Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2:

	Level 1		Level 2			Level 3		Total
	(In thousands)
As of December 31, 2020
Money market funds	$	20,856	$	—		$	—	$	20,856
Trading securities
Corporate debt		—		19,222			—		19,222
Mutual funds held in rabbi trust		—		8,889			—		8,889
Foreign currency forward position		—		(805	)		—		(805	)
Total	$	20,856	$	27,306		$	—	$	48,162
As of December 31, 2019
Money market funds	$	99,755	$	—		$	—	$	99,755
Securities available-for-sale
Corporate debt		—		137,835			—		137,835
Trading securities
Corporate debt		—		31,120			—		31,120
U.S. Treasuries		—		55,305			—		55,305
Mutual funds held in rabbi trust		—		6,217			—		6,217
Foreign currency forward position		—		(2,772	)		—		(2,772	)
Total	$	99,755	$	227,705		$	—	$	327,460

Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted market prices. The mutual funds held in a rabbi trust represent investments associated with the Company’s deferred cash incentive plan. There were no financial assets classified within Level 3 during the years ended December 31, 2020 and 2019.

The table below presents the carrying value, fair value and fair value hierarchy category of the Company’s financial assets and liabilities that are not measured at fair value on the Consolidated Statement of Financial Condition. The carrying values of the Company’s financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair value due to the short-term nature of the underlying assets and liabilities.

	Carrying Value		Fair Value			Level 1		Level 2		Level 3			Total
	(In thousands)
As of December 31, 2020
Financial assets not measured at fair value:
Cash and cash equivalents	$	460,858	$	460,858	$		460,858	$	—		$	—		$	460,858
Cash segregated under federal regulations		50,059		50,059			50,059		—			—			50,059
Accounts receivable, net of allowance		79,577		79,577			—		79,577			—			79,577
Receivables from broker-dealers, clearing organizations and customers		279,915		279,915			97,043		182,872			—			279,915
Total	$	870,409	$	870,409	$		607,960	$	262,449		$	—		$	870,409
Financial liabilities not measured at fair value:
Payables to broker-dealers, clearing organizations and customers	$	133,326	$	133,326	$		—	$	133,326		$	—		$	133,326
As of December 31, 2019
Financial assets not measured at fair value:
Cash and cash equivalents	$	270,124	$	270,124	$		270,124	$	—		$	—		$	270,124
Accounts receivable, net of allowance		62,017		62,017			—		62,017			—			62,017
Total	$	332,141	$	332,141	$		270,124	$	62,017		$	—		$	332,141

The Company enters into foreign currency forward contracts to hedge the net investment in the Company’s U.K. subsidiaries. The Company designates each foreign currency forward contract as a hedge and assesses the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed prospectively and retrospectively. These hedges are for a one-month period and are used to limit exposure to foreign currency exchange rate fluctuations. The fair value of the asset is included in prepaid expenses and other assets and the fair value of the liability is included in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. Gains or losses on foreign currency forward contracts designated as hedges are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. A summary of the foreign currency forward position is as follows:

	As of December 31,
	2020			2019
	(In thousands)
Notional value	$	157,057		$	155,885
Fair value of notional		157,862			158,657
Fair value of the (liability)	$	(805	)	$	(2,772	)

The following is a summary of the Company’s investments:

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
	(In thousands)
As of December 31, 2020
Trading securities
Corporate debt	$	19,081	$	141	$	—		$	19,222
Mutual funds held in rabbi trust		7,680		1,209		—			8,889
Total investments	$	26,761	$	1,350	$	—		$	28,111
As of December 31, 2019
Securities available-for-sale
Corporate debt	$	137,119	$	721	$	(5	)	$	137,835
Trading securities
Corporate debt		31,120		14		(14	)		31,120
U.S. Treasuries		54,738		567		—			55,305
Mutual funds held in rabbi trust		5,173		1,044		—			6,217
Total trading securities		91,031		1,625		(14	)		92,642
Total investments	$	228,150	$	2,346	$	(19	)	$	230,477

The following table summarizes the fair value of the investments based upon the contractual maturities:

	As of December 31,
	2020		2019
	(In thousands)
Less than one year	$	18,290	$	120,850
Due in 1 - 5 years		9,821		109,627
Total	$	28,111	$	230,477

Proceeds from the sales and maturities of investments during the years ended December 31, 2020, 2019 and 2018 were $261.6 million, $262.1 million and $409.3 million, respectively. Net unrealized losses and gains on trading securities were $0.4 million and $0.8 million for the year ended December 31, 2020 and 2019 and were immaterial for the years ended December 31, 2018. Net realized gains were $1.7 million for the year ended December 31, 2020, and were immaterial for the years ended December 31, 2019 and 2018.

The following table provides fair values and unrealized losses on corporate debt investments and by the aging of the securities' continuous unrealized loss position as of December 31, 2020 and 2019 respectively:  

	Less than Twelve Months					Twelve Months or More					Total
	Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses
	(In thousands)
As of December 31, 2020
Corporate debt	$	1,369	$	—		$	—	$	—		$	—	$	—
As of December 31, 2019
Corporate debt	$	27,999	$	(18	)	$	4,406	$	(1	)	$	32,405	$	(19	)