Related Parties

The Company interacts with Jefferies LLC, who is the beneficial owner of more than 10 percent of the outstanding KCG Class A Common Stock. The Company also has trading and other activities with certain investees for which it accounts for under the equity method of accounting or accounted for under the equity method at any time during the relevant accounting period. Each is considered a related party for the applicable periods. See Footnote 8 "Investments" for the carrying value of these investees at March 31, 2017 and December 31, 2016 and for the Company's income with respect to its equity earnings from these investees for the three months ended March 31, 2017 and 2016.

As noted in Footnote 8 "Investments", in 2016, the Company sold substantially all of its investment in Bats, which it accounted for under the equity method. As a result of the sales, Bats is no longer accounted for under the equity method, and beginning in 2017, Bats is no longer considered a related party.

The Company earns revenues, incurs expenses and maintains balances with these related parties or their affiliates in the ordinary course of business. As of the date and period indicated below, the Company had the following balances and transactions with its related parties or their affiliates (in thousands):



	For the three months ended March 31,
Statements of Operations	2017		2016
Revenues
Commissions and fees	$	1,868	$	6,663
Trading revenues, net	791		477
Interest, net	119		103
Total revenues from related parties	$	2,778	$	7,243
Expenses
Execution and clearance fees⁽¹⁾	$	313	$	880
Communications and data processing	5,610		3,206
Payment for order flow	—		5
Collateralized financing interest	86		78
Other expense	—		5
Total expenses incurred with respect to related parties	$	6,009	$	4,174


⁽¹⁾	Represents net volume based fees paid or received by KCG for taking or providing liquidity to related trading venues. Volume based fees will vary period to period based on usage.



Statements of Financial Condition	March 31, 2017		December 31, 2016
Assets
Securities borrowed	$	17,754	$	5,293
Receivable from brokers, dealers and clearing organizations	2,134		2,106
Other assets	16		62,906
Liabilities
Securities loaned	$	2,063	$	2,594
Payable to brokers, dealers and clearing organizations	45		188
Accrued expenses and other liabilities	122		3,708

In the three months ended March 31, 2017 and 2016, the Company paid $19,000 and $36,000, respectively, in fees to Jefferies LLC for acting as broker in connection with the Company's stock buyback program. Such fees are recorded within Treasury stock, at cost in the Consolidated Statements of Financial Condition at both March 31, 2017 and December 31, 2016 and are not included in the above table.

See Footnote 15 "Warrants and Stock Repurchase" for additional information on stock repurchases.

See Footnote 1 “Organization and Description of the Business” for further information regarding the Merger.