XML 41 R29.htm IDEA: XBRL DOCUMENT

Related Party Transactions

6 Months Ended

May 31, 2020

Officers, Directors and Employees. The following sets forth information regarding related party transactions with our officers, directors and employees:


•	At May 31, 2020 and November 30, 2019, we had $32.3 million and $34.8 million, respectively, of loans outstanding to certain of our officers and employees (none of whom are executive officers or directors) that are included in Other assets in our Consolidated Statements of Financial Condition.


•	Receivables from and payables to customers include balances arising from officers’, directors’ and employees’ individual security transactions. These transactions are subject to the same regulations as all customer transactions and are provided on substantially the same terms.


•	One of our directors had an investment in a hedge fund managed by us of approximately $3.6 million at November 30, 2019. In May 2020, the director fully redeemed his interest in this fund due to the wind down of an asset management platform.

See Note 8, Variable Interest Entities, and Note 17, Commitments, Contingencies and Guarantees, for further information regarding related party transactions with our officers, directors and employees.

Jefferies. The following is a description of our related party transactions with Jefferies and its affiliates:


•	We provide services to and receive services from Jefferies under service agreements (in millions):



	Three Months Ended May 31,				Six Months Ended May 31,
	2020		2019		2020		2019
Charges to Jefferies for services provided	$	10.1	$	9.6	$	20.5	$	26.1
Charges from Jefferies for services received	7.5		0.6		15.4		1.3


•	We also provide investment banking and capital markets and asset management services to Jefferies and its affiliates. The following table presents the revenues earned by type of services provided (in millions):



	Three Months Ended May 31,					Six Months Ended May 31,
	2020		2019			2020		2019
Investment banking	$	—	$	7.9		$	—	$	7.9
Commissions and other fees	0.4		0.6			0.7		1.2
Other revenues	—		(0.1		)	—		—


•	Receivables from and payables to Jefferies, included in Other assets and Accrued expenses and other liabilities, respectively, in our Consolidated Statements of Financial Condition (in millions):



	May 31, 2020		November 30, 2019
Receivable from Jefferies	$	0.3	$	0.9
Payable to Jefferies	5.5		4.3


•	During the six months ended May 31, 2020, we paid distributions of $12.6 million to Jefferies, based on our results for the three months ended November 30, 2019. At May 31, 2020, we have accrued a distribution payable of $152.1 million, based on our results for the six months ended May 31, 2020.

•

Pursuant to a tax sharing agreement entered into between us and Jefferies, payments are made between us and Jefferies to settle current tax receivables and payables. At May 31, 2020, a net current tax payable to Jefferies of $55.3 million is included in Accrued expenses and other liabilities, in our Consolidated Statements of Financial Condition. At November 30, 2019, a net current tax receivable from Jefferies of $24.4 million is included in Other assets, in our Consolidated Statements of Financial Condition. In May 2020, we made a payment of $32.0 million to Jefferies, which reduced the cumulative net current tax payable.


•	We purchase securities from and sell securities to Jefferies, at fair value (in millions). There were no gains or losses on these transactions.



	Three Months Ended May 31,				Six Months Ended May 31,
	2020		2019		2020		2019
Securities purchased from Jefferies	$	13.9	$	—	$	39.9	$	885.6
Securities sold to Jefferies	—		17.9		—		17.9


•	In connection with foreign exchange contracts entered into under a prime brokerage agreement with an affiliate of Jefferies, we have $2.1 million and $9.9 million at May 31, 2020 and November 30, 2019, respectively, included in Payables— brokers, dealers and clearing organizations.

•

We enter into OTC foreign exchange contracts with a subsidiary of Jefferies. In connection with these contracts, we had $0.2 million included in Financial instruments owned, at fair value and $0.6 million included in Financial instruments sold, not yet purchased, at fair value, in our Consolidated Statements of Financial Condition at May 31, 2020 and November 30, 2019, respectively. Net gains (losses) relating to these contracts, which are included in Principal transactions revenues in our Consolidated Statements of Earnings, are as follows (in millions):



	Three Months Ended May 31,				Six Months Ended May 31,
	2020		2019		2020		2019
Net gains (losses) on foreign exchange contracts	$	1.6	$	0.7	$	1.0	$	0.7


•	Two of our directors had investments totaling $0.4 million at November 30, 2019 in a hedge fund managed by Jefferies. In December 2019, both directors fully redeemed their interests in this fund.

•

We have investments in hedge funds managed by Jefferies of $229.5 million and $223.5 million at May 31, 2020 and November 30, 2019, respectively, included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition. Net gains on our investments in these hedge funds, which are included in Principal transactions revenues in our Consolidated Statements of Earnings, are as follows (in millions):



	Three Months Ended May 31,				Six Months Ended May 31,
	2020		2019		2020		2019
Net gains from our investments	$	2.5	$	1.3	$	6.3	$	2.3


•	In connection with our capital markets activities, from time to time we make a market in long-term debt securities of Jefferies (i.e., we buy and sell debt securities issued by Jefferies). At November 30, 2019, approximately $0.1 million of debt issued by Jefferies is included in Financial instruments owned, at fair value in our Consolidated Statements of Financial Condition.


•	We have entered into a sublease agreement with an affiliate of Jefferies for office space. For the three and six months ended May 31, 2020, we received payments for rent and other expenses of $0.2 million and $0.4 million, respectively, from this affiliate.

For information on transactions with our equity method investees, see Note 9, Investments.