Statement of Financial Condition

UBS Securities LLC Notes to the Statement of Financial Condition (continued) (In Thousands) 2. Significant Accounting Policies (continued) Recent Accounting Developments (continued) Pending Adoption (continued) ASU 2021-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 and is applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company is presently evaluating the effect of the ASU and expects no material impact to its statement of financial condition. 3. Cash Segregated Under Federal and Other Regulations At December 31, 2021, $351,475 of cash and securities was segregated, secured and sequestered in accordance with federal and other regulations. The Company is required to segregate cash in a special reserve bank account for the exclusive benefit of customers under SEC Rule 15c3-3 (the "Customer Protection Rule"). The Company also performs a separate computation for assets in the proprietary accounts of broker-dealers ("PAB") in accordance with the Customer Protection Rule. At December 31, 2021 the Company maintained $5,825,617 of segregated securities comprised of $5,550,000 of qualified securities segregated for 15c3-3 purposes and the remaining $275,617 pursuant to FCM requirements. At December 31, 2021, the Company was required to segregate $5,949,552, secure $1,507,615, and sequester (OTC cleared swaps) $1,022,384 of cash or securities under the Commodity Exchange Act. The Company had $6,230,079 segregated, $1,663,609 secured, and $1,268,500 sequestered (OTC cleared swaps) which represented funds deposited by clients, funds accruing to clients as a result of trades or contracts, and securities owned by clients. Securities owned by clients and segregated, secured, or sequestered by the Company are not reflected on the statement of financial condition. 4. Collateralized Agreements The Company enters into collateralized resale and repurchase agreements and securities borrowing and lending transactions that may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes credit risk associated with these activities by monitoring counterparty credit exposure and collateral values on a daily basis and requiring additional collateral to be deposited with or returned by the Company when deemed necessary. In addition, the Company manages credit risk by entering into netting agreements with counterparties. These netting agreements generally enable the counterparties to offset liabilities against available assets received - in the ordinary course of business and/or in the event that the counterparty to the transaction is unable to fulfill its contractual obligation. The Company offsets these financial assets and financial liabilities on the statement of financial condition only when it has an enforceable legal right to offset the respective recognized amounts and meets other offsetting requirements. 11

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