Oath or Affirmation 13313313313313313313313313313313313313313313313313 - PDF document

1 Page Oath or Affirmation ……

Page Oath or Affirmation …………………………………………………………. Independent Auditor’s Report……………………………………………… Statement of Financial Condition…………………………………………. Notes to the Financial Statements………………………………………… Supplementary Information: Reconciliation of Statement of Financial Condition to Minimum Net Capital Requirements……………………………………………………………… Statement of the Computation of Net Capital and Minimum Capital Requirements Statement of Segregation Requirements and Funds in Segregation… Statement of Segregation Requirement and Funds in Segregation for CustomersDealer Options…………………………………………………………….

2 Statement of Se
Statement of Secured Requirement and Funds Held in Separate Accounts Statement of Cleared Swaps SegregationRequirements and Funds in Cleared Swaps Customer Accounts……………………………………………… BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Statement of Financial ConditionDecember 31, 2019 4 A SSETS Cash and cash equivalents $ 387,293 Cash segregated under federal and other regulations 4,613,886 Deposit s with exchange clearing organization 9,747,318 Receivables from an exchange clearing organization Leased ssets 533,928 1,066,624 Total assets 349 LIABILITIES AND MEMBER’S EQUITY Liabilities: Due to related parties $ 132,828 Payables to: C ustomer s 8,897,641 Long t erm l ease l iability 1,066,624 Other payables and accrued expenses 47 , 57 3 Total l iabilities 10 , 1 44 , 66 6 Liabilities subordinated to claims of general creditors 4 , 0 00,000 Member's e quity 2 , 20 4 , 383 Total liabilities and member’s equity $ 16 , 349 , 04 9 The accompanying notes are an integral part of these financial statements BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��5 &#x/MCI

3 ; 0 ;&#x/MCI; 0 ; &#x/MCI; 1
; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ; &#x/MCI; 3 ;&#x/MCI; 3 ;1 OrganizationBOCI Commodities & Futures (USA) LLC (the “Company”) is a limited liability company formed in the tate of Delaware on September 12, 2011. The Company is a wholly owned subsidiary ofBOC International (USA) Holdings Inc. (the “Parent”), a Delaware corporationThe Company’s principal business activity is clearing of exchange traded futures and optionscontracts for institutional clients. The Company is a registered utures ommission erchant (“FCM”) with the Commodity Futures Trading Commission, a member of the National utures ssociation,and isa clearing member of allCME Group Inc. (“CME”) exchanges. Summary of significant accounting policiesThe principal accounting policies applied in the preparation of these financial statements are set out below. Basis of preparationThe financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The financial statements are presented in US dollars, unless otherwise stated.Use of estimatesThe preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates.Commodities ransactions Transactions in exchange traded futures and options are recorded on the trade date at the original price. Commodities futures and options held by the Company on behalf of customers are carried at fair value, and u

4 nrealized profits and losses are reflect
nrealized profits and losses are reflected in the client’s equity. Cash and cash equivalentsCash includefunds with JPMorgan Chase Bank, N.A. and Bank of China New York Branch. For the purposes of the statement of cash flows, highly liquid investments with original maturities of three months or less are considered cash equivalents. BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��6 &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ;2 Summary of significant accounting policies (continued)Income taxThe Company complies with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes(“ASC 740”)which require an asset nd liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statements and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized.ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 also requires the evaluation of tax positions taken or expec

5 tedto be taken in the course of preparin
tedto be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "morelikelythannot" to be sustained by the applicable tax authority. Tax positions not deemed to meet the morelikelythannot threshold would brecorded as a tax benefit or expense in the current year. The tax years that remain subject to amination are 6, , 201and 201. The Company determined that there are no uncertain tax positions, which would require adjustments or disclosures onthe financial statements.The Company is included in the consolidated tax return of the Parent. he provision for income taxes is computed using a “separate return” method.Under this method, the Company is assumed to file a separate return with the taxauthority, thereby reporting taxable income or loss and applying the applicable tax to or receiving the appropriate refund from the Parent.The current provision is the amount of tax payable or refundable on the basis of a hypothetical, current year separate tax return.Deferred taxes are provided on temporary differences and on any carry forwards that could be claimed on the hypothetical return and the need for a valuation allowance is assessed on the basis of projected separate return results.Commissions& related clearing expensesCommissions and related clearing expenses are recognized on a tradedate basis.Revenue ecognition The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers. This amended guidance me effective for thefiscal year followingDecember 15, 2018. The guidance requires entities to recognize revenue to depict the transfer of promised goods or servi

6 ces to customers in an amount thatis ref
ces to customers in an amount thatis reflective of the consideration the entity expectsin exchange for those goods and servicesre were no material changes in its revenue recognition policies and no material impact on our financial statement as a result of the new standard. BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��7 &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ;3 Accounting evelopments Accounting tandards dopted in 2019The Company adopted FASB ASC 842 Leases (“ASC 842”) effective January 1, 2019 under the arent operating lease agreement. ASC 842 requires the recognition of all leases that are longer than one year onto the statement of financial condition, which will result in the recognition of a right of use asset and corresponding lease liability. The right of use asset and lease liability will be measured initially using the present value of the remaining rental payments. Assets segregated or held in separate accounts under federal and other regulations The statement of financial condition on December 31, 201, included assets segregated or held in separate accounts under the Commodity Exchange Act as follows: Cash $ 4 , 613 , 886 Cash m argin on d eposit with exchange clearing organization 7 , 247 , 318 Rec ei vable from exchange clearing organization, net 533,928 ───────── $ 12 , 395 , 132 ═════════ Deposits with xchange lear

7 ing rganization The statement of finan
ing rganization The statement of financial condition on December 31, 201, included deposits with clearingrganization carried at fair value as follows: Margins Cash and cash equivalents $ 7 , 247 , 318 Guarantee deposit Cash and cash equivalents 2,500,000 ──────── $ 9 , 747 , 318 ════════ BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��8 &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ;6 Fixed assets Fixed assets consisted of the following at December 31, 201 Computer equipment $ 19,051 Furniture and fixtures 1,610 Computer software 7,412 ─────── Fi硥d⁡獳et猬⁡t⁣o獴 ㈸,07 Acc畭畬慴敤⁤数r散i慴i潮 慮搠慭m潲tiz慴ion †††† ──────── N整⁦ix敤⁡ss整s $ 0 ═══ ═══ Short term bank loans As of December 31, 2019, the Company does not have any bank loans but has an uncommitted credit facility with Bank of China New York Branch. 8 Subordinated borrowings As of December 31, 201, the Companyborrowed $00,000under a revolving subordinated loan agreement with an affiliate, BOC International Holdings Limited. See note 1for details of the revolving subordinated loan agreement. ncome tax expenseThe Company’s income tax benefitof $2,993relates to state, local, andother taxesDeferred taxe

8 s result from temporary differences betw
s result from temporary differences between tax laws and financial accounting standards. As of December 31, 201, the Company is unsure if the deferred tax asset of approximately $822,188relating to the accumulated unutilized carry forward losses of approximately $12,814,007will be realized through future taxable profits. As such, the Company established a full valuation allowance against this asset.Concentration of Credit Risk s ofDecember 31, 201significant credit concentrations consisted of cash balances with the CME Group, Inc., Bank of China New York Branch, and JP Morgan Chase & Co. of $747112and $2,067, respectively. Management does not believe the Company has significant exposure to any credit risk on cash balances. BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��10 &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ;13 Agreements and related party transactions (continued)During the year, the Company entered into transactions with an affiliate, BOC International Holdings Limited (“BOCHKHThe transactions were covered under a service level agreement with BOCAt December 31, 201, a total of $896was outstanding and is reported as due to related parties on the statement of financial conditiThe Company entered into a revolving subordinated loan agreement (“the Agreement”) with BOCHKHNovember 18, 2016. The Agreement terminates on November 18, 202, the scheduled maturity date. The maximum amount that can be borrowed under the Agree

9 ment is $30 million with an interest rat
ment is $30 million with an interest rate of London Interank Offer Rate (LIBOR) plus 2%Any funds willapproved by the CME and available in computing net capital under the Commodity Exchange Act. During 201, the Company drew down a total of $1,00,000 under the Agreement. As stated in note 8, as ofDecember 31, 201ubordinated borrowings outstanding and payable to BOCHKHtotaled $00,000, with a maturity date of November 18, 202Additionally, the Company maintains bank accounts and regulated bank accounts with the Bank of China New York Branch, a related party. As of December 31,, the balances were $424313which were included in cash and cash segregated under federal and other regulations on the statement of financial condition, respectivelyMinimum capital requirementThe Company issubject to the minimum capital requirements pursuant to regulation 1.17 under the rules and regulations of the CFTC(“CFTC Regulation 1.17”). Under CFTC Regulation 1.17, the Company is required to maintain net capital equivalent to the greater of $1,000,000or the sum of 8% of the customer risk maintenance margin requirement plus 8% of the noncustomer risk maintenance margin requirement or another dollar requirement set by a registered futures association of which it isa member. nder the rules of the CME, the Company is required to maintain net capital equivalent to the greater of $5,000,000 or 8% of the customer risk maintenance margin requirement plus 8% of the noncustomer risk maintenance margin requirement. On December 31, 201, in accordance with CFTC Regulation 1.17, the Company had adjusted net capital of $959, which was 148959in excess of itsrequired net apital of $1,

10 000Under the requirements of the CME, th
000Under the requirements of the CME, the Company's minimum capital requirement and adjusted net capital were $5,000,000 and $959respectively. The net capital rule may effectively restrict member withdrawals. BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 ��11 &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ;15 Fair value measurement and disclosuresASC Topic 820, Valuations (“ASC 820”)defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. 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. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by ASC 820, are used to measure fair value.The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levelLevel 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.Level 2 inputs are inputs other than quoted pricesincluded within Level 1 that are observable for the asset or

11 liability, either directly or indirectl
liability, either directly or indirectly.Level 3 are unobservable inputs for the asset or liability and rely on management’s own assumptions that market participants would use in pricing the asset or liability. The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company’s own data.The Company held no Level 1, Level 2 or Level 3 assets as of December 31, 201Subsequent eventsThe Company’s management has evaluated events and transactions through February, 20No material events requiring disclosure in the financial statements were found. �� &#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [7;.72;“ 3;.25; 3;2.5; 62;&#x.477; ]/;&#xSubt;&#xype ;&#x/Foo;&#xter ;&#x/Typ; /P; gin; tio;&#xn 00;&#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [7;.72;“ 3;.25; 3;2.5; 62;&#x.477; ]/;&#xSubt;&#xype ;&#x/Foo;&#xter ;&#x/Typ; /P; gin; tio;&#xn 00; &#x/MCI; 0 ;&#x/MCI; 0 ; &#x/MCI; 1 ;&#x/MCI; 1 ; &#x/MCI; 2 ;&#x/MCI; 2 ; &#x/MCI; 3 ;&#x/MCI; 3 ; &#x/MCI; 4 ;&#x/MCI; 4 ; &#x/MCI; 5 ;&#x/MCI; 5 ; &#x/MCI; 6 ;&#x/MCI; 6 ; &#x/MCI; 7 ;&#x/MCI; 7 ; &#x/MCI; 8 ;&#x/MCI; 8 ; &#x/MCI; 9 ;&#x/MCI; 9 ; &#x/MCI; 10;&#x 000;&#x/MCI; 10;&#x 000; &#x/MCI; 11;&#x 000;&#x/MCI; 11;&#x 000; &#x/MCI; 12;&#x 000;&#x/MCI; 12;&#x 000; &#x/MCI; 13;&#x 000;&#x/MCI; 13;&#x 000; &#x/MCI; 14;&#x 000;&#x/MCI; 14;&#x 000; &#x/MCI; 15;&#x 000;&#x/MCI; 15;&#x 000; &#x/MCI; 16;&#x 000;

12 &#x/MCI; 16;&#x 000; &#x/MCI; 17
&#x/MCI; 16;&#x 000; &#x/MCI; 17;&#x 000;&#x/MCI; 17;&#x 000; &#x/MCI; 18;&#x 000;&#x/MCI; 18;&#x 000; &#x/MCI; 19;&#x 000;&#x/MCI; 19;&#x 000; &#x/MCI; 20;&#x 000;&#x/MCI; 20;&#x 000; &#x/MCI; 21;&#x 000;&#x/MCI; 21;&#x 000; &#x/MCI; 22;&#x 000;&#x/MCI; 22;&#x 000;Supplementary Schedules Financial Statements and Supplementary Schedules Pursuant to Regulation 1.10 of the Commodity Exchange Act December 31, 201Available for Public InspectionBOCCommodit& Futures (USA) LLC (A wholly ownd subsidiary of BOC International (USHoldings Inc.) BOCI Commodities & Futures (USA) LLC Schedule 6 Statement Cleared Swaps Segregation Requirements and Funds in Cleared Swaps Customer AccountsDecember 31,2019Cleared Swaps Customer Requirements Net ledger balance: Cash $ — Securities — Net unrealized profit (loss) in open cleared swaps — Cleared swaps options Market value of open cleared swaps options contracts purchased — Market value of open cleared swaps granted (sold) — Net equityAccounts liquidating to a deficit and accounts with debit balances with no open trades (offset by customer owned securities totaling $0) — Amount required to be segregatedFunds in Cleared Swaps Customer Segregated Accounts Deposited in cleared swaps segregated accounts at banks: Cash 6 Securities representing investments of cleared swaps customers’ funds, at market — Securities held for particular cleared swaps customers in lieu of cash, at market — Margins on deposit with clearing organizations in cleared swaps segregated accounts: Cash — Secu

13 rities representing investments of clear
rities representing investments of cleared swaps customers’ funds, at market — Securities held for particular cleared swaps customers in lieu of cash, at market — Net settlement receivable from clearing organizations — Cleared swaps options: Value of open cleared swaps long option contracts — Value of open cleared swaps short option contracts — Net equities with other futures commission merchants: Net liquidating equity — Securities held for particular cleared swaps customers in lieu of cash, at market — Cleared swaps customer funds on hand — Total amount in cleared swaps customer segregationExcess funds in segregationManagement target amount for excess funds in cleared swaps segregated accountsExcess funds in cleared swaps customer segregation over management target excess There are no material differences between this computation and the Company’s corresponding unaudited Form 1FR-FCM filing as of December 31, 2019 18 BOCI Commodities & Futures (USA) LLC Schedule 5Statement Secured Requirement and Funds Held in Separate AccountsDecember 31,2019Amount required to be set aside in separate Section 30.7 accountsFunds on deposit in separate Section 30.7 accounts:Cash in banksBanks located in the United StatesOther banks designated by the CommissionEquities with registered futures commission merchants(Name of FCM)CashUnrealized gain on open futures contractsAmounts held by clearing organizations of foreign boards of trade(Name of Clearing Org)CashAmount due from clearing organization - daily variationAmounts held by members of foreign boards of trade(Name of brokers)CashUnrea

14 lized gain on open futures contractsSecu
lized gain on open futures contractsSecurities on depositValue of long option contractsValue of short option contracts Total funds in separate Section 30.7 accounts 6 Excess (deficiency) Set Aside Funds for Secured Amount Management Target Amount for Excess Funds in Separate Section 30.7 Accounts Excess (deficiency) funds in separate Section 30.7 accounts over (under) Management Target Amount ExcessThere are no material differences between this computation and the Company’scorresponding unaudited Form 1FR-FCM filing as of December 31, 2019 17 BOCI Commodities & Futures (USA) LLC Schedule 4Statement Segregation Requirement and Funds in Segregation for Customers' Dealer Options December 31, 2019The Company does not carry customers' dealer option accounts as defined by Commodity Exchange Act Regulation 32.6. Therefore, the Company is exempt from provisions of Regulations 32.6. 16 BOCI Commodities & Futures (USA) LLC Schedule 3Statement Segregation Requirement and Funds in SegregationDecember 31,2019Segregation requirement:Net ledger balance:Cash1,491,318SecuritiesNet unrealized loss in open futures contracts traded on a contract market7,406,323Exchange traded options:Market value of open options contracts purchased on a contract marketMarket value of open options contracts sold on a contract marketNet equity8,897,641Accounts liquidating to a deficit and accounts with debit balances withno open trades (offset by customer owned securities totaling $_______)Amount required to be segregated8,897,641Funds on deposit in segregation:Deposited in segregated funds bank accounts:Cash4,613,874Securities representing investments of customers’ funds, at m

15 arketSecurities held for particular cust
arketSecurities held for particular customers in lieu of cash margins, at marketMargins on deposit with clearing organizations of contract markets:Cash7,247,318Securities representing investments of customers’ funds, at marketSecurities held for particular customers in lieu of cash margins, at marketNet settlement payable to clearing organizations of contract markets533,928Exchange traded options:Value of open long option contractsValue of open short option contractsNet equities with other futures commission merchants:Net liquidating equitySecurities held for particular customers in lieu of cash margins, at marketCustomers’ segregated funds on hand (warehouse receipts)Total amount in segregation12,395,120Excess funds in segregation3,497,479Management target amount for excess funds in segregation1,000,000Excess funds in segregation over management target amount excess 2,497,479There are no material differences between this computation and the Company’scorresponding unaudited Form 1FR-FCM filing as of December 31,2019 BOCI Commodities & Futures (USA) LLC Schedule 2Statement of the Computation of Net Capital and Minimum Capital RequirementsDecember 31,2019Current assets, as defined (see reconciliation on prior page) 16,293,625Adjusted total liabilities (see reconciliation on prior page)(10,144,666) Net capital6,148,959Charges against net capital:Twenty percent of market value of uncovered inventoriesU.S government obligations (fair value $________)Corporate equities (fair value $_________)Other securities (fair value $________)Charges against securities purchased under agreements to resell Undermargined customer commodity futures accounts

16 Charges against open commodity positions
Charges against open commodity positions - proprietaryFive percent of unsecured receivables from foreign brokersAdjusted net capital (net capital less charges against net capital)6,148,959Net capital required using risk-based requirement:Amount of customer risk maintenance margin7,260,6688% of customer risk-based requirement580,853Amount of noncustomer risk maintenance margin8% of customer risk-based requirementMinimum dollar amount requirement1,000,000Amount required1,000,000Excess net capital 5,148,959 Computation of Early Warning Level Enter 110% of risk-based amount required or 150% of1,500,000The Minimum Dollar Requirment of 1,000,000 There are no material differences between this computation and the Company’scorresponding unaudited Form 1FR-FCM filing as of December 31, 2019 BOCI Commodities & Futures (USA) LLC Schedule 1Reconciliation of Statement of Financial Condition to Minimum Net Capital RequirementsDecember 31,2019Total Assets per statement of financial Condition $ 16,349,049 Deduct: Noncurrent assets (as defined)Cash (at affiliate bank) (55,424) Fixed Asset 0 (55,424)Current Assets Under CFTC Regulation 1.17 $ 16,293,625 Total Liabilities per statement of financial condition $ 10,144,666 Liabilities Under CFTC Regulation 1.17 $ 10,144,666 13 BOCI Commodities & Futures (USA) LLC(A wholly owned subsidiary of BOC International (USA) Holdings Inc.)Notes to the Statement of Financial Condition For the year ended December 31, 2019 9 Defined contribution plan mployees of the Company,through a service level agreement with it’s parent, are eligible to participate in a defined contribution 401(k) plan (the “Plan”) upon

17 meeting certain eligibility requirements
meeting certain eligibility requirements. The Company contributes to the Planup tothe lesser of 6% of compensation or 9,000 per employee. For the year ended December 31, 201, the Company did not contribute to the plan. 12Guarantees ccounting Standards Codification Topic 460 (“ASC 460”), Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others. The Company is a member of CME, a clearing organization that clears futures and options ontracts.Associated with its membershipin CME, the Company may be required to pay a proportionate share of the financial obligations of another member who may default on its igations to the exchange or the clearinghouse. While the rules governing different exchange or clearinghouse memberships vary, in general the Company’s guarantee obligations would arise only if the exchange or clearinghouse had previously exhausted its resourcesor and other available remedies. The maximum potential payout under th

18 is membership agreement cannot be estima
is membership agreement cannot be estimated.However, the Company has not recorded any contingent liability in the statement of financial condition for this agreement and believes that any potential requirement to make payments under this agreement is remote. 13Agreements and related party transactions Related parties are those parties that have the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or other entities.The various CME exchange memberships required for the Company’s clearing activities are owned by an affiliate, BOCI Global Commodities Holdings Limited. The exchange memberships are registered to be used bythe Company. The aggregate fair market value of the exchange membership is $1,336700The Company has a service level agreement with its Parent under which general and administrative services are shared. December 31, 201, the Company had a payable to the arent totaling 117,932and is reported as due torelated parties on the statement of financial Bank of China International Holdings UK HoldingsBOCI UK Holdings REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To theember of BOCI Commodities & Futures (USA) LLCOpinion on the Financial Statement We have audited the accompanying statement of financial conditionof BOCI Commodities & Futures under the Commodity Exchange Act, and the related notes and supplementary schedules(collectively referred to as the financial statementIn our opinion, the statement of

19 financial conditionpresentfairly, in al
financial conditionpresentfairly, in all material respects, the financial position of BOCI Commodities & Futures (USA) LLCas of December 31, 2019in conformity with accounting principles generally accepted in the United States of America. Basis for OpinionThis financial statement isthe responsibility of BOCI Commodities & Futures (USA) LLC’s management. We conducted our audit in accordance with the standards of the PCAOBand auditing standards generally accepted in the United States of AmericaThose standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks Supplemental Information The information in SupplementarySchedulesthe supplementalinformation”)has been subjected to audit procedures performed in conjunction with the audit of BOCI Commodities & Futures (USA) LLC’s financial statement. The supplemental information is the responsibility of the Company’s management. financial statementor the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information,we evaluated whether the supplemental information, including its form and content, is presented in conformity with Regulation 1.10 of the Commodity Exchange Act. In our opinion, the Supplementary Schedules arefairly stated, in all material respects, in relation to the financial statementas a whole. Chicago, IllinoisF