acts as the custodian for clients’ IRAs and the clients are charged an annual fee for this and other account services.  Account and activity fees also include sales-based revenue sharing fees, insurance contract services, and fees earned through a co-branded credit card with a major credit card company.

CommissionsTrade Revenue

Trade revenue consists of commissions, charges to clients for the purchase or sale of mutual fund shares, equitieslisted and unlisted equity securities and insurance products. The following briefly describes the Partnership’s sourcesproducts, principal transactions and investment banking.  Trade revenue is impacted by trading volume, size of commissions revenue.trades and market volatility.  

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PART I

Commissions – Mutual Funds.Funds. The Partnership distributes mutual fund shares in continuous offerings and new underwritings.  As a dealer in mutual fund shares, the Partnership receives a dealer’s discount which generally ranges from 1% to 5% of the purchase price of the shares, depending on the terms of each fund’s prospectus and the amount of the purchase.

Listed and Unlisted Securities.Commissions – Equities. The Partnership receives a commission when it acts as an agent for a client in the purchase or sale of listed and unlisted (over-the-counter) securities.  These securities include common and preferred stocks and debt securities traded on and off the securities exchanges. The commission is based on the value of the securities purchased or sold.

Insurance.Commissions – Insurance Products. The Partnership sells life insurance, long-term care insurance, disability insurance, fixed and variable annuities and other types of insurance products of unaffiliated insurance companies to its clients through its financial advisors who hold insurance sales licenses.  As an agent for the insurance companies, the Partnership receives commissions on the premiums paid for the policies.

Account and Activity Fees

Revenue sources include sub-transfer agent accounting services fees, Individual Retirement Account (“IRA”) custodial services fees, and other product/service fees.

The Partnership charges fees to certain mutual fund companies for sub-transfer agent accounting services, including maintaining client account information and providing other administrative services for the mutual funds. Also, the Partnership acts as the custodian for clients’ IRA accounts and the clients are charged an annual fee for this service. Account and activity fees also include sales-based revenue sharing fees pursuant to arrangements with certain mutual fund and insurance companies where the companies pay additional compensation to the Partnership based on a percentage of current year sales by the Partnership of products supplied by these companies. The Partnership earns revenue through a co-branded credit card with a major credit card company. Previously, the Partnership earned revenue from offering mortgage loans to its clients through a joint venture. However, the joint venture partner elected to terminate the arrangement in April 2013 and the joint venture discontinued offering mortgage loans to the Partnership’s clients at that time.

Principal Transactions

The Partnership makes a market. Revenue is earned from the Partnership's distribution of and participation in principal trading activities in municipal obligations, over-the-counter corporate obligations, government obligations,certificates of deposit, unit investment trusts, mortgage-backed securities and certificates of deposit.government obligations.  The Partnership’s market-makingprincipal trading activities are conducted with other dealers in the “wholesale” and “retail” markets where the Partnership acts as a dealer buying from and selling to its clients.  In making markets inprincipal trading of securities, the Partnership exposes its capital to the risk of fluctuation in the fair value of its security positions.  The Partnership maintains securities positions in inventory solely to support its business of buying securities from and selling securities to its retail clients and does not seek to profit by engaging in proprietary trading for its own account.  The related unrealized gains and losses for these securities are recorded within trade revenue.

PART I

As of December 31, 2015, the Partnership closed the negotiated municipal obligations underwriting portion of the investment banking business.  The revenue and costs associated with the closure were immaterial.  

Interest and Dividends

Interest and dividends revenue is earned on client margin (loan) account balances, cash and cash equivalents, cash and investments segregated under federal regulations, securities purchased under agreements to resell, partnership loans, inventory securities and investment securities.  Loans secured by securities held in client margin accounts provide a source of income to the Partnership.  The Partnership is permitted to use securities owned by margin clients having an aggregate market value of generally up to 140% of the debit balance in margin accounts as collateral for the borrowings.  The Partnership may also use funds provided by free credit balances in client accounts to finance client margin account borrowings.

The Partnership’s interest income is impacted by the level of client margin account balances, cash and cash equivalents, cash and investments segregated under federal regulations, securities purchased under agreements to resell, partnership loans, inventory securities and investment securities and the interest rates earned on each.

Investment Banking

Investment banking revenue is primarily derived from the Partnership’s distribution of unit investment trusts, corporate and municipal obligations, and government sponsored enterprise obligations. Investment banking revenue also includes underwriting fee revenue related to underwriting and management fees as well as gross acquisition profit / loss and volume concession revenue, which is earned and collected from the issuer.

The Partnership’s investment banking activities are performed primarily by its Syndicate, Investment Banking and Unit Investment Trust departments. The principal service which the Partnership renders as an investment banker is the underwriting and distribution of securities, either in a primary distribution on behalf of the issuer of such securities or in a secondary distribution on behalf of a holder of such securities. The roles the Partnership may play include senior manager, co-manager, syndicate member, selling group member, dealer or distributor and encompass both negotiated and competitively bid offerings.

The Partnership historically has not, and does not presently engage in other investment banking activities, such as assisting in mergers and acquisitions, arranging private placement of securities issues with institutions, or providing consulting and financial advisory services to entities.

In the case of an underwritten offering managed by the Partnership, the Syndicate, Investment Banking and Unit Investment Trust departments may form underwriting syndicates and work with the branch office network for sales of the Partnership’s own participation and with other members of the syndicate in the pricing and negotiation of other terms. In offerings managed by others in which the Partnership participates as a syndicate, selling group member, dealer or distributor, these departments serve as active coordinators between the managing underwriter and the Partnership’s branch office network.

PART I

The underwriting activity of the Partnership involves substantial risks. An underwriter 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. Furthermore, the commitment of capital to an underwriting may adversely affect the Partnership’s capital position and, as such, its 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 requirements (the “Uniform Net Capital Rule”).

Significant Revenue Source

As of December 31, 2013,2015, the Partnership distributed mutual funds for approximately 7570 mutual fund companies, includingcompanies.  One company, American Funds Distributors, Inc. which, represented 19%20% of the Partnership’s total revenue for the year ended December 31, 2013. This revenue2015, which consisted of commissions,revenue from trades, asset-based fees and account and activity fees, which are described above.  The revenue generated from this company relates to business conducted with the Partnership’s U.S. segment.

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PART I

BUSINESS OPERATIONS

Research Department.  The Partnership maintains a Research department to provide specific investment recommendations and market information for clients.  The department supplements its own research with the services of an independent research service.services.  In addition, the Research department provides recommendations for asset allocation, portfolio rebalancing and investment selections for Advisory Solutions client accounts.

Client Account Administration and Operations. Employees in the  The Partnership has an Operations division arethat is responsible for activities relating to client securities and the processing of transactions with other broker-dealers, exchanges and clearing organizations.  These activities include receipt, identification and delivery of funds and securities, internal financial controls, accounting and personnel functions, office services, custody of client securities and the handling of margin accounts.  The Partnership processes substantiallyvirtually all of its own transactions.

To expedite the processing of orders, the Partnership’s branch office system isoffices are linked to the home office locations through an extensive communications network.  Orders for securities are generally captured at the branch electronically, routed to the home office and forwarded to the appropriate market for execution.  The Partnership’s processing of paperwork following the execution of a security transaction is generally automated.

There is considerable fluctuation during any one year and from year to year in theThe volume of transactions the Partnership processes.processes fluctuates considerably.  The Partnership records such transactions and posts its books on a daily basis.  The Partnership has a computerized branch office communication system which is principally utilized for entry of security orders, quotations, messages between offices, research of various client account information, and cash and security receipts functions.  Home office personnel, including operationsthose in the Operations and compliance personnel,Compliance divisions, monitor day-to-day operations to determine compliance with applicable laws, rules and regulations.  Failure to keep current and accurate books and records can render the Partnership liable to disciplinary action by governmental and self-regulatory organizations (“SROs”).

PART I

The Partnership clears and settles virtually all of its listed and over-the-counter equities, municipal bond, corporate bond, mutual fund and annuity transactions for its U.S. broker-dealer through the National Securities Clearing Corporation (“NSCC”), Fixed Income Clearing Corporation (“FICC”) and Depository Trust Company (“DTC”), which are all subsidiaries of the Depository Trust and Clearing Corporation located in New York, New York.

In conjunction with clearing and settling transactions with NSCC, the Partnership holds client securities on deposit with DTC in lieu of maintaining physical custody of the certificates.  The Partnership also uses a major bank for custody and settlement of U.S. treasury securities and Government National Mortgage Association (“GNMA”)Association), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation issues.

The Canada broker-dealer handles the routing and settlement of client transactions.  In addition, the Canada broker-dealer is a member of the Canadian Depository of Securities (“FHLMC”CDS”) issues.and FundServ for clearing and settlement of transactions.  CDS effects clearing of securities on the Canadian National Stock Exchange, Toronto Stock Exchange (“TSX”) and TSX Venture Exchange (“CDNX”).  Client securities on deposit are also held with CDS and National Bank Correspondent Network.

The Partnership is substantially dependent upon the operational capacity and ability of NSCC, DTC, FICC, and Canadian Depository of Securities (“CDS”).CDS.  Any serious delays in the processing of securities transactions encountered by these clearing and depository companies may result in delays of delivery of cash or securities to the Partnership’s clients.

Broadridge Financial Solutions, Inc. (“Broadridge”), along with its U.S. business, Securities Processing Solutions, U.S., and its international business, Securities Processing Solutions, International, provide automated data processing services for client account activity and related records for the Partnership in the U.S. and Canada, respectively.  The Partnership does not employ its own floor brokers for transactions on exchanges.  The Partnership has arrangements with other brokers to execute the Partnership’s transactions in return for a commission based on the size and type of trade.  If, for any reason, any of the Partnership’s clearing, settling or executing agents were to fail, the Partnership and its clients would be subject to possible loss.  To the extent that the Partnership would not be able to meet the obligations to the clients, such clients might experience delays in obtaining the protections afforded them.

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PART I

The Canada broker-dealer has an agreement with Broadridge to provide the securities processing systems, as well as an agreement with Computershare Trust Company of Canada to act as trustee for cash balances held by clients in their retirement accounts.  The Canada broker-dealer is the custodian for client securities and manages all related securities and cash processing, such as trades, dividends, corporate actions, client cash receipts and disbursements, client tax reporting and statements.

The Canada broker-dealer handles the routing and settlement of client transactions. In addition, the Canada broker-dealer is a member of CDS and FundServ for clearing and settlement of transactions. CDS effects clearing of securities on the Canadian National Stock Exchange (“CNQ”), Toronto Stock Exchange (“TSX”) and TSX Venture Exchange (“CDNX”). Client securities on deposit are also held with CDS and National Bank Correspondent Network (“NBCN”).

Employees.  The Partnership’s financial advisors are employees (or general partners of the Partnership) and are not independent contractors..  As of December 31, 2013,2015, the Partnership had approximately 39,00041,000 full and part-time employees and general partners, including its 13,15814,508 financial advisors.  The Partnership’s financial advisors are generally compensated on a commission basis and may be entitled to bonus compensation based on their respective branch office profitability and the profitability of the Partnership.  The Partnership pays bonuses to its non-financial advisor employees pursuant to a discretionary formula established by management.

PART I

management based on the profitability of the Partnership.

Employees of the Partnership in the U.S. are bonded under a blanket policy as required by Financial Industry Regulation Authority, Inc. (“FINRA”) rules.policy.  The Partnership has a per occurrencean aggregate annual coverage limit in the U.S. of $5,000,000,$50,000,000 subject to a $500,000 deductible provision. In addition, there is excess coverage with an annual aggregate amount of $45,000,000.deductibles.  Employees of the Partnership in Canada are bonded under a blanket policy as required by the Investment Industry Regulation Organization of Canada (“IIROC”).  The Partnership has an annual aggregate amount of coverage in Canada of C$50,000,000 with a per occurrence limit of C$25,000,000, subject to a C$50,000 deductible provision per occurrence.deductible.

The Partnership maintains ana comprehensive initial training program for prospective financial advisors that spans nearly four months andwhich includes preparation for regulatory exams, concentrated instruction in the classroom and on-the-job training in a branch office.  During the first phase, U.S. trainees spend nearly two months studyingstudy Series 7 and Series 66 examination materials and takingtake the examinations.  In Canada, financial advisors have the requisite examinations completed prior to being hired.  After passing the requisite examinations, trainees spend one week incomplete a comprehensive training program in one of the Partnership’s home office training facilities, followed by seven weeks of on-the-job training in their market andrespective markets in a nearby branch location.locations.  This training includes reviewing investments, compliance requirements, office procedures, and understanding client needs, as well as establishing a base of potential clients.  One final week is spent inTo complete the initial comprehensive training program, the trainees return to a home office training facility to complete the initial training program. Five months later,for additional training.  Later in their careers, the financial advisor attends anadvisors attend additional training class in aat home office location. Theoffice.  In addition, the Partnership also offers periodic continuing training to its experienced financial advisors for the entirety of their career.careers.  Training programs for the more experienced financial advisors continue to focus on meeting client needs and effective management of the branch office.

The Partnership considers its employee relations to be good and believes that its compensation and employee benefits, which include medical, life and disability insurance plans, and profit sharing and deferred compensation retirement plans,401(k) plan, are competitive with those offered by other firms principally engaged in the securities business.

Competition.  The Partnership is subject to intense competition in all phases of its business from other securities firms, many of which are substantially larger than the Partnership in terms of capital, brokerage volume and underwriting activities.  In addition, the Partnership encounters competition from other organizations such as banks, insurance companies, and others offering financial services and advice.  The Partnership also competes 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 a fee may be charged to do so.time.  There is also intense competition among firms for financial advisors.  The Partnership experiences continued efforts by competing firms to hire away its financial advisors, although the Partnership believes its rate of turnover of financial advisors is in line with other comparable firms.

REGULATION

Broker-Dealer and Investment Adviser Regulation

Broker-dealers areRegulation. The securities industry is subject to extensive federal and state laws, rules and regulations whichthat cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of client funds and securities, client payment and margin requirements, capital structure of securities firms, record-keeping, and the conduct of directors, officers and employees.

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PART I

The SEC is the federalU.S. agency responsible for the administration of the U.S.federal securities laws.  Its mission is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.  Edward Jones is registered as a broker-dealer and investment adviser with the SEC.  Edward Jones is subject to periodic examinations by the SEC, review by a designated examining authority, and certain periodic and ad hoc reporting requirements of securities and customer funds.  Much of the regulation of broker-dealers has been delegated to SROs, principally FINRA.FINRA, by the SEC.  FINRA adopts rules (which are subject to approval by the SEC) that govern the broker-dealer industry and conducts periodic examinations of Edward Jones’ operations.

Securities firms are also subject to regulation by state securities commissions and insurance regulators in those states in which they conduct business.  Since Edward Jones is registered as a broker-dealer and sells insurance products in all 50 states, Puerto Rico, the U.S. Virgin Islands and the District of Columbia, Puerto RicoEdward Jones is subject to state regulation in all of these states and the U.S. Virgin Islands.territories.

The SEC, SROs and state securities commissionsauthorities may conduct administrative proceedings which can result in censure, fine, suspension or expulsion of a broker-dealer, its officers or employees.  Edward Jones has in the past been, and may in the future be, the subject of regulatory actions by various agencies that have the authority to regulate its activities (see Part I, Item 3 – Legal Proceedings for more information).

As an investment dealer in all provinces and territories of Canada, theEdward Jones' Canada broker-dealer is subject to provincial, territorial and federal laws.  All provinces and territorial jurisdictions have established securities administrators to fulfill the administration of securities laws.  TheEdward Jones' Canada broker-dealer is also subject to the regulation of the Canada SRO, IIROC, which oversees the business conduct and financial affairs of its member firms, as well as all trading activity on debt and equity marketplaces in Canada.  IIROC fulfills its regulatory obligations by implementing and enforcing rules regarding the proficiency, business and financial conduct of member firms and their registered employees, and marketplace integrity rules regarding trading activity on Canada debt and equity marketplaces.

In addition, Edward Jones, OLV and Passport Research are subject to the rules and regulations promulgated under the Investment Advisers Act of 1940 (“Investment Advisers Act”), which requires investment advisers to register with the SEC.  Edward Jones, OLV and Passport Research are registered investment advisers.  The rules and regulations promulgated under the Investment Advisers Act govern all aspects of the investment advisory business, including registration, trading practices, custody of client funds and securities, record-keeping, advertising and business conduct.  Edward Jones, OLV and Passport Research are subject to periodic examinations by the SEC which is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act.

Pursuant to U.S. federal law, Edward Jones as a broker-dealer belongs to the Securities Investors Protection Corporation (“SIPC”).  For clients in the U.S., SIPC provides $500,000 of coverage for missing cash and securities in a client's account, with a maximum of $250,000 for cash claims.  Pursuant to IIROC requirements, the Canada broker-dealer belongs to the Canadian Investor Protection Fund (“CIPF”), a non-profit organization that provides investor protection for investment dealer insolvency.  For clients in Canada, CIPF limits coverage to C$1,000,001,000,000 in total, which can be any combination of securities and cash.

The Partnership currently maintains additional protection for U.S. clients provided by Underwriters at Lloyd’s.  The additional protection contract provided by Underwriters at Lloyd’s protects clients’ accounts in excess of the SIPC coverage subject to specified limits.  This policy covers theft, misplacement, destruction, burglary, embezzlement or abstraction of cash and client securities up to an aggregate limit of $900 million$900,000,000 (with maximum cash coverage limited to $1,900,000 per client calculated on a pro rata basis)client) for covered claims of all U.S. clients of Edward Jones.  Market losses are not covered by SIPC or the additional protection.

In addition, Edward Jonesthe Partnership has cash and OLV are subjectinvestments segregated in special reserve bank accounts for the benefit for U.S. clients pursuant to the rules and regulationsCustomer Protection Rule 15c3-3 of the Investment AdvisersSecurities Exchange Act of 1940 which require investment advisers to register with the SEC. The rules and regulations of the Investment Advisers Act govern all aspects of the investment advisory business, including registration, trading practices, custody of client funds and securities, record-keeping, advertising and business conduct. Edward Jones and OLV are subject to examination by the SEC who is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act.1934, as amended (“Customer Protection Rule”).  

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PART I

Additional legislation, changes in rules promulgated by the SEC, the Department of Labor ("DOL") and SROs, and/or changes in the interpretation or enforcement of existing laws and rules, may directly affect the operations and profitability of broker-dealers and investment advisers.  With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the SEC has been directed to study existing practices in the industry and granted discretionary rulemaking authority to establish, among other things, comparable standards of conduct for 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 SEC may engage in rulemaking or issue interpretive guidance concerning the standard of conduct for broker-dealers and investment advisers.  FINRA or other regulatory authorities may also issue rules related to the Dodd–Frank Act, but it is unclearAct.  In addition, the DOL has published a proposed rule on the definition of the term "fiduciary" and exemptions related thereto in the context of the Employee Retirement Income Security Act.  The Partnership cannot predict at this time what impact such rulemaking activities will have on the Partnership or its operations.

Trust Regulation of EJTC and Regulation of JFC as EJTC’s Parent

Parent.EJTC is a federally chartered savings and loan association and, effective October 31, 2012,that operates under a limited purpose “trust-only” charter, which generally restricts EJTC to acting solely in a trust or fiduciary capacity.  EJTC isand JFC are subject to supervision and regulation by the Office of the Comptroller of the Currency (“OCC”). EJTC’s limited purpose charter allowed JFC to deregister as a savings and loan holding company subject to regulation by the Federal Reserve. JFC is currently subject to supervision and regulation by the OCC.

Uniform Net Capital Rule

Rule.As a result of its activities as a broker-dealer and a member firm of FINRA, Edward Jones is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (“Uniform Net Capital Rule”) which is designed to measure the general financial integrity and liquidity of a broker-dealer and the minimum net capital deemed necessary to meet the broker-dealer’s continuing commitments to its clients.  The Uniform Net Capital Rule provides for two methods of computing net capital and Edward Jones has adopted what is generally referred to as the alternative method.  Minimum required net capital under the alternative method is equal to the greater of $250,000 or 2% of the aggregate debit items, as defined.defined under the Customer Protection Rule.  The Uniform Net Capital Rule prohibits withdrawal of equity capital whether by payment of dividends, repurchase of stock or other means, if net capital would thereafter be less than minimum requirements.  Additionally, certain withdrawals require the approval of the SEC to the extent they exceed defined levels even though such withdrawals would not cause net capital to be less than 5% of aggregate debit items.  In computing net capital, various adjustments are made to exclude assets which are not readily convertible into cash and to provide a conservative valuation of other assets, such as securities owned.  Failure to maintain the required net capital may subject Edward Jones to suspension or expulsion by FINRA, the SEC and other regulatory bodies and/or exchanges and may ultimately require liquidation.  Edward Jones has, at all times, been in compliance with the Uniform Net Capital Rule.

The Canada broker-dealer and EJTC are also required to maintain specified levels of regulatory capital.  Each subsidiaryof these subsidiaries has, at all times, been in compliance with the applicable capital requirements in the jurisdictions in which it operates.

PART I

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.

AVAILABLE INFORMATION

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 atwww.sec.gov.

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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

MARKETarket CONDITIONSonditions — As a part of the securities industry, a downturn in the U.S. and/or global securities markets historically has, and in the future could have, a significant negative effect on revenues and could significantly reduce or eliminate profitability of the 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 as well as debt ceiling debates and sovereign credit downgrades, could make the capital markets increasingly volatile.  Weakened global economic conditions and unsettled financial markets, among other things, could cause significant declines in the Partnership’s net revenues which would adversely impact its overall financial results.

As the Partnership’s composition of net revenue becomes more heavily weighted towards asset-based fee revenue, a decrease in the market value of assets can have a greater 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.

PART I

Financial markets continueFurthermore, if the market were to experience volatility anda downturn or the riskseconomy were to sustained global economic growth remain. 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 the market were to experience a downturn or the economy were to enter into a 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.  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, or 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 President oninto 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; and (ii) pursuant to Section 914 of the Dodd-Frank Act, a new SRO to regulate investment 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.

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 tore-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 it will be re-proposed or adopted, or what the impact will be on the Partnership. However, any such rule could impact the operationsPartnership's results of Edward Jones and the profitability of the Partnership.

PART I

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.operations.  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.    

Health Care Reform.  The Patient Protection and Affordable Care Act, (“PPACA”)which was signed into law in March, 2010, amended and revised by the Health Care and Education and Reconciliation Act of 2010 (“collectively(collectively referred to as the “Affordable Care Act”).  The Affordable Care Act requires employers to provide affordable coverage with minimum value to full-time employees or pay a financial penalty and pay other fees for providing coverage. The Affordable 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 place certain requirements on plan design. Regulatory guidance required to fully assess the impact of this law is still forthcoming. The impact on 2014 is expected to be immaterial.Partnership.  The Partnership is not yet able to determine the full potential financial impact on its operating results for fiscal 2015 and beyond.of the Affordable Care Act.

Federal “Do Not Call” Regulations.The Partnership is also subject to federal 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 affected the manner in which many of its financial advisors conduct their businesses. While the Partnership believes it is in compliance with these regulations, these regulations could impact the Partnership’s future revenues or results of operations.

Money Market Mutual Funds. On June 5, 2013,Funds.  The SEC adopted amendments to the SEC proposed rules to reformthat govern money market mutual funds.funds in July 2014.  The proposal includes two alternative reforms, which could be adopted separately or in combination. The first alternative would require institutional prime funds to move to a floatingamendments preserve stable net asset value (“NAV”). Alternative one would maintain the stable NAV for all government money marketcertain retail funds and other retail money market funds, defined by the proposal as any money market funds that limit shareholder redemptions to no more than $1 million per business day. Alternative two would permit money market funds to maintain a stable NAV, but provide forgovernment funds.  The amendments also impose, under certain circumstances, liquidity fees and redemption gates as a mechanismon non-government funds.  The Partnership continues to counter shareholder redemptions in timesevaluate the impact of market stress.these amendments on its operations and to consider the implementation of policies and procedures to address the amendments.

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This alternative would require a non-government money market fund’s board to impose a two percent liquidity fee if a fund’s level of liquid assets falls below 15% of the fund’s total assets, unless the board determines this is not in the shareholder’s best interest. The fund board could also postpone or gate shareholder redemptions for up to 30 days should a fund fall below the 15% threshold. The SEC’s proposal also includes additional diversificationThese Legislative and disclosure requirements that would apply under either alternative. The Partnership cannot predict with any certainty whether the SEC will adopt one of these alternatives, a hybrid approach combining the two alternatives, or decide to take a completely different approach to money market reform based on the written comments received from interested parties to this proposal. SEC adoption of any money market reform could have a financial impact on the Partnership’s operating results, but the Partnership has not yet been able to determine what that impact may be.

The Regulatory Initiatives may impact the manner in which the Partnership markets its products and services, manages its business and operations, and interacts with clients and regulators, any or all of which could materially impact the Partnership’s results of operations, financial condition, and liquidity.  Regulatory changes or changes in the law could increase 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 Regulatory Initiatives will be enacted or the impact that any Legislative and Regulatory Initiatives will have on the Partnership.

COMPETITIONompetition —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.  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’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 -– Business – Business Operations -– Competition.

PART I

BRANCHranch 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.

INABILITYTOnability to ACHIEVEchieve 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 downturns,volatility 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,volatility, the Partnership has not historically been able to consistently meet its growth objectives. For 2013, the Partnership grew by 695 financial advisors, slightly less than its annual growth objective.  There can be no assurance that the Partnership will be able to grow at desired rates in future periods or maintain its current number of financial advisors.

PART I

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.  The Partnership may 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 increase in the future.

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.

INCREASEDncreased FINANCIALinancial ADVISORdvisor COMPENSATIONompensation —The Partnership has recently increased the compensation it paysCompensation paid to new financial advisors, and implementedas well as current financial advisors participating in a retirement transition plan, for current financial advisors, both of which could negatively impact itsthe Partnership’s profitability and capital.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 guaranteedbase compensation in order to meet the Partnership’s growth objectives and ability to serve more clients.  If this increase in new financial advisor base compensation 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, a newthe Partnership, in certain circumstances, offers individually tailored retirement transition plan has recently been announced that offersplans 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.

LITIGATIONANDitigation 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.

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.

PART I

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.

RELIANCEONeliance 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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CANADAanada OPERATIONSperations —The Partnership is focusing heavily on efforts,has made, and intends to continue to make, substantial investments to support its Canada 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.  Canada operations have operated at a substantial deficit from inception.  The Partnership intends to make additional investments in its Canada operations to address short-term liquidity, capital, or expansion needs, which could be substantial.

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

PART I

CAPITALapital REQUIREMENTS;equirements; UNIFORMniform NETet 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 Canada 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.

LIQUIDITYiquidity —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.  A tight credit market environment could have a negative impact on the 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 a tight credit market.  In a tight credit market, lenders may 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.  In addition, there is increased focus by regulators on the importance of effective liquidity risk management practices.

Many limited partners have financedfinance their initial or subsequent 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. However,loans.  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 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 members of the Executive Committee) who require financing for some or all of their Partnership capital contributions.  Additionally, in limited circumstances, a general partner may withdraw from the Partnership and become a subordinated limited partner while he or she still has an outstanding Partnershippartnership 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 the primean interest rate as defined in the loan documents. The Partnership recognizes interest income for the interest earned from general partners in connection with such loans. General partners borrowing from the Partnership will be required to repay such loans by applying their Partnership earnings to such loans, net of amounts retained by the Partnership in accordance with the Partnership Agreement and amounts distributed for income taxes.  The Partnership has full recourse against any general partner that defaults on his or her Partnership loan obligations.  However, there is no assurance that general partners will be able to repay the interest and/or the principal amount of their Partnership loans at or prior to 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.

UPGRADEOFpgrade of TECHNOLOGICALechnological SYSTEMSystems —The Partnership will 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.

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

A 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 a 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 a low interest rate environment than interest expense.

PART I

CREDITredit 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 Federal 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 10 – Director’s,Directors, Executive Officers and Corporate Governance, for more information about the Partnership’s credit risk.

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PART I

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, the 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.  In addition, theThe 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 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 OPERATIONSUnderwriting, Syndicate and Trading Position Risks —Any substantial disruption to the Partnership’s business and operations could lead to significant financial loss to its business and operations as well as harm relations with its clients.

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 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’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, 2013, it is anticipated that this process will take a few more 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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PART I

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.

TRANSACTIONransaction 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 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.

INVESTMENTnvestment ADVISORYdvisory ACTIVITIESctivities —The Partnership’s investment advisory businesses may be affected by the investment performance of its portfolios.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) of programs constructed by the Partnership may affect itsthe 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.

MANAGEMENTOF SUB-ADVISERS

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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.sub-advisers and other third party service providers.

Serving as anAs a sponsor and investment adviser to proprietary mutual funds, subjects the Partnership, through its ownership of OLV, the investment adviser to the Bridge Builder fund, tomay experience additional operational risk and regulatory requirements whichattributed 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 result in financial losses and/or disciplinary action by governmental agencies and/or SROs.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

HOLDINGolding 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 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.

SUFFICIENCYOFufficiency of DISTRIBUTIONSTOistributions to REPAYepay FINANCINGinancing —Limited partners may finance their purchase of the Interests with a bank loan.  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.  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.

PART I

STATUStatus ASs PARTNERartner FORor TAXax PURPOSESurposes and Tax Risks —Limited partners will beare 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 will beare required to file tax returns and pay income tax in each jurisdictionthose states and foreign jurisdictions in which the Partnership operates, as well as in the limited partner’s state of residence or domicile.  Limited partners will beare 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, fromunder 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.

POSSIBLE TAX LAW CHANGES –Federal legislation could significantly impact a limited partner’s taxes by imposing self-employment taxes on such Interest.

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 theirhis 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 MARKETarket, 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.

PART I

RISKOFisk 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 in securities in preparation for its anticipatedof Interests to be issued pursuant to the Partnership’s 2014 Employee Limited Partnership offering. TheInterest Purchase Plan (the “Plan”).  On January 2, 2015, the Partnership intends to offer approximately $300issued $292 million of Interests in newconnection with the Plan.  In addition, on January 4, 2016, the Partnership issued additional Interests to eligible financial advisors, branch office administrators and home office associates.individuals participating in retirement transition plans pursuant to the Plan.  The remaining $50$58 million of Interests may be issued in connection with the Plan at the discretion of the Executive Committee, which may include issuances to financial advisors who complete a retirement transition planPartnership in future years and who may be considered for additional limited partnership interest. The 2014 Limited Partnership offering is expected to close early next year.the future.  The issuance of limited partnership interestsInterests will reduce the percentage of participation in net income by general partners, subordinated limited partners and currentpre-existing limited partners. Proceeds from the 2014 Limited Partnership offering are expected to be used toward working capital and general corporate purposes and to ensure there is adequate general liquidity of the Partnership for future needs.

Any additionissuance of newadditional Interests will decrease the Partnership’s net interest income by the 7.5% Payment 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.  Accordingly, the issuance of newadditional Interests will reduce the Partnership’s net interest income and profitability beginning in 2015.profitability.

In 2013,2015, the Partnership retained approximately 14%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).  Retention for 20142016 is expected to remain at approximately 14%.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.

RISKisk OFf LOSSoss —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 the annual 7.5% PaymentPayments on his or her contributed capital.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.

PART I

FOREIGNoreign EXCHANGExchange RISKisk FORor CANADIANanada RESIDENTSesidents — 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 will purchase the 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 on and 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, 2013,2015, 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 Canada home office facility in Mississauga, Ontario through an operating lease.  The Partnership also maintains facilities in 11,64712,482 branch locations as of December 31, 2013,2015, 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.

Countrywide. 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; 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 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 granted final approval of a settlement for these three cases however, have been settled, and on December 6, 2013, the court granted plaintiffs’ motion for final approval of the settlement.2013. The settlement that was approved by the court (1) establishes a fund to be paid exclusively by Countrywide, (2) contains a complete release for all defendants in all three cases, including Edward Jones, (3) contains proposals for the administration of the settlement fund, and (4) provides for the dismissal of all three cases once the Court enters the final approval of the settlement and enters a final judgment. Because Edward Jones was being indemnified and defended in all three cases, Edward Jones will not be paying and is not requiredexpected to pay any money intohave a material adverse impact on the settlement fund. On December 17, 2013, the Court entered the final judgment and dismissal for all three cases.Partnership’s consolidated financial condition. On January 14, 2014, some objectors to the class action settlement filed their Noticea notice of Appealappeal of the Court’s final judgment and dismissal. Thedismissal, and the appeal will be heard byis currently pending in the Ninth CircuitU.S. Court of Appeals but no briefing schedule has been entered.for the Ninth Circuit.

On August 10, 2012, the 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 tranche of any offering for which Edward Jones acted as dealer. Following defendant’s motion to dismiss, plaintiffs filed their first amended complaint on November 6, 2012.sought compensatory damages and attorneys’ fees and costs. On April 8, 2013, the Court dismissedFDIC v. Countrywide this case based on statute of limitations grounds. The FDIC filed itsa notice of appeal of the Court’s dismissal on October 3, 2013.2013 and filed their opening brief on April 6, 2015.  The appeal is pending.

On December 12, 2013, a case was filedcurrently pending in the SuperiorU.S. Court of the State of California, County of Los Angeles, Northwest District styled Triaxx Prime CDO 2006-1 LTD et al. v. Banc of America Securities, LLC et al. The case involves allegations regarding the sale of Countrywide Private Label Mortgage Backed Securities. The complaint alleges that Edward Jones was the underwriter for two tranches of securities sold to the plaintiffs. Edward Jones denies that it was the underwriter for said tranches. The plaintiffs seek damages in an amount to be determined at trial and the consideration paidAppeals for the tranches at issue, less any income received on the tranches. The defendants removed the case to federal court on January 10, 2014.Ninth Circuit.

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PART I

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 lawsuit in the Circuit Court of St. Louis County, Missouri. The petition allegesalleged that Edward Jones breached its fiduciary duties and was unjustly enriched through the use of an online life insurance needs calculator that plaintiff claims inflated the amount of insurance he needed. Plaintiff seeksThe plaintiff sought damages on behalf of Missouri residents who purchased certain life insurance products from Edward Jones between March of 2008 and the present, 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. The litigation is in the pleading stage and no class has been certified.

Nicholas Maxwell, individually and on behalf of all others similarly situated. Edward Jones was named as a defendant in a putative class action complaint in Alameda Superior Court. 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 alleges that Edward Jones improperly charged its California financial advisors fees, costs, and expenses related to trading errors or “broken” trades, and failed to timely pay wages at termination; however plaintiff does not allege a specific amount of damages. Plaintiff filed the complaint on DecemberOn August 18, 2012 and2014, Edward Jones filed its answer on February 6, 2013. Plaintiff has not yet filed hisa motion for class certification.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 October 20, 2015.  On January 26, 2016, the Supreme Court of Missouri denied the plaintiff's application to transfer the case. 

Tribune. In August 2011, retirees of Times Mirror/Tribune Company filed suit in the U.S. District Court for the SouthernDistrict 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 and other brokerage firms for the purpose of financing construction of an event center in Prescott Valley, Arizona. Edward Jones sold approximately $2.9 millionthat it was investigating whether any violations of the bonds. The plaintiffs allege the underwriters, including Edward Jones, made material misrepresentationsfederal securities laws or rules have occurred with respect to mutual fund purchases 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 bondssales charge waivers for certain retirement plan and Wells Fargo filed a separate action as indenture trusteecharitable organization accounts.  As previously disclosed, 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. Plaintiffs are seeking an unspecified amount of damages including attorneys’ fees, costs, expenses, rescission or statutory damages, out-of-pocket damages and prejudgment interest. The Court entered an order on September 13, 2013, granting in part and denying in part various motions for summary judgment filed by Edward Jones. The only remaining claims against Edward Jones stem from allegations that defendants violated the Arizona Securities Act. A one month trial is set for September, 2014.

PART I

FINRA Exchange-Traded Funds Matter. On January 9, 2014,October 26, 2015, Edward Jones, without admitting or denying the findings, entered into a Letter of Acceptance, Waiver and Consent related to tradingsettlement agreement with FINRA in nontraditional exchange traded funds forconnection with this investigation. On June 12, 2015, the period June 2008 to July 2009. Edward Jones, without admitting or denying the findings, was censured, fined $200,000, and ordered to pay restitution of $51,581.25 to clients. The restitution is to be paid on or about May 9, 2014.

In the Matter of Edward D. Jones & Co., L.P. Municipal Bond Pricing. On April 27, 2012, the SEC’s Division of Enforcement informed Edward Jones it had commenced an investigation into Nebraska Public Power District’s (“NPPD”) Taxable Build America Bonds (“BAB”), which formed part of NPPD’s 2009 General Revenue Bonds offering. Edward Jones was a co-manager of that offering. The investigation inquired into whether Edward Jones and others may have engaged in possible violations of the Securities Act, the 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 an investigation that subsumed the one just described, relating more generally to municipal bond pricing and inquiring into the same possible violations. In August 2013, the SEC’s Division of Enforcement informed Edward Jones that it was requesting certain additional information growing out of a 2010 examination conducted by the SEC’s Office of Compliance Inspections and Examinations. 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 this investigation. On October 30, 2013, the Special Inspector General for the Troubled Asset Relief Program issued a subpoena to Edward Jones requesting documents relating to certain BAB transactions and informed Edward Jones that it is in the process of reviewing these issues.also investigating this matter. The SEC’s review is ongoing. Consistent with its practice, Edward Jones is cooperating fully with the SEC and the Special Inspector General with respect to these investigations.

New Hampshire Investigation. In March 2012, Edward Jones received an inquiry from the New Hampshire Bureau of Securities Regulation (“the Bureau”) in connection with its investigation into Edward Jones’ telephone solicitation practices and procedures. On April 11, 2013, the Bureau filed an administrative action against Edward Jones relating to these matters. On February 25, 2014, Edward Jones, without admitting or denying the facts or allegations contained therein, entered into a Consent Order with the Bureau in which Edward Jones agreed to cease and desist from further violations of N.H. RSA 421-B, pay the Bureau’s costs of investigation in the amount of $175,000, make a payment to the New Hampshire Investor Education Fund in the amount of $175,000, and pay an administrative fine in the amount of $400,000. Edward Jones also agreed to certain undertakings with respect to its policies and procedures in this area.investigation.

None.Not 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 December 31, 2013,February 26, 2016, the Partnership was composed of 13,76019,790 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. 

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:

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 480,Distinguishing Liabilities from Equity (“ASC 480”), the Partnership presents net income of $0 on its Consolidated Statements of Income.  See Part II, Item 8 – Financial Statements and Supplementary Data – Note 1 to the Consolidated Financial Statements for further discussion.

PART II

Summary Consolidated Statements of Financial Condition Data:

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PART II

The following Management’s Discussion and Analysis is intended to help the reader understand the results of operations and the financial condition of the Partnership.  Management’s Discussion and Analysis should be read in conjunction with the Partnership’s Consolidated Financial Statements and accompanying notes included in Part II, Item 8 – Financial Statements and Supplementary Data of this Annual Report on Form 10-K.  All amounts are presented in millions, except as otherwise noted.

Basis of Presentation

The Partnership broadly categorizes its net revenues into four categories: fee revenue, trade revenue (revenue from client buy or sell transactions of securities), fee revenue, net interest and dividends revenue (net of interest expense) and other revenue.  In the Partnership’s Consolidated Statements of Income, trade revenue is composed of commissions, principal transactions and investment banking. Feefee revenue is composed of asset-based fees and account and activity fees.  These sources of revenue are affected by a number of factors. Trade revenue is impacted bycomposed of commissions earned from the numberpurchase or sale of financial advisors, trading volume (client dollars invested), mix of themutual fund shares, listed and unlisted equities and insurance products, in which clients invest, margins earned on the transactions and market volatility.principal transactions.  Asset-based fees are generally a percentage of the total value of specific assets in client accounts.  These fees are impacted by client dollars invested in and divested from the accounts which generate asset-based fees and change in market values of the assets.  Account and activity fees and other revenue are impacted by the number of client accounts and the variety of services provided to those accounts, among other factors.  Trade revenue is impacted by the number of financial advisors, trading volume (client dollars invested), mix of the products in which clients invest, margins earned on the transactions and market volatility.  Net interest and dividends revenue is impacted by the amount of cash and investments, receivables from and payables to clients, the variability of interest rates earned and paid on such balances, the number of Interests, and the balances of partnership loans, long-term debt and liabilities subordinated to claims of general creditors.loans.

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PART II

OVERVIEW

The following table sets forth the change in major categories of the Consolidated Statements of Income as well as several key related metrics for the last three years.  Management of the Partnership relies on this financial information and the related metrics to evaluate the Partnership’s operating performance and financial condition. All amounts are presented in millions, except the number of financial advisors and as otherwise noted.