Regulatory Requirements

3 Months Ended

Feb. 28, 2025

Broker-Dealer [Abstract]

Regulatory Requirements

Note 20. Regulatory Requirements

Net Capital

Jefferies LLC is a broker-dealer registered with the SEC and a

member firm of the Financial Industry Regulatory Authority

(“FINRA”) and is subject to the SEC Uniform Net Capital Rule

(“Rule 15c3-1”), which requires the maintenance of minimum net

capital, and has elected to calculate minimum capital

requirements using the alternative method permitted by Rule

15c3-1 in calculating net capital. Jefferies LLC, as a dually-

registered U.S. broker-dealer and futures commission merchant

(“FCM”), is also subject to Regulation 1.17 of the Commodity

Futures Trading Commission (“CFTC”) under the Commodity

Exchange Act (“CEA”), which sets forth minimum financial

requirements. The minimum net capital requirement in

determining excess net capital for a dually registered U.S. broker-

dealer and FCM is equal to the greater of the requirement under

SEA Rule 15c3-1 or CFTC Regulation 1.17. Accordingly, FINRA is

the designated examining authority for Jefferies LLC and the

National Futures Association (“NFA”) is the designated self-

regulatory organization (“DSRO”) for Jefferies LLC as an FCM.

Jefferies Financial Services, Inc. (“JFSI”) is registered with the

SEC as a Security-Based Swap Dealer (“SBS Dealer”) and an OTC

Derivatives Dealer (“OTCDD”) subject to the SEC’s SBS dealer

regulatory rules and the SEC’s net capital requirements pursuant

to Rule 18a-1. JFSI is also registered as a swap dealer with the

CFTC and is subject to the CFTC’s regulatory capital

requirements pursuant to the minimum financial requirements for

swap dealers under CFTC Regulation 23.101. Additionally, as a

registered member firm, JFSI is subject to the net capital

requirements of the NFA. Accordingly, the SEC is the designated

examining authority for JFSI in its capacity as an SBS Dealer and

OTCDD, while the NFA is the DSRO for JFSI, as a CFTC registered

swap dealer.

Certain non-U.S. subsidiaries are subject to capital adequacy

requirements as prescribed by the regulatory authorities in their

respective jurisdictions. This includes Jefferies International

Limited which is subject to the regulatory supervision and

requirements of the Financial Conduct Authority (“FCA”) in the

U.K. Jefferies International Limited’s’ own funds requirement

represents the highest of the permanent minimum capital

requirement, fixed overheads requirement and k-factor

requirements set out in the Investment Firms Prudential Regime

(“IFPR”) under the FCA’s MIFIDPRU sourcebook.

At February 28, 2025, Jefferies LLC’s and JFSI’s net capital and

excess net capital were as follows:

$ in thousands	Net Capital	Excess Net Capital
Jefferies LLC .................................................................	$1,112,504	$984,377
JFSI - SEC ......................................................................	426,334	406,334
JFSI - CFTC ...................................................................	426,334	400,338

In addition, the equivalent capital requirement for Jefferies

International Limited, on a consolidated basis, is a total capital of

$1,740.0 million and an excess capital of $920.0 million at

February 28, 2025.

At February 28, 2025, Jefferies LLC, JFSI and JIL are in

compliance with their applicable requirements.

The regulatory capital requirements referred to above may

restrict our ability to withdraw capital from our regulated

subsidiaries.

Customer Protection and Segregation Requirement

As a registered broker dealer that clears and carries customer

accounts, Jefferies LLC is subject to the customer protection

provisions under SEC Rule 15c3-3 and is required to compute a

reserve formula requirement for customer accounts and deposit

cash or qualified securities into a special reserve bank account

for the exclusive benefit of customers. At February 28, 2025,

Jefferies LLC had $485.1 million in cash and qualified U.S.

Government securities on deposit in special reserve bank

accounts for the exclusive benefit of customers.

As a registered broker dealer that clears and carries proprietary

accounts of brokers or dealers (commonly referred to as “PAB”),

Jefferies LLC is also required to compute a reserve requirement

for PABs pursuant to SEC Rule 15c3-3. At February 28, 2025,

Jefferies LLC had $595.0 million in cash and qualified U.S.

Government securities in special reserve bank accounts for the

exclusive benefit of PABs.

The qualified securities meeting the 15c3-3 customer and PAB

requirements are included in Cash and securities segregated and

Securities purchased under agreements to resell.