Virtu Itg 10-Q 9 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 20, 2015
Document and Entity Information
Entity Registrant Name	INVESTMENT TECHNOLOGY GROUP, INC.
Entity Central Index Key	920,424
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		33,583,719
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Condensed Consolidated Statemen

Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 166,605	$ 275,210
Cash restricted or segregated under regulations and other	35,067	38,080
Deposits with clearing organizations	96,242	72,527
Securities owned, at fair value	7,941	12,073
Receivables from brokers, dealers and clearing organizations	1,131,187	644,614
Receivables from customers	64,095	107,935
Premises and equipment, net	52,991	60,306
Capitalized software, net	39,351	38,333
Goodwill	12,349	12,803
Intangibles, net	29,180	31,595
Income taxes receivable	923	105
Deferred taxes	33,976	37,209
Other assets	23,910	20,059
Total assets	1,693,817	1,350,849
Liabilities:
Accounts payable and accrued expenses	161,252	199,211
Short-term bank loans	65,013	78,360
Payables to brokers, dealers and clearing organizations	1,009,867	600,041
Payables to customers	50,279	11,132
Securities sold, not yet purchased, at fair value	4,851	8,253
Income taxes payable	7,729	19,772
Deferred taxes		703
Term debt	10,414	17,781
Total liabilities	$ 1,309,405	$ 935,253
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.01 par value; 100,000,000 shares authorized; 52,300,885 and 52,229,962 shares issued at September 30, 2015 and December 31, 2014, respectively	$ 523	$ 522
Additional paid-in capital	238,379	240,135
Retained earnings	491,729	487,462
Common stock held in treasury, at cost; 18,718,888 and 18,000,756 shares at September 30, 2015 and December 31, 2014, respectively	(327,892)	(306,629)
Accumulated other comprehensive income (net of tax)	(18,327)	(5,894)
Total stockholders' equity	384,412	415,596
Total liabilities and stockholders' equity	$ 1,693,817	$ 1,350,849

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Statements of Financial Condition
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	52,300,885	52,229,962
Common stock held in treasury, at cost; shares	18,718,888	18,000,756

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Commissions and fees	$ 89,934	$ 102,900	$ 319,720	$ 317,777
Recurring	26,659	26,452	80,038	77,004
Other	3,816	5,421	10,872	16,067
Total revenues	120,409	134,773	410,630	410,848
Expenses:
Compensation and employee benefits	46,305	52,408	157,612	156,305
Transaction processing	21,621	21,561	71,381	62,166
Occupancy and equipment	14,229	14,937	43,071	45,000
Telecommunications and data processing services	12,779	12,942	38,562	38,294
Other general and administrative	21,856	20,281	82,021	60,101
Interest expense	429	566	1,402	1,796
Total expenses	117,219	122,695	394,049	363,662
Income before income tax expense	3,190	12,078	16,581	47,186
Income tax expense	480	713	7,348	9,275
Net income	$ 2,710	$ 11,365	$ 9,233	$ 37,911
Income per share:
Basic (in dollars per share)	$ 0.08	$ 0.32	$ 0.27	$ 1.06
Diluted (in dollars per share)	$ 0.08	$ 0.32	$ 0.26	$ 1.04
Basic weighted average number of common shares outstanding (in shares)	33,859	35,093	34,066	35,628
Diluted weighted average number of common shares outstanding (in shares)	34,547	36,026	34,976	36,599

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss and Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 2,710	$ 11,365	$ 9,233	$ 37,911
Other comprehensive loss, net of tax:
Currency translation adjustment	(7,414)	(9,668)	(12,433)	(7,486)
Other comprehensive loss	(7,414)	(9,668)	(12,433)	(7,486)
Comprehensive (loss) income	$ (4,704)	$ 1,697	$ (3,200)	$ 30,425

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Common Stock Held in Treasury	Accumulated Other Comprehensive Income.	Total
Balance at Dec. 31, 2014		$ 522	$ 240,135	$ 487,462	$ (306,629)	$ (5,894)	$ 415,596
Increase (Decrease) in Stockholders' Equity
Net income				9,233			9,233
Other comprehensive loss						(12,433)	(12,433)
Issuance of common stock in connection with director stock option exercises (46,864 shares) and restricted share awards (1,043,175 shares), including a net excess tax benefit of $2.9 million			(15,162)		18,789		3,627
Issuance of common stock for the employee stock purchase plan (70,924 shares)		1	1,166				1,167
Shares withheld for net settlement of share-based awards (380,153 shares)					(8,397)		(8,397)
Purchase of common stock for treasury (1,432,159 shares)					(31,727)		(31,727)
Dividend declared on common stock	$ 0		2	(4,966)	72		(4,892)
Share-based compensation			12,238				12,238
Balance at Sep. 30, 2015		$ 523	$ 238,379	$ 491,729	$ (327,892)	$ (18,327)	$ 384,412

Condensed Consolidated Stateme7

Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2015USD ($)shares
Condensed Consolidated Statement of Changes in Stockholders' Equity
Issuance of common stock for employee stock option exercises, shares	46,864
Issuance of common stock for restricted share awards, shares	1,043,175
Increase in current taxes payable | $	$ 2.9
Issuance of common stock for the employee stock purchase plan, shares	70,924
Shares repurchased to satisfy minimum statutory withholding tax upon the net settlement of equity awards	380,153
Shares Repurchased Under Board Authorization	1,432,159

Condensed Consolidated Stateme8

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from Operating Activities:
Net income	$ 9,233	$ 37,911
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,324	37,889
Deferred income tax expense	3,245	1,571
Provision for doubtful accounts	587	424
Non-cash share based compensation	12,238	11,092
Changes in operating assets and liabilities:
Cash restricted or segregated under regulations and other	2,918	(625)
Deposits with clearing organizations	(23,715)	41,136
Securities owned, at fair value	3,122	(15,276)
Receivables from brokers, dealers and clearing organizations	(500,565)	172,138
Receivables from customers	42,018	431,107
Accounts payable and accrued expenses	(34,125)	11,196
Payables to brokers, dealers and clearing organizations	414,725	(297,249)
Payables to customers	42,100	(393,145)
Securities sold, not yet purchased, at fair value	(2,380)	20,776
Income taxes receivable/payable	(9,644)	(69)
Excess tax benefit from share-based payment arrangements	(2,920)	(1,065)
Other, net	(4,794)	(5,153)
Net cash (used in) provided by operating activities	(14,633)	52,658
Cash flows from Investing Activities:
Investment in unconsolidated affiliates		(2,669)
Acquisition of subsidiaries, net of acquired cash		(18,293)
Capital purchases	(5,792)	(8,239)
Capitalization of software development costs	(19,761)	(19,905)
Net cash used in investing activities	(25,553)	(49,106)
Cash flows from Financing Activities:
Repayments of long term debt	(7,367)	(9,395)
(Repayments of) proceeds from borrowing under short-term bank loans	(13,347)	16,387
Excess tax benefit from share-based payment arrangements	2,920	1,065
Common stock issued	1,911	990
Common stock repurchased	(31,727)	(36,128)
Dividends paid	(4,712)
Shares withheld for net settlements of share-based awards	(8,397)	(6,586)
Net cash used in financing activities	(60,719)	(33,667)
Effect of exchange rate changes on cash and cash equivalents	(7,700)	(3,321)
Net decrease in cash and cash equivalents	(108,605)	(33,436)
Cash and cash equivalents - beginning of year	275,210	261,897
Cash and cash equivalents - end of period	166,605	228,461
Supplemental cash flow information
Interest paid	2,836	2,982
Income taxes paid	$ 13,884	$ 7,579

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Sep. 30, 2015
Organization and Basis of Presentation
Organization and Basis of Presentation	(1) Organization and Basis of Presentation Investment Technology Group, Inc. was formed as a Delaware corporation on July 22, 1983. Its principal subsidiaries include: (1) ITG Inc., AlterNet Securities, Inc. (“AlterNet”) and ITG Derivatives LLC (“ITG Derivatives”), institutional broker-dealers in the United States (“U.S.”), (2) ITG Canada Corp., an institutional broker-dealer in Canada, (3) Investment Technology Group Limited, an institutional broker-dealer in Europe, (4) ITG Australia Limited, an institutional broker-dealer in Australia, (5) ITG Hong Kong Limited, an institutional broker-dealer in Hong Kong, (6) ITG Software Solutions, Inc., our intangible property, software development and maintenance subsidiary in the U.S., and (7) ITG Solutions Network, Inc., a holding company for ITG Analytics, Inc., a provider of pre- and post-trade analysis, fair value and trade optimization services, ITG Investment Research, Inc. (“ITG Investment Research”), a provider of independent data-driven investment research, and ITG Platforms Inc., a provider of trade order and execution management technology and network connectivity services for the financial community. ITG is an independent execution broker and research provider that partners with global portfolio managers and traders to provide unique data-driven insights throughout the investment process. From investment decision through to settlement, ITG helps clients understand market trends, improve performance, mitigate risk and navigate increasingly complex markets. A leader in electronic trading since launching the POSIT crossing network in 1987, ITG takes a consultative approach in delivering the highest quality institutional liquidity, execution services, analytical tools and proprietary research. The firm is headquartered in New York with offices in North America, Europe, and the Asia Pacific region. The Company’s business is organized into four reportable operating segments (see Note 14, Segment Reporting, to the condensed consolidated financial statements):  U.S. Operations  Canadian Operations  European Operations and  Asia Pacific Operations The four operating segments offer a wide range of solutions for asset managers and broker-dealers in the areas of electronic brokerage; research, sales and trading; platforms; and analytics. These offerings include trade execution services and solutions for portfolio management, as well as investment research, pre-trade analytics and post-trade analytics and processing. Effective in the first quarter of 2015, the Company is presenting its regional segment results excluding the impact of corporate activity. For this purpose, corporate activity includes investment income from all treasury activity as well as costs not associated with operating the businesses within the Company’s regional segments. These costs include, among others, (a) the costs of being a public company, such as certain staff costs, a portion of external audit fees, and reporting, filing and listing costs, (b) intangible asset amortization, (c) interest expense, (d) professional fees associated with our global transfer pricing structure, (e) foreign exchange gains or losses and (f) certain non-operating expenses. Prior to this change in segment measure, corporate activity was included in the region where the income/expense was earned/incurred, which primarily was in the U.S. Operations segment. Prior period segment data has been restated to conform to the 2015 presentation. The condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for the fair presentation of results. Certain reclassifications have been made to the following prior year asset balances to conform to the current year presentation: (i) cash restricted or segregated under regulations and other , (ii) deposits with clearing organizations, (iii) receivables from brokers, dealers and clearing organizations and (iv) other assets. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets, liabilities, revenues and expenses. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with Securities and Exchange Commission (“SEC”) rules and regulations; however, management believes that the disclosures herein are adequate to make the information presented not misleading. This report should be read in conjunction with the audited financial statements and the notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Accounting Standard to be Adopted in Future Period In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of the ASU on its condensed consolidated balance sheets.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Fair Value Measurements	(2) Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, various methods are used including market, income and cost approaches. Based on these approaches, certain assumptions that market participants would use in pricing the asset or liability are used, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable firm inputs. Valuation techniques that are used maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, fair value measured financial instruments are categorized according to the fair value hierarchy prescribed by ASC 820, Fair Value Measurements and Disclosures . The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: · Level 1: Fair value measurements using unadjusted quoted market prices in active markets for identical, unrestricted assets or liabilities. · Level 2: Fair value measurements using correlation with (directly or indirectly) observable market-based inputs, unobservable inputs that are corroborated by market data, or quoted prices in markets that are not active. · Level 3: Fair value measurements using inputs that are significant and not readily observable in the market. Level 1 consists of financial instruments whose value is based on quoted market prices such as exchange-traded mutual funds and listed equities. Level 2 includes financial instruments that are valued based upon observable market-based inputs. Level 3 is comprised of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are generally less readily observable. Fair value measurements for those items measured on a recurring basis are as follows (dollars in thousands): September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Tax free money market mutual funds $ $ $ — $ — Money market mutual funds — — — — Securities owned, at fair value: Corporate stocks-trading securities — — Mutual funds — — Total $ $ $ — $ — Liabilities Securities sold, not yet purchased, at fair value: Corporate stocks-trading securities — — Total $ $ $ — $ — December 31, 2014 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Tax free money market mutual funds $ $ $ — $ — Money market mutual funds — — Securities owned, at fair value: Corporate stocks-trading securities — — Mutual funds — — Total $ $ $ — $ — Liabilities Securities sold, not yet purchased, at fair value: Corporate stocks-trading securities — — Total $ $ $ — $ — Cash and cash equivalents other than bank deposits are measured at fair value and primarily include U.S. government money market mutual funds. Securities owned, at fair value and securities sold, not yet purchased, at fair value include corporate stocks, equity index mutual funds and bond mutual funds, all of which are exchange-traded. Certain of the Company’s assets and liabilities are carried at contracted amounts that approximate fair value. Assets and liabilities that are recorded at contracted amounts approximating fair value consist primarily of receivables from, and payables to, brokers, dealers, clearing organizations and customers. These receivables and payables to brokers, dealers and clearing organizations and customers are short-term in nature, and following September 30, 2015, substantially all have settled at the contracted amounts. The Company believes the carrying amounts of its term-debt obligations at September 30, 2015 and December 31, 2014 approximate fair value because the interest rates on these instruments change with, or approximate, market interest rates.

Restructuring Charges

Restructuring Charges	9 Months Ended
	Sep. 30, 2015
Restructuring Charges
Restructuring Charges	(3) Restructuring Charges 2011 Restructuring In the second and fourth quarters of 2011, the Company implemented restructuring plans to improve margins and enhance stockholder returns. Activity and liability balances recorded as part of the 2011 restructuring plan through September 30, 2015 are as follows (dollars in thousands): Consolidation of leased facilities Balance at December 31, 2014 $ Utilized—cash ) Balance at September 30, 2015 $ The payment of the remaining accrued costs related to the vacated leased facilities will continue through December 2016. 2010 Restructuring In the fourth quarter of 2010, the Company closed its Westchester, NY office and relocated the staff, primarily sales traders and support, to its New York City office. Activity and liability balances recorded as part of the 2010 restructuring plan through September 30, 2015 are as follows (dollars in thousands): Consolidation of leased facilities Balance at December 31, 2014 $ Utilized—cash ) Balance at September 30, 2015 $ The payment of the remaining accrued costs related to the vacated leased facilities will continue through December 2016.

Cash Restricted or Segregated U

Cash Restricted or Segregated Under Regulations and Other	9 Months Ended
	Sep. 30, 2015
Cash Restricted or Segregated Under Regulations and Other
Cash Restricted or Segregated Under Regulations and Other	(4) Cash Restricted or Segregated Under Regulations and Other Cash restricted or segregated under regulations and other represents (i) funds on deposit for the purpose of securing working capital facilities for clearing and settlement activities in Hong Kong, (ii) a special reserve bank account for the exclusive benefit of customers (“Special Reserve Bank Account”) maintained by ITG Inc. in accordance with SEC Rule 15c3-3 (“Customer Protection Rule”) or agreements for proprietary accounts of broker dealers (“PABs”), (iii) funds on deposit for Canadian foreign exchange trade clearing and settlement activity, (iv) segregated balances under a collateral account control agreement for the benefit of certain customers, and (v) funds relating to the securitization of bank guarantees supporting the Company’s Australian lease.

Securities Owned and Sold, Not

Securities Owned and Sold, Not Yet Purchased	9 Months Ended
	Sep. 30, 2015
Securities Owned and Sold, Not Yet Purchased
Securities Owned and Sold, Not Yet Purchased	(5) Securities Owned and Sold, Not Yet Purchased Securities Owned Securities Sold, Not Yet Purchased September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Corporate stocks—trading securities $ $ $ $ Mutual funds — — Total $ $ $ $ Trading securities owned and sold, not yet purchased primarily consists of temporary positions obtained in the normal course of agency trading activities, including positions held in connection with the creation and redemption of exchange-traded funds on behalf of clients.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	(6) Income Taxes A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. During the nine months ended September 30, 2015, the Company benefitted from a net positive reduction in income tax expense of $0.7 million reflecting the resolution in June 2015 of uncertain tax positions in the U.S. for fiscal years 2006 through 2009, which reduced tax reserves by $1.5 million, offset by decreases in deferred tax assets from enacted tax law changes resulting in additional expense of $0.8 million. The Company had reserves for tax positions taken of $12.8 million and $14.4 million at September, 30, 2015 and December 31, 2014, respectively. The Company had accrued interest expense related to tax reserves of $2.7 million and $2.9 million, net of related tax effects, at September 30, 2015 and December 31, 2014, respectively.

Goodwill and Other Intangibles

Goodwill and Other Intangibles	9 Months Ended
	Sep. 30, 2015
Goodwill and Other Intangibles
Goodwill and Other Intangibles	(7) Goodwill and Other Intangibles The following table presents the changes in the carrying amount of goodwill by our European Operations segment for the nine months ended September 30, 2015 (dollars in thousands): Total Balance at December 31, 2014 $ 2015 Activity: Currency translation adjustment ) Balance at September 30, 2015 $ Acquired other intangible assets consisted of the following at September 30, 2015 and December 31, 2014 (dollars in thousands): September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Useful Lives (Years) Trade name $ $ — $ $ — — Customer-related intangibles Proprietary software Trading rights — — — Other — — — Total $ $ $ $ At September 30, 2015, indefinite-lived intangibles not subject to amortization amounted to $8.9 million, of which $8.4 million related to the POSIT trade name. Amortization expense for definite-lived intangibles was $0.8 million and $2.4 million for the three and nine months ended September 30, 2015, respectively, compared with $0.9 million and $3.4 million in the respective prior-year periods. These amounts are included in other general and administrative expense in the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2015, no intangibles were deemed impaired, and accordingly, no adjustment was required.

Receivables and Payables

Receivables and Payables	9 Months Ended
	Sep. 30, 2015
Receivables and Payables
Receivables and Payables	(8) Receivables and Payables Receivables from, and Payables to, Brokers, Dealers and Clearing Organizations The following is a summary of receivables from, and payables to, brokers, dealers and clearing organizations (dollars in thousands): Receivables from Payables to September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Broker-dealers $ $ $ $ Clearing organizations Securities borrowed — — Securities loaned — — Allowance for doubtful accounts ) ) — — Total $ $ $ $ Receivables from, and Payables to, Customers The following is a summary of receivables from, and payables to, customers (dollars in thousands): Receivables from Payables to September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Customers $ $ $ $ Allowance for doubtful accounts ) ) — — Net $ $ $ $ Securities Borrowed and Loaned As of September 30, 2015, securities borrowed as part of the Company’s matched book operations with a fair value of $898.1 million were delivered for securities loaned. The gross amounts of interest earned on cash provided to counterparties as collateral for securities borrowed, and interest incurred on cash received from counterparties as collateral for securities loaned, and the resulting net amount included in other revenue on the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2015 and 2014, respectively, were as follows (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Interest earned $ $ $ $ Interest incurred ) ) ) ) Net $ $ $ $ Deposits paid for securities borrowed and deposits received for securities loaned are recorded at the amount of cash collateral advanced or received. Deposits paid for securities borrowed transactions require the Company to deposit cash with the lender. With respect to deposits received for securities loaned, the Company receives collateral in the form of cash in an amount generally in excess of the market value of the securities loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded, as necessary. The Company’s securities borrowing and lending is generally done under industry standard agreements (“Master Securities Lending Agreements”) that may allow, following an event of default by either party, the prompt close-out of all transactions (including the liquidation of securities held) and the offsetting of obligations to return cash or securities, as the case may be, by the non-defaulting party. Events of default under the Master Securities Lending Agreements generally include, subject to certain conditions: (i) failure to timely deliver cash or securities as required under the transaction, (ii) a party’s insolvency, bankruptcy, or similar proceeding, (iii) breach of representation, and (iv) a material breach of the agreement. The counterparty that receives the securities in these transactions generally has unrestricted access in its use of the securities. For financial statement purposes, the Company does not offset securities borrowed and securities loaned. The following table summarizes the transactions under certain Master Securities Lending Agreements that may be eligible for offsetting if an event of default occurred and a right of offset was legally enforceable (dollars in thousands): Gross Amounts of Recognized Assets/ (Liabilities) Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts Presented in the Consolidated Statement of Financial Condition Collateral Received or Pledged (including Cash) Net Amount As of September 30, 2015: Deposits paid for securities borrowed $ $ — $ $ $ Deposits received for securities loaned ) — ) ) ) As of December 31, 2014: Deposits paid for securities borrowed $ $ — $ $ $ Deposits received for securities loaned ) — ) ) )

Accounts Payable and Accrued Ex

Accounts Payable and Accrued Expenses	9 Months Ended
	Sep. 30, 2015
Accounts Payable and Accrued Expenses
Accounts Payable and Accrued Expenses	(9) Accounts Payable and Accrued Expenses The following is a summary of accounts payable and accrued expenses (dollars in thousands): September 30, 2015 December 31, 2014 Accrued research payables $ $ Accrued compensation and benefits Accrued rent Trade payables Deferred revenue Deferred compensation Accrued transaction processing Accrued restructuring Other Total $ $

Borrowings

Borrowings	9 Months Ended
	Sep. 30, 2015
Borrowings
Borrowings	(10) Borrowings Short-term Bank Loans The Company’s international securities clearance and settlement activities are funded with operating cash or with short-term bank loans in the form of overdraft facilities. At September 30, 2015, there was $65.0 million outstanding under these facilities at a weighted average interest rate of approximately 1.4% associated with international settlement activities. In the U.S., securities clearance and settlement activities are funded with operating cash, securities loaned or with short-term bank loans under a committed credit agreement. On January 31, 2014, ITG Inc. as borrower, and Investment Technology Group, Inc. (“Parent Company”) as guarantor entered into a $150 million two-year revolving credit agreement (the “Credit Agreement”) with a syndicate of banks and JPMorgan Chase Bank, N.A., as Administrative Agent. The Credit Agreement includes an accordion feature that allows for potential expansion of the facility up to $225 million. At September 30, 2015, there were no amounts outstanding under the Credit Agreement. Term Debt Term debt is comprised of the following (dollars in thousands): September 30, 2015 December 31, 2014 Term loan $ — $ Obligations under capital lease Total $ $ On June 1, 2011, Parent Company as borrower, entered into a $25.5 million Master Loan and Security Agreement (“Term Loan Agreement”) with Banc of America Leasing & Capital, LLC (“Bank of America”). The four-year term loan established under this agreement is secured by a security interest in existing furniture, fixtures and equipment owned by the Parent Company and certain U.S. subsidiaries as of June 1, 2011. The primary purpose of this financing was to provide capital for strategic initiatives. The four-year term loan was fully paid by the end of June 30, 2015. Along with the Term Loan Agreement, Parent Company entered into a $5.0 million master lease facility with Bank of America (“Master Lease Agreement”), under which purchases of new equipment were financed. Each equipment lease under the Master Lease Agreement is structured as a capital lease and has a separate 48-month term from its inception date, at the end of which Parent Company may purchase the underlying equipment for $1. At September 30, 2015, there was $0.4 million outstanding under this facility. On August 10, 2012, Parent Company entered into a $25.0 million master lease facility with BMO Harris Equipment Finance Company (“BMO”) to finance equipment and construction expenditures related to the build-out of the Company’s new headquarters in lower Manhattan. The original amount borrowed of $21.2 million has a 3.39% fixed-rate term financing structured as a capital lease with a 48-month term, at the end of which Parent Company may purchase the underlying assets for $1. At September 30, 2015, there was $10.0 million outstanding under this facility.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Earnings Per Share	(11) Earnings Per Share The following is a reconciliation of the basic and diluted earnings per share computations (dollars in thousands, except per share amounts): September 30, 2015 2014 Three Months Ended Net income for basic and diluted earnings per share $ $ Shares of common stock and common stock equivalents: Average common shares used in basic computation Effect of dilutive securities Average common shares used in diluted computation Earnings per share: Basic $ $ Diluted $ $ Nine Months Ended Net income for basic and diluted earnings per share $ $ Shares of common stock and common stock equivalents: Average common shares used in basic computation Effect of dilutive securities Average common shares used in diluted computation Earnings per share: Basic $ $ Diluted $ $ The following is a summary of anti-dilutive equity awards not included in the detailed earnings per share computations (share units in thousands). September 30, 2015 2014 Three months ended Nine months ended

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	9 Months Ended
	Sep. 30, 2015
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income	(12) Accumulated Other Comprehensive Income The components and allocated tax effects of accumulated other comprehensive income for the periods ended September 30, 2015 and December 31, 2014 are as follows (dollars in thousands): Before Tax Effects Tax Effects After Tax Effects September 30, 2015 Currency translation adjustment $ ) $ — $ ) Total $ ) $ — $ ) December 31, 2014 Currency translation adjustment $ ) $ — $ ) Total $ ) $ — $ ) Deferred taxes have not been provided on the cumulative undistributed earnings of foreign subsidiaries or the cumulative translation adjustment related to those investments since there is currently no intent to repatriate funds from certain foreign subsidiaries to the U.S. by way of dividends.

Net Capital Requirement

Net Capital Requirement	9 Months Ended
	Sep. 30, 2015
Net Capital Requirement
Net Capital Requirement	(13) Net Capital Requirement ITG Inc., AlterNet and ITG Derivatives are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. ITG Inc. has elected to use the alternative method permitted by Rule 15c3-1, which requires that ITG Inc. maintain minimum net capital equal to the greater of $1.0 million or 2% of aggregate debit balances arising from customer transactions, as defined. AlterNet and ITG Derivatives have elected to use the basic method permitted by Rule 15c3-1, which requires that they each maintain minimum net capital equal to the greater of 6 2 / 3 % of aggregate indebtedness or $100,000 and $1.0 million, respectively. Dividends or withdrawals of capital cannot be made if capital is needed to comply with regulatory requirements. Net capital balances and the amounts in excess of required net capital at September 30, 2015 for the U.S. Operations are as follows (dollars in thousands): Net Capital Excess U.S. Operations ITG Inc. $ $ AlterNet ITG Derivatives As of September 30, 2015, ITG Inc. and ITG Derivatives had $7.3 million and $0.1 million, respectively, of cash in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements and $1.3 million under PABs. In addition, the Company’s Canadian, European and Asia Pacific Operations have subsidiaries with regulatory capital requirements. The regulatory net capital balances and amount of regulatory capital in excess of the minimum requirements applicable to each business at September 30, 2015, is summarized in the following table (dollars in thousands): Net Capital Excess (Deficit) Canadian Operations Canada $ $ European Operations Ireland U.K. Asia Pacific Operations Australia Hong Kong Singapore As of September 30, 2015, Canadian Operations, European Operations and Asia Pacific Operations had restricted cash with banks of $0.4 million, $0.1 million and $25.9 million, respectively.

Segment Reporting

Segment Reporting	9 Months Ended
	Sep. 30, 2015
Segment Reporting
Segment Reporting	(14) Segment Reporting The Company is organized into four geographic operating segments through which the Company’s chief operating decision maker manages the Company’s business. The U.S., Canadian, European and Asia Pacific Operations segments provide the following categories of products and services: · Electronic Brokerage — includes self-directed trading using algorithms, smart routing and matching through POSIT in cash equities (including single stocks and portfolio lists), futures and options · Research, Sales and Trading — includes (a) differentiated, unbiased, data-driven equity research through the use of innovative data mining and analysis, as well as detailed analysis of energy plays, and (b) portfolio trading and high-touch trading desks providing execution expertise and trading ideas based on investment research · Platforms — includes trade order and execution management software applications in addition to network connectivity · Analytics — includes tools enabling portfolio managers and traders to improve pre-trade and real-time execution performance, portfolio construction and optimization decisions and securities valuation The accounting policies of the reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies, in our Annual Report on Form 10-K for the year ended December 31, 2014 except for the change reported in Note 1, Organization and Basis of Presentation in this Form 10-Q , and described below . The Company allocates resources to, and evaluates the performance of, its reportable segments based on income or loss before income tax expense. Consistent with the Company’s resource allocation and operating performance evaluation approach, the effects of inter-segment activities are eliminated except in limited circumstances where certain technology related costs are allocated to a segment to support that segment’s revenue producing activities. Commissions and fees revenue for trade executions and commission share revenues are principally attributed to each segment based upon the location of execution of the related transaction except that commissions and fees for trade executions by Canadian clients in the U.S. market are attributed to the Canadian Operations instead of the U.S. Operations. Recurring revenues are principally attributed based upon the location of the client using the respective service. Effective in the first quarter of 2015, the Company is presenting its regional segment results excluding corporate activity. For this purpose, corporate activity includes investment income from all treasury activity as well as costs not associated with operating the businesses within the Company’s regional segments. These costs include, among others, (a) the costs of being a public company, such as certain staff costs, a portion of external audit fees, and reporting, filing and listing costs, (b) intangible asset amortization, (c) interest expense, (d) professional fees associated with our global transfer pricing structure, (e) foreign exchange gains or losses and (f) certain non-operating expenses. Prior to this change in segment measure, corporate activity was included in the region where the income/expense was earned/incurred, which primarily was in the U.S. Operations segment. Prior period segment data has been restated to conform to the 2015 presentation. Identifiable assets all relate to an operating segment and are not separately identified as corporate activity. A summary of the segment financial information is as follows (dollars in thousands): U.S. Operations Canadian Operations European Operations Asia Pacific Operations Corporate Consolidated Total Three Months Ended September 30, 2015 Total revenues $ $ $ $ $ $ Income (loss) before income tax expense (benefit) (1) ) ) Identifiable assets — Three Months Ended September 30, 2014 Total revenues $ $ Income (loss) before income tax expense (benefit) ) Identifiable assets — Nine Months Ended September 30, 2015 Total revenues $ $ $ $ $ $ Income (loss) before income tax expense (benefit) (1) ) Nine Months Ended September 30, 2014 Total revenues $ $ $ $ Income (loss) before income tax expense (benefit) ) ) (1) In August 2015, the Company reached a final settlement with the SEC to pay an aggregate amount of $20.3 million. In the third quarter of 2015, the Company incurred $2.6 million in legal and related costs to finalize the settlement order. In the second quarter of 2015, the Company reserved $20.3 million for the settlement and incurred $2.3 million in legal and other related costs associated with this matter. The table below details the total revenues for the categories of products and services provided by the Company (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues by Product Group: Electronic Brokerage $ $ $ $ Research, Sales and Trading Platforms Analytics Corporate Total Revenues $ $ $ $

Dividend Program

Dividend Program	9 Months Ended
	Sep. 30, 2015
Dividend Program
Dividend Program	(15) Dividend Program In April 2015, the Company’s Board of Directors initiated a dividend program under which the Company intends to pay quarterly dividends, subject to quarterly declarations by the Board of Directors. During the second quarter of 2015, the Board of Directors declared, and the Company paid, a quarterly dividend of $0.07 per share totaling $2.4 million. During the third quarter of 2015, the Board of Directors declared and the Company paid its second quarterly dividend of $0.07 per share totaling $2.6 million.

Off-Balance Sheet Risk and Conc

Off-Balance Sheet Risk and Concentration of Credit Risk	9 Months Ended
	Sep. 30, 2015
Off-Balance Sheet Risk and Concentration of Credit Risk
Off-Balance Sheet Risk and Concentration of Credit Risk	(16) Off-Balance Sheet Risk and Concentration of Credit Risk The Company is a member of various U.S. and non-U.S. exchanges and clearing houses that trade and clear, respectively, equities and/or derivative contracts. Associated with the Company’s membership, the Company may be required to pay a proportionate share of financial obligations of another member who may default on its obligations to the exchanges or the clearing house. While the rules governing different exchange or clearing house memberships vary, in general, the Company’s obligations would arise only if the exchanges and clearing houses had previously exhausted other remedies. The maximum potential payout under these memberships cannot be estimated. The Company has not recorded any contingent liability in the condensed consolidated financial statements for these agreements and believes that any potential requirement to make payments under these agreements is remote. In the ordinary course of business, the Company guarantees obligations of subsidiaries which may arise from third-party clearing relationships and trading counterparties. The activities of the subsidiaries covered by these guarantees are included in the Company’s condensed consolidated financial statements. The Company’s customer financing and securities settlement activities may require the Company to pledge customer securities as collateral in support of various secured financing transactions such as bank loans. In the event the counterparty is unable to meet its contractual obligation to return customer securities pledged as collateral, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its customer obligations. The Company controls this risk by monitoring the market value of securities pledged on a daily basis and by requiring adjustments of collateral levels in the event of excess market exposure. Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, securities owned at fair value, receivables from brokers, dealers and clearing organizations and receivables from customers. Cash and cash equivalents and securities owned, at fair value are deposited with high credit quality financial institutions. The Company loans securities temporarily to other brokers in connection with its securities lending activities. The Company receives cash as collateral for the securities loaned. Increases in security prices may cause the market value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its obligations. The Company controls this risk by requiring credit approvals for counterparties, by monitoring the market value of securities loaned on a daily basis, and by requiring additional cash as collateral or returning collateral when necessary. The Company borrows securities temporarily from other brokers in connection with its securities borrowing activities. The Company deposits cash as collateral for the securities borrowed. Decreases in security prices may cause the market value of the securities borrowed to fall below the amount of cash deposited as collateral. In the event the counterparty to these transactions does not return collateral, the Company may be exposed to the risk of selling the securities at prevailing market prices. The Company controls this risk by requiring credit approvals for counterparties, by monitoring the collateral values on a daily basis, and by depositing additional collateral with counterparties or receiving cash when deemed necessary. The Company may at times maintain inventories in equity securities on both a long and short basis. Whereas long inventory positions represent the Company’s ownership of securities, short inventory positions represent obligations of the Company to deliver specified securities at a contracted price, which may differ from market prices prevailing at the time of completion of the transaction. Accordingly, both long and short inventory positions may result in losses or gains to the Company as market values of securities fluctuate. To mitigate the risk of losses, long and short positions are marked to market daily and are continuously monitored by the Company.

Contingencies - Legal Matters

Contingencies - Legal Matters	9 Months Ended
	Sep. 30, 2015
Contingencies - Legal Matters
Contingencies - Legal Matters	(17) Contingencies — Legal Matters The Company is not a party to any pending legal proceedings other than claims and lawsuits arising in the ordinary course of business, except (1) putative class action lawsuits have been filed with respect to the Company and certain of its current and former executives in connection with the Company’s announcement of the SEC matter described in the following paragraph (and other related actions could be filed) and (2) the Company’s former President and Chief Executive Officer served a Demand for Arbitration upon the Company in connection with the August 2015 termination of his employment. As previously disclosed, the Company’s broker-dealer subsidiaries are involved in ongoing investigations and other proceedings by government agencies and self-regulatory organizations regarding their businesses. Such claims, lawsuits, investigations and other proceedings may result in judgments, settlements, fines, penalties, injunctions or other relief. On August 12, 2015, the Company reached a final settlement with the staff of the Division of Enforcement of the SEC in connection with the SEC’s investigation into a proprietary trading pilot operated within AlterNet for sixteen months in 2010 through mid-2011. The investigation was focused on customer disclosures, Form ATS regulatory filings and customer information controls relating to the pilot’s trading activity, which included (a) crossing against sell-side clients in POSIT and (b) violations of Company policy and procedures by a former employee. These violations principally involved information breaches for a period of several months in 2010 regarding sell-side parent orders flowing into ITG’s algorithms and executions by all customers in non-POSIT markets that were not otherwise available to ITG clients. According to the terms of the settlement, the Company paid an aggregate amount of $20.3 million, representing a civil penalty of $18 million, disgorgement of approximately $2.1 million in trading revenues and prejudgment interest of approximately $250,000. The $20.3 million settlement amount was reserved in the second quarter of 2015. During the three and nine months ended September 30, 2015, the Company incurred legal and other costs related to this matter of $2.6 million, and $4.9 million, respectively. In connection with the announcement of the SEC investigation, two putative class action lawsuits were filed with respect to the Company and certain of its current and former executives. One lawsuit, captioned Shah v. Investment Technology Group, Inc. et al. , was filed on August 5, 2015, in the United States District Court for the Central District of California (the “CDCA”), while the other, Bernacchi v. Investment Technology Group, Inc. et al. , was filed on August 12, 2015, in the United States District Court for the Southern District of New York (the “SDNY”). The complaints allege, among other things, that the defendants made material misrepresentations or omitted to disclose material facts concerning, among other subjects, the matters that were the subject of the SEC settlement regarding AlterNet, and the SEC investigation that led to the SEC settlement . The complaints seek an unspecified amount of damages under the federal securities laws. In October 2015, the Shah action was transferred to the SDNY, where it is anticipated it will be consolidated with the Bernacchi action. The Company cannot predict the outcome of these actions, but intends to defend them vigorously. In October 2015, the Company’s former President and Chief Executive Officer (the “Former CEO”) filed a Demand for Arbitration before the American Arbitration Association against the Company. The Former CEO’s statement of claim alleges that the Company breached his employment agreement with the Company by terminating his employment for “cause”, and further alleges that the Company defamed him. The statement of claim seeks an award of damages and equity valued in the arbitration demand at $8.0 million, plus an additional $5.0 million in actual and punitive damages with respect to the defamation claim. The Company cannot predict the outcome of the arbitration, but intends to defend it vigorously. The Company is unable to provide a reasonable estimate of any potential liability for ongoing investigations, lawsuits or other proceedings given the stage of such proceedings. The Company believes, based on information currently available, that the outcome of ongoing investigations, lawsuits or other proceedings, individually or in the aggregate, will not likely have a material adverse effect on its consolidated financial position. In light of the inherent uncertainties of such proceedings, an adverse outcome of one or more of such proceedings may have a material impact on the results of operations for any particular period.

Subsequent Event

Subsequent Event	9 Months Ended
	Sep. 30, 2015
Subsequent Event.
Subsequent Event	(18) Subsequent Event In November 2015, the Company entered into a definitive agreement to sell the Calgary-based energy unit of ITG Investment Research to Warburg Pincus for a purchase price of approximately $120.5 million in cash. Subject to customary conditions and approvals, the transaction is expected to close by the end of 2015. The Company will continue to provide energy research to its institutional clients, serving as the exclusive sales partner for institutional investors. The Company expects to recognize a gain of between $90 million and $95 million after taxes from this transaction. The transaction is expected to increase the Company’s tangible book value by between $2.85 and $3.00 per share.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Fair value measurements for assets and liabilities measured on a recurring basis	Fair value measurements for those items measured on a recurring basis are as follows (dollars in thousands): September 30, 2015 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Tax free money market mutual funds $ $ $ — $ — Money market mutual funds — — — — Securities owned, at fair value: Corporate stocks-trading securities — — Mutual funds — — Total $ $ $ — $ — Liabilities Securities sold, not yet purchased, at fair value: Corporate stocks-trading securities — — Total $ $ $ — $ — December 31, 2014 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Tax free money market mutual funds $ $ $ — $ — Money market mutual funds — — Securities owned, at fair value: Corporate stocks-trading securities — — Mutual funds — — Total $ $ $ — $ — Liabilities Securities sold, not yet purchased, at fair value: Corporate stocks-trading securities — — Total $ $ $ — $ —

Restructuring Charges (Tables)

Restructuring Charges (Tables)	9 Months Ended
	Sep. 30, 2015
Restructuring Plan 2011
Restructuring Charges.
Summary of changes in the liability related to the restructuring plan included in accounts payable and accrued expenses	Activity and liability balances recorded as part of the 2011 restructuring plan through September 30, 2015 are as follows (dollars in thousands): Consolidation of leased facilities Balance at December 31, 2014 $ Utilized—cash ) Balance at September 30, 2015 $
Restructuring Plan 2010
Restructuring Charges.
Summary of changes in the liability related to the restructuring plan included in accounts payable and accrued expenses	Activity and liability balances recorded as part of the 2010 restructuring plan through September 30, 2015 are as follows (dollars in thousands): Consolidation of leased facilities Balance at December 31, 2014 $ Utilized—cash ) Balance at September 30, 2015 $

Securities Owned and Sold, No29

Securities Owned and Sold, Not Yet Purchased (Tables)	9 Months Ended
	Sep. 30, 2015
Securities Owned and Sold, Not Yet Purchased
Summary of securities owned and securities sold, not yet purchased	Securities Owned Securities Sold, Not Yet Purchased September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Corporate stocks—trading securities $ $ $ $ Mutual funds — — Total $ $ $ $

Goodwill and Other Intangibles

Goodwill and Other Intangibles (Table)	9 Months Ended
	Sep. 30, 2015
Goodwill and Other Intangibles
Changes in the carrying amount of goodwill by reportable segment	The following table presents the changes in the carrying amount of goodwill by our European Operations segment for the nine months ended September 30, 2015 (dollars in thousands): Total Balance at December 31, 2014 $ 2015 Activity: Currency translation adjustment ) Balance at September 30, 2015 $
Summary of acquired other intangible assets	Acquired other intangible assets consisted of the following at September 30, 2015 and December 31, 2014 (dollars in thousands): September 30, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Useful Lives (Years) Trade name $ $ — $ $ — — Customer-related intangibles Proprietary software Trading rights — — — Other — — — Total $ $ $ $

Receivables and Payables (Table

Receivables and Payables (Tables)	9 Months Ended
	Sep. 30, 2015
Receivables and Payables
Summary of receivables from and payables to brokers, dealers and clearing organizations	The following is a summary of receivables from, and payables to, brokers, dealers and clearing organizations (dollars in thousands): Receivables from Payables to September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Broker-dealers $ $ $ $ Clearing organizations Securities borrowed — — Securities loaned — — Allowance for doubtful accounts ) ) — — Total $ $ $ $
Summary of receivables from and payables to customers	The following is a summary of receivables from, and payables to, customers (dollars in thousands): Receivables from Payables to September 30, 2015 December 31, 2014 September 30, 2015 December 31, 2014 Customers $ $ $ $ Allowance for doubtful accounts ) ) — — Net $ $ $ $
Schedule of interest earned and interest incurred on securities borrowed and loaned	The gross amounts of interest earned on cash provided to counterparties as collateral for securities borrowed, and interest incurred on cash received from counterparties as collateral for securities loaned, and the resulting net amount included in other revenue on the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2015 and 2014, respectively, were as follows (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Interest earned $ $ $ $ Interest incurred ) ) ) ) Net $ $ $ $
Summary of the transactions under certain Master Securities Lending Agreements that may be eligible for offsetting if an event of default occurred and a right of offset was legally enforceable	The following table summarizes the transactions under certain Master Securities Lending Agreements that may be eligible for offsetting if an event of default occurred and a right of offset was legally enforceable (dollars in thousands): Gross Amounts of Recognized Assets/ (Liabilities) Gross Amounts Offset in the Consolidated Statement of Financial Condition Net Amounts Presented in the Consolidated Statement of Financial Condition Collateral Received or Pledged (including Cash) Net Amount As of September 30, 2015: Deposits paid for securities borrowed $ $ — $ $ $ Deposits received for securities loaned ) — ) ) ) As of December 31, 2014: Deposits paid for securities borrowed $ $ — $ $ $ Deposits received for securities loaned ) — ) ) )

Accounts Payable and Accrued 32

Accounts Payable and Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2015
Accounts Payable and Accrued Expenses
Summary of accounts payable and accrued expenses	The following is a summary of accounts payable and accrued expenses (dollars in thousands): September 30, 2015 December 31, 2014 Accrued research payables $ $ Accrued compensation and benefits Accrued rent Trade payables Deferred revenue Deferred compensation Accrued transaction processing Accrued restructuring Other Total $ $

Borrowings (Tables)

Borrowings (Tables)	9 Months Ended
	Sep. 30, 2015
Borrowings
Summary of term debt	Term debt is comprised of the following (dollars in thousands): September 30, 2015 December 31, 2014 Term loan $ — $ Obligations under capital lease Total $ $

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings Per Share
Reconciliation of the basic and diluted earnings per share computations	The following is a reconciliation of the basic and diluted earnings per share computations (dollars in thousands, except per share amounts): September 30, 2015 2014 Three Months Ended Net income for basic and diluted earnings per share $ $ Shares of common stock and common stock equivalents: Average common shares used in basic computation Effect of dilutive securities Average common shares used in diluted computation Earnings per share: Basic $ $ Diluted $ $ Nine Months Ended Net income for basic and diluted earnings per share $ $ Shares of common stock and common stock equivalents: Average common shares used in basic computation Effect of dilutive securities Average common shares used in diluted computation Earnings per share: Basic $ $ Diluted $ $
Summary of anti-dilutive equity awards not included in the detailed earnings per share computations	The following is a summary of anti-dilutive equity awards not included in the detailed earnings per share computations (share units in thousands). September 30, 2015 2014 Three months ended Nine months ended

Accumulated Other Comprehensi35

Accumulated Other Comprehensive Income (Tables)	9 Months Ended
	Sep. 30, 2015
Accumulated Other Comprehensive Income
Schedule of components and allocated tax effects of accumulated other comprehensive income	The components and allocated tax effects of accumulated other comprehensive income for the periods ended September 30, 2015 and December 31, 2014 are as follows (dollars in thousands): Before Tax Effects Tax Effects After Tax Effects September 30, 2015 Currency translation adjustment $ ) $ — $ ) Total $ ) $ — $ ) December 31, 2014 Currency translation adjustment $ ) $ — $ ) Total $ ) $ — $ )

Net Capital Requirement (Tables

Net Capital Requirement (Tables)	9 Months Ended
	Sep. 30, 2015
Net Capital Requirement
Net capital balances and the amounts in excess of required net capital for the U.S. Operations	Net capital balances and the amounts in excess of required net capital at September 30, 2015 for the U.S. Operations are as follows (dollars in thousands): Net Capital Excess U.S. Operations ITG Inc. $ $ AlterNet ITG Derivatives
Net capital balances and the amounts in excess of required net capital for other than U.S. Operations	The regulatory net capital balances and amount of regulatory capital in excess of the minimum requirements applicable to each business at September 30, 2015, is summarized in the following table (dollars in thousands): Net Capital Excess (Deficit) Canadian Operations Canada $ $ European Operations Ireland U.K. Asia Pacific Operations Australia Hong Kong Singapore

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2015
Segment Reporting
Summary of the segment financial information	A summary of the segment financial information is as follows (dollars in thousands): U.S. Operations Canadian Operations European Operations Asia Pacific Operations Corporate Consolidated Total Three Months Ended September 30, 2015 Total revenues $ $ $ $ $ $ Income (loss) before income tax expense (benefit) (1) ) ) Identifiable assets — Three Months Ended September 30, 2014 Total revenues $ $ Income (loss) before income tax expense (benefit) ) Identifiable assets — Nine Months Ended September 30, 2015 Total revenues $ $ $ $ $ $ Income (loss) before income tax expense (benefit) (1) ) Nine Months Ended September 30, 2014 Total revenues $ $ $ $ Income (loss) before income tax expense (benefit) ) ) (1) In August 2015, the Company reached a final settlement with the SEC to pay an aggregate amount of $20.3 million. In the third quarter of 2015, the Company incurred $2.6 million in legal and related costs to finalize the settlement order. In the second quarter of 2015, the Company reserved $20.3 million for the settlement and incurred $2.3 million in legal and other related costs associated with this matter.
Schedule of total revenues for the products and services provided by our geographic segments	The table below details the total revenues for the categories of products and services provided by the Company (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenues by Product Group: Electronic Brokerage $ $ $ $ Research, Sales and Trading Platforms Analytics Corporate Total Revenues $ $ $ $

Organization and Basis of Pre38

Organization and Basis of Presentation (Details)	9 Months Ended
	Sep. 30, 2015segment
Organization and Basis of Presentation
Number of reportable operating segments	4

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Securities owned, at fair value:	$ 7,941	$ 12,073
Liabilities
Securities sold, not yet purchased, at fair value:	4,851	8,253
Recurring basis
Assets
Total Assets	7,974	19,071
Liabilities
Total Liabilities	4,851	8,253
Recurring basis | Tax free money market mutual funds
Assets
Cash and cash equivalents:	33	33
Recurring basis | Money market mutual funds
Assets
Cash and cash equivalents:		6,965
Recurring basis | Corporate stocks-trading securities
Assets
Securities owned, at fair value:	4,791	8,160
Liabilities
Securities sold, not yet purchased, at fair value:	4,851	8,253
Recurring basis | Mutual funds
Assets
Securities owned, at fair value:	3,150	3,913
Recurring basis | Level 1
Assets
Total Assets	7,974	19,071
Liabilities
Total Liabilities	4,851	8,253
Recurring basis | Level 1 | Tax free money market mutual funds
Assets
Cash and cash equivalents:	33	33
Recurring basis | Level 1 | Money market mutual funds
Assets
Cash and cash equivalents:		6,965
Recurring basis | Level 1 | Corporate stocks-trading securities
Assets
Securities owned, at fair value:	4,791	8,160
Liabilities
Securities sold, not yet purchased, at fair value:	4,851	8,253
Recurring basis | Level 1 | Mutual funds
Assets
Securities owned, at fair value:	$ 3,150	$ 3,913

Restructuring Charges (Details)

Restructuring Charges (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Restructuring Charges
Balance at the beginning of the period	$ 2,224
Balance at the end of the period	1,467
Restructuring Plan 2011 | Consolidation of leased facilities
Restructuring Charges
Balance at the beginning of the period	833
Utilized - cash	(448)
Balance at the end of the period	385
Restructuring Plan 2010 | Consolidation of leased facilities
Restructuring Charges
Balance at the beginning of the period	1,391
Utilized - cash	(309)
Balance at the end of the period	$ 1,082

Securities Owned and Sold, No41

Securities Owned and Sold, Not Yet Purchased (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Securities owned and sold, not yet purchased
Securities owned, at fair value	$ 7,941	$ 12,073
Securities sold, not yet purchased, at fair value	4,851	8,253
Corporate stocks-trading securities
Securities owned and sold, not yet purchased
Securities owned, at fair value	4,791	8,160
Securities sold, not yet purchased, at fair value	4,851	8,253
Mutual funds
Securities owned and sold, not yet purchased
Securities owned, at fair value	$ 3,150	$ 3,913

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Income Taxes
Unrecognized tax benefit from net positive reduction in income tax expense	$ 0.7
Decrease in income tax reserve due to resolution of uncertain tax positions	1.5
Additional tax expense	0.8
Unrecognized tax benefits	12.8	$ 14.4
Accrued interest expense related to unrecognized tax benefits, gross of tax	$ 2.7	$ 2.9

Goodwill and Other Intangible43

Goodwill and Other Intangibles (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Goodwill
Balance at the beginning of the period	$ 12,803
Balance at the end of the period	12,349
European Operations
Goodwill
Balance at the beginning of the period	12,803
Currency translation adjustment	(454)
Balance at the end of the period	$ 12,349

Goodwill and Other Intangible44

Goodwill and Other Intangibles (Detail 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Other Intangible Assets
Gross Carrying Amount	$ 62,764		$ 62,764		$ 62,764
Accumulated Amortization	33,584		33,584		31,169
Other intangible assets not subject to amortization	8,900		8,900
Amortization expense of other intangible assets	800	$ 900	2,400	$ 3,400
Impairment of other intangible assets			0
Trade name
Other Intangible Assets
Gross Carrying Amount	8,545		8,545		8,545
Trading rights
Other Intangible Assets
Gross Carrying Amount	339		339		339
Other
Other Intangible Assets
Gross Carrying Amount	50		50		50
POSIT trade name
Other Intangible Assets
Other intangible assets not subject to amortization	8,400		8,400
Customer related intangibles
Other Intangible Assets
Gross Carrying Amount	30,272		30,272		30,272
Accumulated Amortization	12,992		$ 12,992		11,210
Useful Lives			13 years 3 months 18 days
Proprietary software
Other Intangible Assets
Gross Carrying Amount	23,558		$ 23,558		23,558
Accumulated Amortization	$ 20,592		$ 20,592		$ 19,959
Useful Lives			6 years 3 months 18 days

Receivables and Payables (Detai

Receivables and Payables (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Receivables from brokers, dealers and clearing organizations
Broker-dealers	$ 190,689		$ 190,689		$ 147,240
Clearing organizations	22,876		22,876		1,447
Securities borrowed	918,567		918,567		496,596
Allowance for doubtful accounts	(945)		(945)		(669)
Total	1,131,187		1,131,187		644,614
Payables to brokers, dealers and clearing organizations
Broker-dealers	71,710		71,710		51,615
Clearing organizations	14,587		14,587		39,433
Securities loaned	923,570		923,570		508,993
Total	1,009,867		1,009,867		600,041
Receivables from customers
Customers	64,687		64,687		108,518
Allowance for doubtful accounts	(592)		(592)		(583)
Total	64,095		64,095		107,935
Payables to customers
Customers	50,279		50,279		11,132
Total	50,279		50,279		11,132
Securities Borrowed and Loaned
Fair value of securities borrowed	898,100		898,100
Interest earned	1,478	$ 2,763	4,337	$ 13,621
Interest incurred	(884)	(1,799)	(3,009)	(9,203)
Interest earned (incurred), net	594	$ 964	1,328	$ 4,418
Deposits paid for securities borrowed
Gross Amounts of Recognized Assets	918,567		918,567		496,596
Net Amounts Presented in the Consolidated Statement of Financial Condition	918,567		918,567		496,596
Collateral Received or Pledged (including Cash)	917,400		917,400		496,374
Net Amount	1,167		1,167		222
Deposits received for securities loaned
Gross Amounts of Recognized Liabilities	(923,570)		(923,570)		(508,993)
Net Amounts Presented in the Consolidated Statement of Financial Condition	(923,570)		(923,570)		(508,993)
Collateral Received or Pledged (including Cash)	(914,554)		(914,554)		(497,462)
Net Amount	$ (9,016)		$ (9,016)		$ (11,531)

Accounts Payable and Accrued 46

Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts Payable and Accrued Expenses
Accrued research payables	$ 43,625	$ 56,736
Accrued compensation and benefits	40,530	62,271
Accrued rent	18,092	19,169
Trade payables	14,726	19,547
Deferred revenue	14,813	13,836
Deferred compensation	3,151	3,918
Accrued transaction processing	2,319	2,981
Accrued restructuring	1,467	2,224
Other	22,529	18,529
Total	$ 161,252	$ 199,211

Borrowings (Details)

Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Borrowings
Outstanding short-term bank loans to support clearance and settlement activities	$ 65,013	$ 78,360
Weighted average interest rate on outstanding short-term bank loans to support clearance and settlement activities (as a percent)	1.40%

Borrowings (Details 2)

Borrowings (Details 2) - USD ($) $ in Thousands	Jan. 31, 2014	Sep. 30, 2015	Dec. 31, 2014
Credit Agreement
Term loan			$ 2,653
Obligations under capital lease		$ 10,414	15,128
Total		10,414	$ 17,781
New Credit Agreement
Credit Agreement
Current borrowing capacity	$ 150,000
Credit facility initial term	2 years
Maximum borrowing capacity including accordion expansion	$ 225,000
Amount outstanding under Credit Agreement		$ 0

Borrowings (Details 3)

Borrowings (Details 3) - USD ($)	Aug. 10, 2012	Jun. 01, 2011	Jun. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Master Lease Agreement
Obligations under capital lease				$ 10,414,000	$ 15,128,000
Master Loan and Security Agreement (Term Loan Agreement)
Term Loan
Term debt		$ 25,500,000
Term of Term Loan Agreement		4 years	4 years
Bank of America | Master Lease Agreement
Master Lease Agreement
Master lease facility, amount		$ 5,000,000
Term of capital lease		48 months
Ending purchase price of underlying assets		$ 1
Outstanding amount of facility				400,000
BMO Harris Equipment Finance Company | Master Lease Agreement
Master Lease Agreement
Master lease facility, amount	$ 25,000,000
Obligations under capital lease	$ 21,200,000
Interest, fixed rate (as a percent)	3.39%
Term of capital lease	48 months
Ending purchase price of underlying assets	$ 1
Outstanding amount of facility				$ 10,000,000

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share
Net income for basic and diluted earnings per share	$ 2,710	$ 11,365	$ 9,233	$ 37,911
Shares of common stock and common stock equivalents:
Average common shares used in basic computation	33,859	35,093	34,066	35,628
Effect of dilutive securities (in shares)	688	933	910	971
Average common shares used in diluted computation	34,547	36,026	34,976	36,599
Earnings per share:
Basic (in dollars per share)	$ 0.08	$ 0.32	$ 0.27	$ 1.06
Diluted (in dollars per share)	$ 0.08	$ 0.32	$ 0.26	$ 1.04
Anti-dilutive equity awards not included in the detailed earnings per share computation
Equity awards not included in the diluted earnings per share computation	549	471	203	421

Accumulated Other Comprehensi51

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income
Before Tax Effects	$ (18,327)	$ (5,894)
After Tax Effects	(18,327)	(5,894)
Currency translation adjustment
Accumulated Other Comprehensive Income
Before Tax Effects	(18,327)	(5,894)
After Tax Effects	$ (18,327)	$ (5,894)

Net Capital Requirement (Detail

Net Capital Requirement (Details)	Sep. 30, 2015USD ($)
Canadian Operations
Net Capital Requirement
Net Capital	$ 30,011,000
Excess Net Capital	29,639,000
Cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule	400,000
European Operations
Net Capital Requirement
Cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule	100,000
Ireland
Net Capital Requirement
Net Capital	65,522,000
Excess Net Capital	9,984,000
U.K.
Net Capital Requirement
Net Capital	3,383,000
Excess Net Capital	2,566,000
Asia Pacific Operations
Net Capital Requirement
Cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule	25,900,000
Australia
Net Capital Requirement
Net Capital	10,575,000
Excess Net Capital	6,205,000
Hong Kong
Net Capital Requirement
Net Capital	30,809,000
Excess Net Capital	19,445,000
Singapore
Net Capital Requirement
Net Capital	559,000
Excess Net Capital	383,000
ITG Inc.
Net Capital Requirement
Minimum net capital under the alternative method	$ 1,000,000
Net capital percentage of debit balances arising from customer transactions	2.00%
Cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule	$ 7,300,000
Cash balance under Proprietary Accounts for Introducing Brokers agreements	1,300,000
ITG Inc. | U.S. Operations
Net Capital Requirement
Net Capital	69,071,000
Excess Net Capital	$ 68,071,000
Alter Net
Net Capital Requirement
Net capital percentage of aggregate indebtedness	6.66%
Minimum net capital under the basic method	$ 100,000
Alter Net | U.S. Operations
Net Capital Requirement
Net Capital	4,438,000
Excess Net Capital	$ 4,280,000
ITG Derivatives
Net Capital Requirement
Net capital percentage of aggregate indebtedness	6.66%
Minimum net capital under the basic method	$ 1,000,000
Cash balance in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule	100,000
ITG Derivatives | U.S. Operations
Net Capital Requirement
Net Capital	1,835,000
Excess Net Capital	$ 835,000

Segment Reporting (Details)

Segment Reporting (Details)	1 Months Ended	3 Months Ended			9 Months Ended
	Aug. 31, 2015USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)segment	Sep. 30, 2014USD ($)	Dec. 31, 2014USD ($)
Segment Reporting
Number of operating segments | segment					4
Segment reporting
Total revenues		$ 120,409,000		$ 134,773,000	$ 410,630,000	$ 410,848,000
Income (loss) before income tax expense (benefit) (1)		3,190,000		12,078,000	16,581,000	47,186,000
Identifiable assets		1,693,817,000		1,505,241,000	1,693,817,000	1,505,241,000	$ 1,350,849,000
Reserve for probable settlement with SEC	$ 20,300,000		$ 20,300,000
Civil penalty	18,000,000
Disgorgement of trading revenues	2,100,000
Prejudgment interest	$ 256,000
Legal and related costs		2,600,000	$ 2,300,000		4,900,000
U.S. Operations
Segment reporting
Total revenues		66,039,000		72,315,000	221,967,000	225,188,000
Income (loss) before income tax expense (benefit) (1)		752,000		6,164,000	17,543,000	26,281,000
Identifiable assets		1,263,395,000		978,246,000	1,263,395,000	978,246,000
Canadian Operations
Segment reporting
Total revenues		14,899,000		17,830,000	50,516,000	54,842,000
Income (loss) before income tax expense (benefit) (1)		3,595,000		3,244,000	10,964,000	11,814,000
Identifiable assets		99,413,000		110,224,000	99,413,000	110,224,000
European Operations
Segment reporting
Total revenues		28,899,000		31,635,000	99,079,000	95,489,000
Income (loss) before income tax expense (benefit) (1)		4,830,000		7,843,000	23,723,000	27,456,000
Identifiable assets		267,863,000		346,326,000	267,863,000	346,326,000
Asia Pacific Operations
Segment reporting
Total revenues		10,351,000		12,535,000	38,385,000	34,295,000
Income (loss) before income tax expense (benefit) (1)		(411,000)		280,000	2,298,000	(1,852,000)
Identifiable assets		63,146,000		70,445,000	63,146,000	70,445,000
Corporate
Segment reporting
Total revenues		221,000		458,000	683,000	1,034,000
Income (loss) before income tax expense (benefit) (1)		$ (5,576,000)		$ (5,453,000)	$ (37,947,000)	$ (16,513,000)

Segment Reporting (Details 2)

Segment Reporting (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues
Total revenues	$ 120,409	$ 134,773	$ 410,630	$ 410,848
Corporate
Revenues
Total revenues	221	458	683	1,033
Electronic Brokerage
Revenues
Total revenues	59,418	68,663	214,920	214,740
Research Sales and Trading
Revenues
Total revenues	26,316	30,470	89,208	90,026
Platforms
Revenues
Total revenues	22,837	23,570	71,460	70,636
Analytics
Revenues
Total revenues	$ 11,617	$ 11,612	$ 34,359	$ 34,413

Dividend Program (Details)

Dividend Program (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2015
Dividend Program
Dividend declared (in dollars per share)	$ 0.07	$ 0.07
Dividend paid (in dollars per share)	$ 0.07	$ 0.07
Dividends	$ 2,600	$ 2,400	$ 4,892

Contingencies - Legal Matters (

Contingencies - Legal Matters (Details)	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 31, 2015USD ($)	Aug. 31, 2015USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)	Sep. 30, 2015USD ($)item
Contingencies - Legal Matters
Number of putative class action lawsuits | item					2
Aggregate amount payable		$ 20,300,000
Civil penalty		18,000,000
Disgorgement of trading revenues		2,100,000
Prejudgment interest		256,000
Reserve for probable settlement with SEC		$ 20,300,000		$ 20,300,000
Legal and related costs			$ 2,600,000	$ 2,300,000	$ 4,900,000
Subsequent event | Seeking in cash and equity severance
Contingencies - Legal Matters
Loss contingency damages sought value	$ 8,000,000
Subsequent event | Punitive damages
Contingencies - Legal Matters
Loss contingency damages sought value	$ 5,000,000

Subsequent Event (Detail)

Subsequent Event (Detail) - Subsequent event - ITG Investment Research $ in Millions	1 Months Ended
	Nov. 30, 2015USD ($)shares
Subsequent event
Cash price	$ 120.5
Minimum
Subsequent event
Gain on sale, net of tax	$ 90
Increase in tangible book value per share | shares	2.85
Maximum
Subsequent event
Gain on sale, net of tax	$ 95
Increase in tangible book value per share | shares	3