0001592386-20-000003 | 10-K | XBRL Viewer

Development of capitalized software

(48,492)

(21,482)

(14,158)

Acquisition of property and equipment

(9,320)

(26,467)

(18,932)

Proceeds from sale of telecommunication assets

600

Investment in joint ventures

(6,250)

(23,669)

Acquisition of Teza Technologies

(5,594)

Net cash provided by (used in) investing activities

(899,643)

329,174

(838,016)

Distribution from Virtu Financial to non-controlling interest

(99,221)

(206,903)

(89,563)

Dividends

(112,414)

(100,329)

(63,814)

Stock options exercised

931

76,754

Short-term borrowings, net

39,935

(15,000)

7,000

Proceeds from long-term borrowings

1,492,500

1,115,036

Repayment of long term borrowings

(500,000)

(256,473)

Repayment of KCG Notes

(480,987)

Tax receivable agreement obligations

(12,359)

(7,045)

Debt issuance costs

(35,702)

(2,261)

(56,505)

Issuance of common stock, net of offering costs

735,974

Issuance of common stock in connection with secondary offering, net of offering costs

(375)

(950)

Net cash provided by (used in) financing activities

769,580

(835,482)

889,797

Effect of exchange rate changes on cash and cash equivalents

(1,475)

(5,127)

9,117

Net increase (decrease) in cash and cash equivalents

37,233

203,160

351,472

Cash, cash equivalents, and restricted or segregated cash, beginning of period

736,047

532,887

181,415

Cash, cash equivalents, and restricted or segregated cash, end of period

773,280

736,047

532,887

Supplementary disclosure of cash flow information

Cash paid for interest

205,433

139,412

112,982

Cash paid for taxes

12,273

93,991

5,976

Non-cash investing activities

Share based compensation to developers relating to capitalized software

2,135

2,936

1,605

Non-cash financing activities

Tax receivable agreement described in Note 6

(991)

1,534

Discount on issuance of senior secured credit facility

1,438

Treasury Stock

Repurchase of stock

(15,878)

(66,218)

(2,683)

Class A-2

Repurchase of stock

(11,143)

Class C common stock

Repurchase of stock

(196)

(8,216)

ITG

Acquisition, net of cash acquired, described in Note 3

(835,581)

KCG

Acquisition, net of cash acquired, described in Note 3

(799,632)

BondPoint

Proceeds from sale of business

400,192

DMM Business

Proceeds from sale of business

$ 0

$ 300

[1]	Net of ITG Acquisition; see Note 3

Organization and Basis of Presentation	12 Months Ended
Organization and Basis of Presentation	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation Organization The accompanying consolidated financial statements include the accounts and operations of Virtu Financial, Inc. (“VFI” or, collectively with its wholly owned or controlled subsidiaries, “Virtu” or the “Company”). VFI is a Delaware corporation whose primary asset is its ownership interest in Virtu Financial LLC (“Virtu Financial”). As of December 31, 2019, VFI owned approximately 62.2% of the membership interests of Virtu Financial. VFI is the sole managing member of Virtu Financial and operates and controls all of the businesses and affairs of Virtu Financial and its subsidiaries (the “Group”). The Company is a leading financial firm that leverages cutting edge technology to deliver liquidity to the global markets and innovative, transparent trading solutions to its clients. The Company provides deep liquidity in over 25,000 financial instruments, at over 235 venues, in 36 countries worldwide to help create more efficient markets. Leveraging its global market structure expertise and scaled, multi-asset infrastructure, the Company provides its clients a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. The Company’s product offerings allow its clients to trade on hundreds of venues across over 50 countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income and myriad other commodities. The Company’s integrated, multi-asset analytics platform provides a range of pre and post-trade services, data products and compliance tools that its clients rely upon to invest, trade and manage risk across global markets. On July 20, 2017 (the “KCG Closing Date”), the Company completed the all-cash acquisition of KCG Holdings, Inc. (“KCG”) (the “Acquisition of KCG”). On March 1, 2019 (the “ITG Closing Date”), the Company completed the acquisition of Investment Technology Group, Inc. and its subsidiaries (“ITG”) in an all-cash transaction valued at $30.30 per ITG share, for a total of approximately $1.0 billion (the “ITG Acquisition”). See Note 3 “ITG Acquisition” for further details. ITG was a global financial technology company that will contribute to the Company's Execution Services segment. Virtu Financial’s principal U.S. subsidiaries include Virtu Americas LLC (“VAL”), Virtu ITG LLC (“VITG”), Virtu Alternet Securities LLC (“VALT”), Virtu Financial BD LLC (“VFBD”), and Virtu Financial Capital Markets LLC (“VFCM”, collectively with VFBD, VAL, VITG, and VALT, the “broker-dealers”), which are self-clearing U.S. broker-dealers. Over the course of 2019, in furtherance of our integration efforts, we have been in the process of consolidating our U.S. broker-dealers. We submitted applications to withdraw the SEC registrations for VFBD and VFCM in 2020 and have consolidated their broker-dealer activities within VAL as of December 31, 2019. Other principal U.S. subsidiaries include Virtu Financial Global Markets LLC, a U.S. trading entity focused on futures and currencies; Virtu ITG Analytics LLC, a provider of pre and post-trade analysis, fair value, and trade optimization services; and Virtu ITG Platforms LLC, a provider of workflow technology solutions and network connectivity services. Principal foreign subsidiaries include Virtu Financial Ireland Limited and Virtu ITG Europe Limited, each formed in Ireland; Virtu ITG Canada Corp. and Virtu Financial Canada ULC, each formed in Canada; Virtu Financial Asia Pty Ltd. and Virtu ITG Australia Limited, each formed in Australia; Virtu ITG Hong Kong Limited, formed in Hong Kong; and Virtu Financial Singapore Pte. Ltd. and Virtu ITG Singapore Pte. Ltd., each formed in Singapore, all of which are trading entities focused on asset classes in their respective geographic regions. The Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate. See Note 22 “Geographic Information and Business Segments” for a further discussion of the Company’s segments. Basis of Consolidation and Form of Presentation These consolidated financial statements are presented in U.S. dollars, have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding financial reporting with respect to Form 10-Q and accounting standards generally accepted in the United States of America (“U.S. GAAP”) promulgated by the Financial Accounting Standards Board (“FASB”) in the Accounting Standards Codification (“ASC” or the “Codification”), and reflect all adjustments that, in the opinion of management, are normal and recurring, and that are necessary for a fair statement of the results for the periods presented. The consolidated financial statements of the Company include its equity interests in Virtu Financial and its subsidiaries. The Company operates and controls all business and affairs of Virtu Financial and its subsidiaries indirectly through its equity interest in Virtu Financial. Certain reclassifications have been made to the prior periods’ consolidated financial statements in order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both current and all previously issued financial statements taken as a whole and have no effect on previously reported consolidated net income available to common stockholders. The consolidated financial statements include the accounts of the Company and its majority and wholly-owned subsidiaries. As sole managing member of Virtu Financial, the Company exerts control over the Group’s operations. The Company consolidates Virtu Financial and its subsidiaries’ financial statements and records the interests in Virtu Financial that the Company does not own as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation. The Company has accounted for the Acquisition of KCG under the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of KCG as of the KCG Closing Date were recorded at their respective fair values and added to the carrying value of our existing assets and liabilities. Our reported financial condition, results of operations and cash flows for the periods following the Acquisition of KCG reflect KCG's and our balances and reflect the impact of purchase accounting adjustments. The financial results for 2017 comprise our results for the entire applicable period and the results of KCG from the KCG Closing Date through December 31, 2017. All periods prior to the KCG Closing Date comprise solely our results. As discussed in Note 3 “ITG Acquisition”, the Company has accounted for the ITG Acquisition under the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of ITG, as of the ITG Closing Date, were recorded at their respective fair values and added to the carrying value of the Company’s existing assets and liabilities. The reported financial condition, results of operations and cash flows of the Company for the periods following the ITG Acquisition reflect ITG's and the Company's balances, and reflect the impact of purchase accounting adjustments. The financial results for the year ended December 31, 2019 comprise the Company's results for the entire applicable period and the results of ITG from the ITG Closing Date through December 31, 2019. All periods prior to the ITG Closing Date comprise solely the Company's results.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of Estimates

The Company's consolidated financial statements are prepared in conformity with U.S. GAAP, which require management to make estimates and assumptions regarding measurements including the fair value of trading assets and liabilities, goodwill and intangibles, compensation accruals, capitalized software, income tax, tax receivable agreements, leases, litigation accruals, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, actual results could differ materially from those estimates.

Earnings Per Share

Earnings per share (“EPS”) is calculated on both a basic and diluted basis. Basic EPS excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period. Diluted EPS includes the determinants of the basic EPS and, in addition, reflects the dilutive effect of shares of common stock estimated to be distributed in the future under the Company’s share based compensation plans.

The Company grants restricted stock units (“RSUs”), certain of which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. As a result, the unvested RSUs meet the definition of a participating security requiring the application of the two-class method. Under the two-class method, earnings available to common shareholders, including both distributed and undistributed earnings, are allocated to each class of common stock and participating securities according to dividends declared and participating rights in undistributed earnings, which may cause diluted EPS to be more dilutive than the calculation using the treasury stock method.

Cash and Cash Equivalents

Cash and cash equivalents include money market accounts, which are payable on demand, and short-term investments with an original maturity of less than 90 days. The Company maintains cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company manages this risk by selecting financial institutions deemed highly creditworthy to minimize the risk.

Cash restricted or segregated under regulations and other represents (i) special reserve bank accounts for the exclusive benefit of customers (“Special Reserve Bank Account”) maintained by VAL and VITG in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (“Customer Protection Rule”), or proprietary accounts of broker-dealers, (ii) funds on deposit for Canadian and European trade clearing and settlement activity, (iii) segregated balances under a collateral account control agreement for the benefit of certain customers in Hong Kong, and (iv) funds relating to the securitization of bank guarantees supporting certain of the Company’s foreign leases.

Securities Borrowed and Securities Loaned

The Company conducts securities borrowing and lending activities with external counterparties. In connection with these transactions, the Company receives or posts collateral, which comprises cash and/or securities. In accordance with substantially all of its stock borrow agreements, the Company is permitted to sell or repledge the securities received. Securities borrowed or loaned are recorded based on the amount of cash collateral advanced or received. The initial cash collateral advanced or received generally approximates or is greater than 102% of the fair value of the underlying securities borrowed or loaned. The Company monitors the fair value of securities borrowed and loaned, and delivers or obtains additional collateral as appropriate. Receivables and payables with the same counterparty are not offset in the Consolidated Statements of Financial Condition. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under Interest and dividends income or Interest and dividends expense in the Consolidated Statements of Comprehensive Income.

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

In a repurchase agreement, securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at contract value, plus accrued interest, which approximates fair value. It is the Company's policy that its custodian take possession of the underlying collateral securities with a fair value approximately equal to the principal amount of the repurchase transaction, including accrued interest. For reverse repurchase agreements, the Company typically requires delivery of collateral with a fair value approximately equal to the carrying value of the relevant assets in the Consolidated Statements of Financial Condition. To ensure that the fair value of the underlying collateral remains sufficient, the collateral is valued daily with additional collateral obtained or excess collateral returned, as permitted under contractual provisions. The Company does not net securities purchased under agreements to resell transactions with securities sold under agreements to repurchase transactions entered into with the same counterparty.

The Company has entered into bilateral and tri-party term and overnight repurchase and other collateralized financing agreements which bear interest at negotiated rates. The Company receives cash and makes delivery of financial instruments to a custodian who monitors the market value of these instruments on a daily basis. The market value of the instruments delivered must be equal to or in excess of the principal amount loaned under the repurchase agreements plus the agreed upon margin requirement. The custodian may request additional collateral, if appropriate. Interest received or paid by the Company for these transactions is recorded gross on an accrual basis under Interest and dividends income or Interest and dividends expense in the Consolidated Statements of Comprehensive Income.

Receivables from/Payables to Broker-dealers and Clearing Organizations

Receivables from and payables to broker-dealers and clearing organizations primarily represent amounts due for unsettled trades, open equity in futures transactions, securities failed to deliver or failed to receive, deposits with clearing organizations or exchanges, and balances due from or due to prime brokers in relation to the Company’s trading. Amounts receivable from broker-dealers and clearing organizations may be restricted to the extent that they serve as deposits for securities sold, not yet purchased. The Company presents its balances, including outstanding principal balances on all broker credit facilities, on a net-by-counterparty basis within receivables from and payables to broker-dealers and clearing organizations when the criteria for offsetting are met.

In the normal course of business, a significant portion of the Company’s securities transactions, money balances, and security positions are transacted with several third-party brokers. The Company is subject to credit risk to the extent any broker

with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Company monitors the financial condition of such brokers and to minimize the risk of any losses from these counterparties.

Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased

Financial instruments owned and Financial instruments sold, not yet purchased relate to market making and trading activities, and include listed and other equity securities, listed equity options and fixed income securities.

The Company records Financial instruments owned, Financial instruments owned and pledged, and Financial instruments sold, not yet purchased at fair value. Gains and losses arising from financial instrument transactions are recorded net on a trade-date basis in Trading income, net, in the Consolidated statements of comprehensive income.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The recognition of “block discounts” for large holdings of unrestricted financial instruments where quoted prices are readily and regularly available in an active market is prohibited. The Company categorizes its financial instruments into a three level hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each financial instrument is based on the assessment of the transparency and reliability of the inputs used in the valuation of such financial instruments at the measurement date based on the lowest level of input that is significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements).

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or

Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred.

Fair Value Option

The fair value option election allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are recorded in other, net in the consolidated Statements of Comprehensive Income. The decision to elect the fair value option is determined on an instrument by instrument basis, which must be applied to an entire instrument and is irrevocable once elected.

Derivative Instruments

Derivative instruments are used for trading purposes, including economic hedges of trading instruments, are carried at fair value, and include futures, forward contracts, and options. Gains or losses on these derivative instruments are recognized currently within Trading income, net in the Consolidated Statement of Comprehensive Income. Fair values for exchange-traded derivatives, principally futures, are based on quoted market prices. Fair values for over-the-counter derivative instruments, principally forward contracts, are based on the values of the underlying financial instruments within the contract. The underlying instruments are currencies, which are actively traded. The Company presents its derivatives balances on a net-by-counterparty basis when the criteria for offsetting are met. Cash flows associated with such derivative activities are included in cash flows from operating activities on the consolidated statements of cash flows.

Client Commission Arrangements

Institutional customers are permitted to allocate a portion of their gross commissions to pay for research products and other services provided by third parties and the Company’s subsidiaries. The amounts allocated for those purposes are commonly referred to as client commission arrangements. The cost of independent research and directed brokerage arrangements is accounted for on an accrual basis. Commission revenue is recorded when earned on a trade date basis. Payments relating to client commission arrangements are netted against the commission revenues. Research receivable, including prepaid research on behalf of customers and balance transfers due from other broker‑dealers, net of an allowance is included in Receivables from customers and Receivables from broker-dealers and clearing organizations, while accrued research payable is included in Accounts payable, accrued expenses, and other liabilities in the Consolidated Statements of Financial Condition.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation, except for the assets acquired in connection with acquisitions using the purchase accounting method, which were recorded at fair value on the respective date of acquisitions. Depreciation is provided using the straight-line method over estimated useful lives of the underlying assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that appreciably extend the useful life of the assets are capitalized. When property and equipment are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. Furniture, fixtures, and equipment are depreciated over three to seven years. Leasehold improvements are amortized over the lesser of the life of the improvement or the term of the lease.

Capitalized Software

The Company capitalizes costs of materials, consultants, and payroll and payroll related costs for employees incurred in developing internal-use software and software to be sold, leased, or marketed. Costs incurred during the preliminary project and post-implementation stages are charged to expense.

Management’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized.

Capitalized software development costs and related accumulated amortization are included in Property, equipment and capitalized software in the accompanying Consolidated Statements of Financial Condition and are amortized over a period of 1.5 to 3 years, which represents the estimated useful lives of the underlying software.

Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. Operating leases are included in Operating lease right-of use assets and Operating lease liabilities on the Consolidated Statements of Financial Condition. Operating lease right-of-use (“ROU”) assets are assets that represent the lessee’s right to use, or control the use of, a specified asset for the lease term. Finance leases consist primarily of leases for technology and equipment and are included in Property, equipment, and capitalized software and Accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The ROU assets are reduced by lease incentives and initial direct costs incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases and amortization of the finance lease ROU asset is recognized on a straight-line basis over the lease term. Certain of the Company's lease agreements contain fixed lease payments that contain lease and non-lease components; for such leases, the Company accounts for the lease and non-lease components as a single lease component.

Goodwill

Goodwill represents the excess of the purchase price over the underlying net tangible and intangible assets of the Company’s acquisitions. Goodwill is not amortized but is assessed for impairment on an annual basis and between annual assessments whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is assessed at the reporting unit level, which is defined as an operating segment or one level below the operating segment.

The Company assesses goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events occur or certain circumstances exist. In the impairment assessment as of July 1, 2019, the Company assessed qualitative factors as described in ASC 350-20 for each of its reporting units for any indicators that the fair values of the reporting units were less than their carrying values. No impairment was identified.

Intangible Assets

The Company amortizes finite-lived intangible assets over their estimated useful lives. Finite-lived intangible assets are tested for impairment when impairment indicators are present, and if impaired, they are written down to fair value.

Exchange Memberships and Stock

Exchange memberships are recorded at cost or, if any other than temporary impairment in value has occurred, at a value that reflects management’s estimate of fair value. Exchange memberships acquired in connection with the Acquisition of KCG and the ITG Acquisition were recorded at their fair values on the dates of acquisition. Exchange stock includes shares that entitle the Company to certain trading privileges. The Company’s exchange memberships and stock are included in Intangibles in the Consolidated Statements of Financial Condition.

Trading Income, net

Trading income, net is comprised of changes in the fair value of trading assets and liabilities (i.e., unrealized gains and losses) and realized gains and losses on trading assets and liabilities. Trading gains and losses on financial instruments owned and financial instruments sold, not yet purchased are recorded on the trade date and reported on a net basis in the Consolidated Statements of Comprehensive Income.

Commissions, net and Technology Services

Commissions, net, which primarily comprise commissions and commission equivalents earned on institutional client orders, are recorded on a trade date basis. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. The Company recognizes the related revenue when the third party research services are rendered and payments are made. As the Company acts as an agent in these transactions, it records such expenses on a net basis within Commissions, net and technology services in the Consolidated Statements of Comprehensive Income.

Technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees, as well as, in certain cases, contingent fees based on client revenues, which represent variable consideration. The services offered under these contracts have the same pattern of transfer; accordingly, they are being measured and recognized as a single performance obligation. The performance obligation is satisfied over time, and accordingly, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis.

The Company provides order management software (“OMS”) and related software products and connectivity services to customers and recognizes license fee revenues and monthly connectivity fees. License fee revenues, generated for the use of the Company’s OMS and other software products, is fixed and recognized at the point in time at which the customer is able to use and benefit from the license. Connectivity revenue is variable in nature, based on the number of live connections, and is recognized over time on a monthly basis using a time-based measure of progress.

The Company also provides analytics products and services to customers and recognizes subscription fees, which are fixed for the contract term, based on when the products and services are delivered. Analytics products and services may be bundled with trade execution services, in which case commissions are allocated to the analytics performance obligations using an allocation methodology.

Interest and Dividends Income/Interest and Dividends Expense

Interest income and interest expense are accrued in accordance with contractual rates. Interest income consists of interest earned on collateralized financing arrangements and on cash held by brokers. Interest expense includes interest expense from collateralized transactions, margin and related lines of credit. Dividends on financial instruments owned including those pledged as collateral and financial instruments sold, not yet purchased are recorded on the ex-dividend date and interest is recognized on an accrual basis.

Brokerage, Exchange and Clearance Fees, Net

Brokerage, exchange and clearance fees, net, comprise the costs of executing and clearing trades and are recorded on a trade date basis. Rebates consist of volume discounts, credits or payments received from exchanges or other market places related to the placement and/or removal of liquidity from the order flow in the marketplace. Rebates are recorded on an accrual basis and included net within brokerage, exchange and clearance fees in the accompanying Consolidated Statements of Comprehensive Income.

Payments for Order Flow

Payments for order flow represent payments to broker-dealer clients, in the normal course of business, for directing their order flow in U.S. equities to the Company. Payments for order flow are recorded on a trade-date basis in the Consolidated Statements of Comprehensive Income.

Income Taxes

The Company is subject to U.S. federal, state and local income taxes on its taxable income. The Company's subsidiaries are subject to income taxes in the respective jurisdictions (including foreign jurisdictions) in which they operate.

The provision for income tax is comprised of current tax and deferred tax. Current tax represents the tax on current year tax returns, using tax rates enacted at the balance sheet date. The deferred tax assets are recognized in full and then reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be recognized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the applicable taxing authority, including resolution of the appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit for each such position that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Many factors are considered when evaluating and estimating the tax positions and tax benefits. Such estimates involve interpretations of regulations, rulings, case law, etc. and are inherently complex. The Company’s estimates may require periodic adjustments and may not accurately anticipate actual outcomes as resolution of income tax treatments in individual jurisdictions typically would not be known for several years after completion of any fiscal year.

Comprehensive Income and Foreign Currency Translation

Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Company’s OCI is comprised of foreign currency translation adjustments. Assets and liabilities of operations having non-U.S. dollar functional currencies are translated at period-end exchange rates, and revenues and expenses are translated at weighted average exchange rates for the period. Gains and losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in Accumulated other comprehensive income, a separate component of stockholders’ equity.

The Company's foreign subsidiaries generally use the U.S. dollar as their functional currency. The Company also has subsidiaries that utilize a functional currency other than the U.S. dollar, primarily comprising its subsidiaries domiciled in Ireland, which utilize the Euro and Pound Sterling as the functional currency, and subsidiaries domiciled in Canada, which utilize the Canadian dollar as the functional currency.

The Company may seek to reduce the impact of fluctuations in foreign exchange rates on its net investment in certain non-U.S. operations through the use of foreign currency forward contracts. For foreign currency forward contracts designated as hedges, the Company assesses its risk management objectives 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. The effectiveness of the hedge is assessed based on the overall changes in the fair value of the forward contracts. For qualifying net investment hedges, any gains or losses, to the extent effective, are included in Accumulated other comprehensive income on the Consolidated Statements of Financial Condition and Cumulative translation adjustment, net of tax, on the Consolidated Statements of Comprehensive Income. The ineffective portion, if any, is recorded in Other, net on the consolidated statements of operations.

Share-Based Compensation

Share-based awards issued for compensation in connection with or subsequent to the Company's initial public offering in April 2015 (the “IPO”) and certain reorganization transactions consummated in connection with the IPO (the “Reorganization Transactions”) pursuant to the Virtu Financial, Inc. 2015 Management Incentive Plan (as amended, the “Amended and Restated 2015 Management Incentive Plan”) and pursuant to the Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan, dated as of June 8, 2017 (the “Amended and Restated ITG 2007 Equity Plan”), were in the form of stock options, Class A common stock, par value $0.00001 per share (the “Class A Common Stock”) and RSUs, as applicable. The fair value of the stock option grants is determined through the application of the Black-Scholes-Merton model. The fair value of the Class A Common Stock and RSUs are determined based on the volume weighted average price for the three days preceding the grant, and with respect to the RSUs, a projected annual forfeiture rate. The fair value of share-based awards granted to employees is expensed based on the vesting conditions and are recognized on a straight-line basis over the vesting period. The Company records as treasury stock shares repurchased from its employees for the purpose of settling tax liabilities incurred upon the issuance of Class A Common Stock, the vesting of RSUs or the exercise of stock options.

Variable Interest Entities

A variable interest entity (“VIE”) is an entity that lacks one or more of the following characteristics: (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity.

The Company will be considered to have a controlling financial interest and will consolidate a VIE if it has both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In October 2016, the Company invested in a joint venture (“JV”) with nine other parties. One of the parties was KCG. Upon the Acquisition of KCG, KCG was required to relinquish its ownership in the JV. As of December 31, 2019, each of the parties owns approximately 10% of the voting shares and 10% of the equity of this JV.

As a result of the Acquisition of KCG, the Company owns 50% of the voting shares and 50% of the equity of another JV. These two JVs build and maintain microwave communication networks in the U.S., Europe, and Asia. The Company and its JV partners each pay monthly fees for the use of the microwave communication networks in connection with their respective trading activities, and the JVs may sell excess bandwidth that is not utilized by the JV members to third parties.

The Company has an interest in a JV that offers derivatives trading technology and execution services to broker-dealers, professional traders and select hedge funds. As of December 31, 2019, the Company held approximately a 10% indirect minority stake in this JV.

The Company has an interest in a JV that is developing a member-owned equities exchange with the goal of increasing competition and transparency, while reducing fixed costs and simplifying execution of equity trading in the US. As of December 31, 2019, the Company held approximately a 21.4% stake in this JV.

The Company's four JVs meet the criteria to be considered VIEs. In each of the JVs, the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; therefore it does not have a controlling financial interest in and does not consolidate the JVs. The Company records its interest in each JV under the equity method of accounting and records its investment in the JVs within Other assets and its amounts payable for communication services provided by the JV within Accounts payable, accrued expenses and other liabilities on the

Consolidated Statements of Financial Condition. The Company records its pro-rata share of each JV's earnings or losses within Other, net and fees related to the use of communication services provided by the JVs within Communications and data processing on the Consolidated Statements of Comprehensive Income.

The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV.

The following table presents the Company’s nonconsolidated VIEs at December 31, 2019:



	Carrying Amount				Maximum Exposure to Loss		VIEs' assets
(in thousands)	Asset		Liability		Maximum Exposure to Loss		VIEs' assets
Equity investment	$	28,579	$	—	$	28,579	$	119,051

The following table presents the Company’s nonconsolidated VIEs at December 31, 2018:



	Carrying Amount				Maximum Exposure to Loss		VIEs' assets
(in thousands)	Asset		Liability		Maximum Exposure to Loss		VIEs' assets
Equity investment	$	18,254	$	—	$	18,254	$	49,450

Accounting Pronouncements, Recently Adopted

Revenue Recognition - In May 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. For a discussion of the impact of the standard on the Company’s revenues as well as the additional disclosures required by the new standard, see Note 13 “Revenues from Contracts with Customers”.

Leases — In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new ASU, a lessee is required to recognize assets and liabilities for leases with lease terms of more than 12 months. The liability is equal to the present value of the future lease payments. The ROU asset is based on the liability, subject to adjustment, such as for initial direct costs. For statement of comprehensive income purposes, leases are classified as either operating or finance. Operating leases result in straight-line expense (similar to previous operating lease guidance) while finance leases result in a front-loaded expense pattern (similar to previous capital lease guidance). Classification is based on criteria that are largely similar to those applied in previous lease accounting, but without explicit bright lines.

The Company adopted this ASU on January 1, 2019 using the modified retrospective method of implementation. The Company elected to recognize the cumulative effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The Company elected not to recognize lease assets and lease liabilities for leases with a determined lease term of twelve months or less that are not expected to be renewed. The Company elected several practical expedients upon transition, including the expedient not to re-assess the lease population as long as contracts were properly scoped as a lease under previous guidance, not to re-assess existing lease classification for existing leases, not to adjust existing costs that were capitalized, and not to separate lease and non-lease components of fixed lease payments.

The standard had a material impact on the Company's Consolidated Statements of Financial Condition due to the recognition of ROU assets and lease liabilities for operating leases, while the Company's accounting for finance leases remained substantially unchanged. The standard had an immaterial impact on the Consolidated Statements of Comprehensive Income. The additional disclosures required by the new standard have been included in Note 16 “Leases”.

Stock Compensation - In June 2018, the FASB issued ASU 2018-07, Compensation, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, with the objective of conforming the accounting for share-based awards to non-employees to the accounting for awards granted to employees. Previously, non-employee awards were measured at the vesting date, rather than the grant date, which effectively required the awards to be marked to market until the

award vested. Under the new ASU, companies are required to measure non-employee awards at the fair value of the instruments issued at the grant date. Entities can also consider the probability of the recipient satisfying any performance conditions. The Company adopted this standard on January 1, 2019. The Company has not granted share-based awards to non-employees, and the adoption of this ASU did not have a material impact on its consolidated financial statements.

Goodwill - In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, this ASU eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This ASU is effective for public entities in fiscal years beginning after December 15, 2019. The Company early adopted this standard as of January 1, 2019, and the adoption of this ASU did not have a material impact on its consolidated financial statements.

Accounting Pronouncements, Not Yet Adopted as of December 31, 2019

Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modified the disclosure requirements on fair value measurements in ASC Topic 820, Fair Value Measurement. Disclosure requirements were eliminated for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. Disclosure requirements were modified for liquidation of investments in certain entities that calculate net asset value, and for measurement uncertainty disclosures. Disclosure requirements were added for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for periods beginning after December 15, 2019, including interim periods within that fiscal year. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Consolidation - In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, which modified how VIEs are assessed for consolidation purposes under ASC Topic 810, Consolidation. Under the update, indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The ASU is effective for periods beginning after December 15, 2019, including interim periods within that fiscal year. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Measurement of Credit Losses on Financial Instruments - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) -Measurement of Credit Losses on Financial Instruments. This ASU amends several aspects of the measurement of credit losses on financial instruments, including replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses model (“CECL”). Under CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses over the remaining expected life of the financial assets. Expected credit losses for newly recognized financial assets, as well as changes to expected credit losses during the period, would be recognized in earnings, and adoption of the ASU will generally result in earlier recognition of credit losses. Expected credit losses will be measured based on historical experience, current conditions and forecasts that affect the collectability of the reported amount, and credit losses will be generally recognized earlier than under current U.S. GAAP. In June 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which provides entities with an option to irrevocably elect the fair value option on an instrument-by-instrument basis for certain instruments upon adoption of the new Credit Losses standard. The ASUs are effective for periods beginning after December 15, 2019, including interim periods within that fiscal year.

The Company has undertaken a process of identifying and developing the changes to the Company’s existing models and processes that will be required under CECL. As of December 31 2019, the ASU is expected to impact only those financial instruments that are carried by the Company at amortized cost such as collateralized financing arrangements (repurchase agreements and securities borrowing/ lending transactions) and receivables from customers, broker-dealers and clearing

organizations. The Company has performed a qualitative and quantitative analysis of these financial instruments, including historical loss rates and time to maturity, and as a result of its analysis, has determined that there will not be a material impact to its financial condition, results of operations and cash flows.

Income Taxes - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income tax accounting, and introducing other changes that touch on a variety of topics within income tax accounting. The ASUs are effective for periods beginning after December 15, 2020, including interim periods within that fiscal year. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

ITG Acquisition

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

ITG Acquisition

Background

On the ITG Closing Date, the Company completed the ITG Acquisition. In connection with the ITG Acquisition, Virtu Financial, VFH Parent LLC, a Delaware limited liability company and a subsidiary of Virtu Financial (“VFH”) and Impala Borrower LLC (the “Acquisition Borrower”), a subsidiary of the Company, entered into a Credit Agreement dated as of March 1, 2019 (as amended from time to time, the “Credit Agreement”), with the lenders party thereto, Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint lead arrangers and joint bookrunners. The Credit Agreement provided (i) a senior secured first lien term loan in an aggregate principal amount of $1,500.0 million, drawn in its entirety on the ITG Closing Date, with approximately $404.5 million borrowed by VFH to repay all amounts outstanding under its existing term loan facility and the remaining approximately $1,095.0 million borrowed by the Acquisition Borrower to finance the consideration and fees and expenses paid in connection with the ITG Acquisition, and (ii) a $50.0 million senior secured first lien revolving facility to VFH, with a $5.0 million letter of credit subfacility and a $5.0 million swingline subfacility. After the closing of the ITG Acquisition, VFH assumed the obligations of the Acquisition Borrower in respect of the acquisition term loans. Additionally, on the ITG Closing Date, the Company’s fourth amended and restated credit agreement (as amended on January 2, 2018 and September 19, 2018, the “Fourth Amended and Restated Credit Agreement”) with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, sole lead arranger and bookrunner, was terminated.

As described in Note 10 “Borrowings”, the Credit Agreement was amended on October 9, 2019, on which date VFH borrowed and additional $525.0 million of incremental first lien term loans, the proceeds of which were used together with cash on hand to redeem the Notes (as defined below). The Indenture (as defined below) was fully terminated following such redemption.

Accounting treatment of the ITG Acquisition

The ITG Acquisition has been accounted for as a business combination pursuant to ASC 805, Business Combinations by the Company using the acquisition method of accounting. Under the acquisition method, the assets and liabilities of ITG, as of the ITG Closing Date, were recorded at their respective fair values and added to the carrying value of the Company's existing assets and liabilities. The reported financial condition and results of operations of the Company for the periods following the ITG Closing Date reflect ITG's and the Company's balances and reflect the impact of purchase accounting adjustments. As the Company is the accounting acquirer, the financial results for the year ended December 31, 2019 comprise the results of the Company for the entire applicable period and the results of ITG from the ITG Closing Date through December 31, 2019. All periods prior to the ITG Closing Date comprise solely the results of the Company.

Certain former ITG management employees were terminated upon the ITG Acquisition, and as a result were paid an aggregate of $17.6 million pursuant to their existing employment contracts and arrangements. This amount has been recognized as an expense by the Company and is included in Employee compensation and payroll taxes in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2019.

Purchase price and goodwill

The aggregate cash purchase price of $1.0 billion was determined as the sum of the fair value, at $30.30 per share, of ITG shares outstanding held by former ITG stockholders at closing and the fair value of certain ITG employee stock-based awards that were outstanding, and which vested at the ITG Closing Date.

The purchase price has been allocated to the assets acquired and liabilities assumed using their estimated fair values at the ITG Closing Date. As of December 31, 2019, the Company has completed its analysis to finalize the allocation of the

purchase price to the ITG acquired assets and liabilities. The Company engaged third party specialists for the purchase price allocation.

The amounts in the table below represent the allocation of the purchase price and are subject to revision during the remainder of the measurement period, a period not to exceed twelve months from the ITG Closing Date. Adjustments to the provisional fair values of Intangible assets, Deferred tax assets, Operating lease right-of-use assets, Other assets, Accounts Payable and accrued expenses and other liabilities, Operating lease liabilities, and Deferred tax liabilities were recorded during the period from the ITG Closing Date through December 31, 2019. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the ITG Closing Date:



(in thousands)	March 1, 2019		Measurement Period			December 31, 2019
Cash and equivalents	$	197,072	$	—		$	197,072
Cash and securities segregated under federal regulations	14,232		—			14,232
Securities borrowed	13,182		—			13,182
Receivables from broker dealers and clearing organizations	328,112		—			328,112
Financial instruments owned, at fair value	523		—			523
Receivables from customers	122,697		—			122,697
Property, equipment and capitalized software (net)	46,408		—			46,408
Intangibles	479,600		37,600			517,200
Deferred tax assets	17,221		384			17,605
Operating lease right-of-use assets	87,236		13,049			100,285
Other assets	31,653		(1		)	31,652
Total Assets	1,337,936		51,032			1,388,968

Short-term borrowings	18,651		—			18,651
Securities loaned	17,663		—			17,663
Payables to broker dealers and clearing organizations	152,043		—			152,043
Payables to customers	116,419		—			116,419
Financial instruments sold, not yet purchased, at fair value	11		—			11
Accounts payable and accrued expenses and other liabilities	172,727		6,166			178,893
Operating lease liabilities	104,983		(5,290		)	99,693
Deferred tax liabilities	65,888		5,165			71,053
Total Liabilities	648,385		6,041			654,426

Total identified assets acquired, net of assumed liabilities	689,551		44,991			734,542

Goodwill	357,334		(44,991		)	312,343

Total Purchase Price	$	1,046,885	$	—		$	1,046,885

Amounts allocated to intangible assets, the amortization period and goodwill were as follows:



(in thousands)	Amount		Amortization Years
Technology	$	76,000	5
Customer relationships	437,600		10
Trade names	3,600		3
Intangible assets	517,200
Goodwill	312,343
Total	$	829,543

The Company estimated the fair value of the intangible assets, which involved the use of significant estimates and assumptions with respect to the timing and amounts of revenue growth rates, customer attrition rates, future tax rates, royalty rates, contributory asset charges, discount rate and the resulting cash flows. The total Goodwill of $312.3 million has been assigned to the Execution Services segment. Such goodwill is attributable to the expansion of product offerings and expected synergies of the combined workforce, products and technologies of the Company and ITG.

Assumption of Equity Compensation Plan

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and certain stock option awards, restricted stock unit awards, deferred stock unit awards and performance stock unit awards granted under the Amended and Restated ITG 2007 Equity Plan (the “Assumed Awards”). The Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the Agreement and Plan of Merger by and between the Company, Impala Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of the Company, and ITG, dated as of November 6, 2018, the “ITG Merger Agreement”) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance-based vesting conditions. As of the ITG Closing Date, the aggregate number of shares of Class A Common Stock subject to such Assumed Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan was 1,230,406. The Company filed with the SEC a Registration Statement on Form S-8 on the ITG Closing Date to register such shares of Class A Common Stock.

Tax treatment of the ITG Acquisition

The ITG Acquisition will be treated as a tax-free transaction as described in Section 351 of the Internal Revenue Code. ITG’s tax basis in its assets and liabilities therefore generally carried over to the Company following the ITG Acquisition. None of the goodwill is expected to be deductible for tax purposes.

The Company recorded deferred tax assets of $17.6 million and deferred tax liabilities of $71.1 million with respect to recording ITG’s assets and liabilities under the purchase method of accounting as described above as well as recording the value of other tax attributes acquired as a result of the ITG Acquisition, as described in Note 14 “Income Taxes”.

Pro forma results

Included in the Company’s results for the year ended December 31, 2019 are results from the business acquired as a result of the ITG Acquisition, from the ITG Closing Date through December 31, 2019 as follows:




(in thousands)
Revenues	$	347,859
Income (loss) before income taxes	(64,917		)

The financial information in the table below summarizes the combined pro forma results of operations of the Company and ITG, based on adding the pre-tax historical results of ITG and the Company, and adjusting primarily for amortization of intangibles created in the ITG Acquisition, debt raised in conjunction with the ITG Acquisition and

nonrecurring costs associated with the ITG Acquisition, which comprise advisory and other professional fees incurred by the Company and ITG of $15.1 million and $18.2 million, respectively. The pro forma data assumes all of ITG’s issued and outstanding shares of common stock, par value $0.01 per share, were cancelled and extinguished and converted into the right to receive $30.30 in cash, without interest, less any applicable withholding taxes on January 1, 2018 and does not include adjustments to reflect the Company's operating costs or expected differences in the way funds generated by the Company are invested.

This pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information, including, without limitation, preliminary purchase accounting adjustments. The pro forma financial information does not reflect any synergies or operating cost reductions that may be achieved from the combined operations. The pro forma financial information combines the historical results for the Company and ITG for the years ended December 31, 2019 and 2018:



	For the Year Ended December 31,
(in thousands)	2019			2018
Revenue	$	1,605,340		$	2,388,194

Net income (loss)	(94,233		)	514,821

Net income (loss) available for common stockholders	(53,243		)	240,265

Sale of BondPoint

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Sale of BondPoint

In October 2017, the Company entered into an Asset Purchase Agreement with Intercontinental Exchange (“ICE”) pursuant to which the Company has agreed to sell specified assets and to assign specified liabilities constituting its BondPoint division and fixed income venue (“BondPoint”). BondPoint is a provider of electronic fixed income trading solutions for the buy-side and sell-side offering access to centralized liquidity and automated trade execution services.

On January 2, 2018, the Company completed the sale of BondPoint to ICE for total gross proceeds of $400.2 million in cash. The Company incurred one-time transaction costs of $8.5 million, which included professional fees of $7.1 million related to the sale and $1.4 million of compensation expense, which is recorded in Transaction advisory fees and expenses and Employee compensation and payroll taxes, respectively, on the Consolidated Statement of Comprehensive Income. The Company recognized a gain on sale of $337.6 million, which is recorded in Other, net on the Consolidated Statement of Comprehensive Income for the year ended December 31, 2018.

A summary of the carrying value of BondPoint and gain on sale of BondPoint is as follows:



(in thousands)
Total sale proceeds received	$	400,192
Business assets and liabilities held for sale as of December 31, 2017:
Receivables from broker dealers and clearing organizations	3,383
Intangibles and other assets	51,687
Liabilities	(728		)
Total carrying value of BondPoint as of December 31, 2017:	54,342
Goodwill adjustment allocated to BondPoint	8,300
Gain on sale of BondPoint	337,550
Transaction costs	8,568
Gain on sale of BondPoint, net of transaction costs	$	328,982

Earnings per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings per Share

The below table contains a reconciliation of net income (loss) before noncontrolling interest to net income (loss) available for common stockholders:



	Years Ended December 31,
(in thousands)	2019			2018			2017
Income (loss) before income taxes and noncontrolling interest	$	(115,982	)	$	696,363		$	113,164
Provision for (benefit from) income taxes	(12,277		)	76,171			94,266
Net income (loss)	(103,705		)	620,192			18,898

Noncontrolling interest	45,110			(330,751		)	(15,959		)

Net income (loss) available for common stockholders	$	(58,595	)	$	289,441		$	2,939

The calculation of basic and diluted earnings per share is presented below:



	Years Ended December 31,
(in thousands, except for share or per share data)	2019			2018			2017
Basic earnings (loss) per share:
Net income (loss) available for common stockholders	$	(58,595	)	$	289,441		$	2,939
Less: Dividends and undistributed earnings allocated to participating securities	(1,926		)	(5,418		)	(1,326		)
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities	(60,521		)	284,023			1,613

Weighted average shares of common stock outstanding:
Class A	113,918,103			100,875,793			62,579,147

Basic earnings (loss) per share	$	(0.53	)	$	2.82		$	0.03



	Years Ended December 31,
(in thousands, except for share or per share data)	2019			2018		2017
Diluted earnings (loss) per share:
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities	$	(60,521	)	$	284,023	$	1,613

Weighted average shares of common stock outstanding:
Class A
Issued and outstanding	113,918,103			100,875,793		62,579,147
Issuable pursuant to Amended and Restated 2015 Management Incentive Plan (1)	—			1,213,346		—
	113,918,103			102,089,139		62,579,147

Diluted earnings (loss) per share	$	(0.53	)	$	2.78	$	0.03

(1)

The dilutive impact excludes from the computation of earnings (loss) per share 377,677 unexercised stock options and 440,335 restricted stock units issuable pursuant to Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan for the year ended December 31, 2019, and 1,740,630 options for the year ended December 31, 2017, because the inclusion of these instruments would have been anti-dilutive.

Tax Receivable Agreements	12 Months Ended
Tax Receivable Agreements	Dec. 31, 2019
Tax Receivable Agreements [Abstract]
Tax Receivable Agreements	Tax Receivable Agreements In connection with the IPO and the Reorganization Transactions, the Company entered into tax receivable agreements to make payments to certain pre-IPO equity holders (“Virtu Members”) that are generally equal to 85% of the applicable cash tax savings, if any, that the Company actually realizes as a result of favorable tax attributes that were and will continue to be available to the Company as a result of the Reorganization Transactions, exchanges of membership interests for Class A Common Stock or Class B common stock, par value $0.00001 per share (the “Class B Common Stock”), (an “Exchange”), and payments made under the tax receivable agreements. An Exchange during the year will give rise to favorable tax attributes that may generate cash tax savings specific to the Exchange to be realized over a specific period of time (generally 15 years). At each Exchange, management estimates the Company’s cumulative TRA obligations to be reported on the consolidated financial statements, which amounted to $269.3 million as of December 31, 2019. The tax attributes are computed as the difference between the Company's basis in the partnership interest (“outside basis”) as compared to the Company’s share of the adjusted tax basis of partnership property (“inside basis”) at the time of each Exchange. The computation of inside basis requires management to make judgments in estimating the components included in the inside basis as of the date of the Exchange (i.e., cash received by the Company on hypothetical sale of assets, allocation of gain/loss to the Company at the time of the Exchange taking into account complex partnership tax rules). In addition, management estimates the period of time that may generate cash tax savings of such tax attributes and the realizability of the tax attributes. Payments will occur only after the filing of the U.S. federal and state income tax returns and realization of the cash tax savings from the favorable tax attributes. The Company made its first payment of $7.0 million in February 2017 and its second payment of $12.4 million in September 2018. As a result of (i) the purchase of equity interests in Virtu Financial from certain Virtu Members in connection with the Reorganization Transactions, (ii) the purchase of non-voting common interest units in Virtu Financial (the “Virtu Financial Units”) (along with the corresponding shares of Class C common stock, par value $0.00001 per share (the “Class C Common Stock”)) from certain of the Virtu Members in connection with the IPO, (iii) the purchase of Virtu Financial Units (along with the corresponding shares of Class C Common Stock) and the exchange of Virtu Financial Units (along with the corresponding shares of Class C Common Stock) for shares of Class A Common Stock in connection with the secondary offerings completed in November 2015 (the “November 2015 Secondary Offering”) and September 2016 (the “September 2016 Secondary Offering”), and (iv) the purchase of Virtu Financial Units (along with corresponding shares of the Company’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”) in connection with the May 2018 Secondary Offering (defined below) and the May 2019 Secondary Offering (defined below, and, together with the November 2015 Secondary Offering, the September 2016 Secondary Offering, and the May 2018 Secondary Offering, the “Secondary Offerings”), payments to certain Virtu Members in respect of the purchases are expected to range from approximately $3.3 million to $20.7 million per year over the next 15 years. In connection with the employee exchanges and May 2018 Secondary Offering between the Company and TJMT Holdings LLC and the other selling stockholders, both as described in Note 18 “Capital Structure”, the Company recorded an additional deferred tax asset of $78.7 million and a payment liability pursuant to the tax receivable agreements of $79.7 million, with the $1.0 million difference recorded as a decrease to additional paid-in capital. In connection with the employee exchanges and May 2019 Secondary Offering between the Company and TJMT Holdings LLC and the other selling stockholders, both as described in Note 18 “Capital Structure”, the Company recorded an additional deferred tax asset of $49.1 million and payment liability pursuant to the tax receivable agreements of $54.9 million, with the $5.8 million difference recorded as a decrease to additional paid-in capital. As a result of the reduction in the U.S. corporate income tax rate as further described in Note 14 “Income Taxes”, the aforementioned deferred tax asset and related payment liability were subsequently reduced, and the Company recorded a reduction of its tax receivable agreement obligation of $86.6 million due to the change in the corporate income tax rate. At December 31, 2019 and December 31, 2018, the Company’s remaining deferred tax assets that relate to the matters described above were approximately $197.6 million and $167.1 million, respectively, and the Company’s liabilities over the next 15 years pursuant to the tax receivable agreements were approximately $269.3 million and $214.4 million, respectively. The amounts recorded as of December 31, 2019 are based on best estimates available at the respective dates and may be subject to change after the filing of the Company’s U.S. federal and state income tax returns for the years in which tax savings were realized. For the tax receivable agreements discussed above, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been (i) no increase to the tax basis of the assets of Virtu Financial as a result of the purchase or exchange of Virtu Financial Units, (ii) no tax benefit from the tax basis in the intangible assets of Virtu Financial on the date of the IPO and (iii) no tax benefit as a result of the Net Operating Losses (“NOLs”) and other tax attributes of Virtu Financial. Subsequent adjustments of the tax receivable agreements obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within income before taxes and noncontrolling interests in the Consolidated Statements of Comprehensive Income.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

The Company has two operating segments: (i) Market Making; (ii) Execution Services; and one non-operating segment: Corporate. As of December 31, 2019 and December 31, 2018, the Company’s total amount of goodwill recorded was $1,148.9 million and $836.6 million, respectively. The Company recognized $312.3 million of goodwill in connection with the ITG Acquisition, which was recorded in the Execution Services segment. No goodwill impairment was recognized during the years ended December 31, 2019, 2018, and 2017.

The following table presents the details of goodwill by segment:



(in thousands)	Market Making		Execution Services		Corporate		Total
Balance as of December 31, 2018	$	755,292	$	81,291	$	—	$	836,583
Goodwill recognized in ITG Acquisition	—		312,343		—		312,343
Balance as of December 31, 2019	$	755,292	$	393,634	$	—	$	1,148,926

As of December 31, 2019 and December 31, 2018, the Company's total amount of intangible assets recorded was $529.6 million and $84.0 million, respectively. The Company acquired $517.2 million of intangible assets in connection with the ITG Acquisition. Acquired intangible assets consisted of the following as of December 31, 2019 and December 31, 2018:



	As of December 31, 2019
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Useful Lives (Years)
Purchased technology	$	110,000	$	110,000	$	—	1.4	to	2.5
ETF issuer relationships	950		770		180			9
ETF buyer relationships	950		770		180			9
Technology	136,000		58,203		77,797		1	to	6
Customer relationships	486,600		46,456		440,144		10	to	12
Trade name	3,600		1,000		2,600			3
Favorable occupancy leases	5,895		2,040		3,855		3	to	15
Exchange memberships	4,882		—		4,882		Indefinite
	$	748,877	$	219,239	$	529,638



	As of December 31, 2018
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Useful Lives (Years)
Purchased technology	$	110,000	$	110,000	$	—	1.4	to	2.5
ETF issuer relationships	950		665		285			9
ETF buyer relationships	950		665		285			9
Technology	60,000		30,185		29,815		1	to	6
Customer relationships	49,000		5,905		43,095			12
Favorable occupancy leases	5,895		1,224		4,671		3	to	15
Exchange memberships	5,838		—		5,838		Indefinite
	$	232,633	$	148,644	$	83,989

Amortization expense relating to finite-lived intangible assets was approximately $70.6 million, $26.1 million, and $15.4 million for the years ended December 31, 2019, 2018, and 2017, respectively. This is included in Amortization of purchased intangibles and acquired capitalized software in the accompanying Consolidated Statements of Comprehensive Income.

Receivables from/Payables to Broker-Dealers and Clearing Organizations

12 Months Ended

Dec. 31, 2019

Due to and from Broker-Dealers and Clearing Organizations [Abstract]

Receivables from/Payables to Broker-Dealers and Clearing Organizations

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at December 31, 2019 and December 31, 2018:




(in thousands)	December 31, 2019		December 31, 2018
Assets
Due from prime brokers	$	418,059	$	302,152
Deposits with clearing organizations	231,977		84,509
Net equity with futures commission merchants	267,748		294,884
Unsettled trades with clearing organization	214,618		193,544
Securities failed to deliver	178,324		218,663
Commissions and fees	7,858		7,697
Total receivables from broker-dealers and clearing organizations	$	1,318,584	$	1,101,449

Liabilities
Due to prime brokers	$	511,524	$	354,300
Net equity with futures commission merchants	50,950		47,998
Unsettled trades with clearing organization	118,286		90,021
Securities failed to receive	144,494		73,547
Commissions and fees	1,496		1,575
Total payables to broker-dealers and clearing organizations	$	826,750	$	567,441

Included as a deduction from “Due from prime brokers” and “Net equity with futures commission merchants” is the outstanding principal balance on all of the Company’s short-term credit facilities (described in Note 10 “Borrowings”) of approximately $134.3 million and $184.6 million as of December 31, 2019 and December 31, 2018, respectively. The loan proceeds from the credit facilities are available only to meet the initial margin requirements associated with the Company’s ordinary course futures and other trading positions, which are held in the Company’s trading accounts with an affiliate of the respective financial institutions. The credit facilities are fully collateralized by the Company’s trading accounts and deposit accounts with these financial institutions. “Securities failed to deliver” and “Securities failed to receive” include amounts with a clearing organization and other broker-dealers.

Collateralized Transactions

12 Months Ended

Dec. 31, 2019

Collateralized Agreements [Abstract]

Collateralized Transactions

The Company is permitted to sell or repledge securities received as collateral and use these securities to secure repurchase agreements, enter into securities lending transactions or deliver these securities to counterparties or clearing organizations to cover short positions. At December 31, 2019 and December 31, 2018, substantially all of the securities received as collateral have been repledged. The fair value of the collateralized transactions at December 31, 2019 and December 31, 2018 are summarized as follows:



(in thousands)	December 31, 2019		December 31, 2018
Securities received as collateral:
Securities borrowed	$	1,881,005	$	1,361,635
Securities purchased under agreements to resell	142,922		15,475
	$	2,023,927	$	1,377,110

In the normal course of business, the Company pledges qualified securities with clearing organizations to satisfy daily margin and clearing fund requirements.

Financial instruments owned and pledged, where the counterparty has the right to repledge, at December 31, 2019 and December 31, 2018 consisted of the following:



(in thousands)	December 31, 2019		December 31, 2018
Equities	$	654,366	$	748,846
Exchange traded notes	42,590		42,269
	$	696,956	$	791,115

Borrowings

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Borrowings

Broker-Dealer Credit Facilities

The Company is a party to two secured credit facilities with a financial institution to finance overnight securities positions purchased as part of its ordinary course broker-dealer market making activities. One of the facilities (the “Uncommitted Facility”) is provided on an uncommitted basis with an aggregate borrowing limit of $200 million, which was subsequently increased to $300 million in January 2020, and is collateralized by the trading and deposit account of one of the Company’s broker-dealer subsidiaries maintained at the financial institution.

On November 3, 2017, the Company entered into the second credit facility (the “Committed Facility”) with the same financial institution for an aggregate borrowing limit of $500 million. The Committed Facility was subsequently amended and restated March 1, 2019 to increase the borrowing limit to $600 million and to enable a broker-dealer subsidiary of ITG as a borrower thereunder, and amended again on September 23, 2019 to adjust certain sublimits and required minimum total regulatory capital. The Committed Facility consists of two borrowing bases: Borrowing Base A Loan is to be used to finance the purchase and settlement of securities; Borrowing Base B Loan is to be used to fund margin deposit with the National Securities Clearing Corporation. Each of the broker-dealers has a sublimit under Borrowing Base A Loan, from $300 million to $600 million, which bears interest at the adjusted LIBOR or base rate plus 1.25% per annum. Each of the broker-dealers has a sublimit under Borrowing Base B Loan, from $100 million to $150 million, which bears interest at the adjusted LIBOR or base rate plus 2.50% per annum. A commitment fee of 0.50% per annum on the average daily unused portion of this facility is payable quarterly in arrears.

The following summarizes the Company’s broker-dealer credit facilities' carrying values, net of unamortized debt issuance costs, where applicable. These balances are included within Short-term borrowings on the Consolidated Statement of Financial Condition.



	At December 31, 2019
(in thousands)	Interest Rate	Financing Available		Borrowing Outstanding		Deferred Debt Issuance Cost			Outstanding Borrowings, net
Broker-dealer credit facilities:
Uncommitted facility	2.55%	$	200,000	$	30,000	$	(2,100	)	$	27,900
Committed facility	3.01%	600,000		—		—			—
		$	800,000	$	30,000	$	(2,100	)	$	27,900



	At December 31, 2018
(in thousands)	Interest Rate	Financing Available		Borrowing Outstanding		Deferred Debt Issuance Cost			Outstanding Borrowings, net
Broker-dealer credit facilities:
Uncommitted facility	3.40%	$	200,000	$	10,000	$	(832	)	$	9,168
Committed facility	3.75%	500,000		7,000		(1,040		)	5,960
		$	700,000	$	17,000	$	(1,872	)	$	15,128

The following summarizes interest expense for the broker-dealer facilities. Interest expense is included within Interest and dividends expense in the accompanying Consolidated Statements of Comprehensive Income.



	Years Ended December 31,
(in thousands)	2019		2018		2017
Broker-dealer credit facilities:
Uncommitted facility	$	1,591	$	1,794	$	1,667
Committed facility	454		306		52
	$	2,045	$	2,100	$	1,719

Short-Term Bank Loans

The Company’s international securities clearance and settlement activities are funded with operating cash or with short-term bank loans in the form of overdraft facilities. At December 31, 2019, there was $45.6 million outstanding under these facilities at a weighted average interest rate of approximately 4.5% associated with international settlement activities. These short-term bank loan balances are included within Short-term borrowings on the Consolidated Statement of Financial Condition.

Short-Term Credit Facilities

The Company maintains short-term credit facilities with various prime brokers and other financial institutions from which it receives execution or clearing services. The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution.



	At December 31, 2019
	Weighted Average Interest Rate	Financing Available		Borrowing Outstanding
Short-Term Credit Facilities:
Short-term credit facilities (1)	4.22%	$	586,000	$	134,331
		$	586,000	$	134,331



	At December 31, 2018
	Weighted Average Interest Rate	Financing Available		Borrowing Outstanding
Short-Term Credit Facilities:
Short-term credit facilities (1)	5.03%	$	566,000	$	184,608
		$	566,000	$	184,608

(1) Outstanding borrowings are included with Receivables from/ Payables to broker-dealers and clearing organizations within the Consolidated Statements of Financial Condition.

Interest expense in relation to the facilities was approximately $6.6 million, $7.1 million, and $6.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Long-Term Borrowings

The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable:



		At December 31, 2019
(in thousands)	Maturity Date	Interest Rate	Outstanding Principal		Discount			Deferred Debt Issuance Cost			Outstanding Borrowings, net
Long-term borrowings:
First Lien Term Loan Facility	March 2026	5.20%	$	1,925,000	$	(6,795	)	$	(32,513	)	$	1,885,692
SBI bonds	January 2023	5.00%	32,225		—			(51		)	32,174
			$	1,957,225	$	(6,795	)	$	(32,564	)	$	1,917,866



		At December 31, 2018
(in thousands)	Maturity Date	Interest Rate	Outstanding Principal		Discount			Deferred Debt Issuance Cost			Outstanding Borrowings, net
Long-term borrowings:
Fourth Amended and Restated Credit Facility	December 2021	5.55%	$	400,000	$	(332	)	$	(6,704	)	$	392,964
Senior Secured Second Lien Notes	June 2022	6.75%	500,000		—			(17,811		)	482,189
SBI bonds	January 2020	5.00%	31,908		—			(24		)	31,884
			$	931,908	$	(332	)	$	(24,539	)	$	907,037

Credit Agreement

As described in Note 3 “ITG Acquisition”, in connection with the ITG Acquisition, Virtu Financial, VFH and the Acquisition Borrower entered into the Credit Agreement, with the lenders party thereto, Jefferies Finance LLC, as administrative agent and Jefferies Finance LLC and RBC Capital Markets, as joint lead arrangers and joint bookrunners.

The Credit Agreement provided (i) a senior secured first lien term loan (together with the Incremental Term Loans, as defined below; the “First Lien Term Loan Facility”) in an aggregate principal amount of $1,500 million, drawn in its entirety on the ITG Closing Date, with approximately $404.5 million borrowed by VFH to repay all amounts outstanding under the Existing Term Loan Facility (as defined below) and the remaining approximately $1,095 million borrowed by the Acquisition Borrower to finance the consideration and fees and expenses paid in connection with the ITG Acquisition, and (ii) a $50.0 million senior secured first lien revolving facility to VFH (the “First Lien Revolving Facility”), with a $5.0 million letter of credit subfacility and a $5.0 million swingline subfacility. After the ITG Closing Date, VFH assumed the obligations of the Acquisition Borrower in respect of the acquisition term loans.

On October 9, 2019 (the “Amendment Closing Date”), VFH entered into Amendment No. 1 (“Amendment No. 1”), which amended the Credit Agreement dated as of March 1, 2019 (as amended by Amendment No. 1, the “Amended Credit Agreement”) by and among VFH, Virtu Financial, the lenders party thereto, and Jefferies Finance, LLC, as administrative agent and collateral agent, to, among other things, provide for $525.0 million in aggregate principal amount of incremental term loans (the “Incremental Term Loans”), and amend the related collateral agreement. On the Amendment Closing Date, VFH borrowed the Incremental Term Loans and used the proceeds together with available cash to redeem all of the $500.0 million aggregate principal amount of the outstanding 6.750% Senior Secured Second Lien Notes (as defined below) due 2022 issued by VFH and Orchestra Co Issuer, Inc., a Delaware corporation and indirect subsidiary of the Company (together with VFH, the “Issuers”), and pay related fees and expenses. The terms, conditions and covenants applicable to the Incremental Term Loans are the same as the terms, conditions and covenants applicable to the existing term loans under the Credit Agreement, including a maturity date of March 1, 2026. The Company also previously entered into a five-year $525 million floating to fixed interest rate swap agreement that effectively fixes interest payment obligations on $525.0 million of principal under the First Lien Term Loan Facility at 4.8% through September 2024. During the year ended December 31, 2019, $100.0 million was repaid under the First Lien Term Loan Facility. As of December 31, 2019, $1,925 million was outstanding under the First Lien Term Loan Facility. On January 29, 2020 the Company entered into a five-year $1,000 million floating to fixed interest rate swap agreement that effectively fixes interest payment obligations on $1,000 million of principal under the First Lien Term Loan Facility at 4.9% through January 2025.

The term loan borrowings and revolver borrowings under the Credit Agreement bear interest at a per annum rate equal to, at the Company's election, either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.5%, (c) an adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one month plus 1% and (d) 1.00%, plus, in each case, 2.50%, with a stepdown to 2.25% based on VFH’s first lien leverage ratio, or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 0%, plus, in each case, 3.50%, with a stepdown to 3.25% based on VFH’s first lien leverage ratio. In addition, a commitment fee accrues at a rate of 0.50% per annum on the average daily unused amount of the First Lien Revolving Facility, with stepdowns to 0.375% and 0.25% per annum based on VFH’s first lien leverage ratio, and is payable quarterly in arrears.

The First Lien Revolving Facility under the Credit Agreement is subject to a springing net first lien leverage ratio test which may spring into effect as of the last day of a fiscal quarter if usage of the aggregate revolving commitments exceeds a specified level as of such date. VFH is also subject to contingent principal prepayments based on excess cash flow and certain other triggering events. Borrowings under the Credit Agreement are guaranteed by Virtu Financial and VFH’s material non-regulated domestic restricted subsidiaries and secured by substantially all of the assets of VFH and the guarantors, in each case, subject to certain exceptions.

Under the Credit Agreement, term loans will mature on March 1, 2026. The term loans amortize in annual installments equal to 1.0% of the original aggregate principal amount of the term loans. The revolving commitments will terminate on March 1, 2022.

The Credit Agreement contains certain customary covenants and events of default, including relating to a change of control. If an event of default occurs and is continuing, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts outstanding under the Credit Agreement and all actions permitted to be taken by a secured creditor in respect of the collateral securing the obligations under the Credit Agreement.

To finance the Acquisition of KCG, on June 30, 2017, Virtu Financial and VFH previously entered into the Fourth Amended and Restated Credit Agreement which, upon the closing of the Acquisition of KCG, provided for an aggregate $1.15 billion of first lien secured term loans (the “Existing Term Loan Facility”). As described above, the Existing Term Loan Facility was fully terminated following its repayment in full with the proceeds of the First Lien Term Loan Facility.

Senior Secured Second Lien Notes

To finance the Acquisition of KCG, on June 16, 2017, Orchestra Borrower LLC (the “Escrow Issuer”), a wholly owned subsidiary of Virtu Financial, and Orchestra Co-Issuer, Inc. (the “Co-Issuer”) completed the offering of $500.0 million aggregate principal amount of 6.750% Senior Secured Second Lien Notes due 2022 (the “Notes”). The Notes were issued under an Indenture, dated June 16, 2017 (the “Indenture”), among the Escrow Issuer, the Co-Issuer and U.S. Bank National Association, as trustee and collateral agent.

On July 20, 2017, VFH assumed all of the obligations of the Escrow Issuer under the Indenture and the Notes. The gross proceeds from the Notes were deposited into a segregated escrow account with an escrow agent. The proceeds were released from escrow as of the KCG Closing Date and were used to finance, in part, the Acquisition of KCG, and to repay certain indebtedness of the Company and KCG.

As described above, the Credit Agreement was amended on October 9, 2019, on which date VFH borrowed an additional $525.0 million of incremental first lien term loans, the proceeds of which were used together with cash on hand to redeem the Notes in full. The Indenture was fully terminated following such redemption.

SBI Bonds

On July 25, 2016, VFH issued Japanese Yen Bonds (collectively the “SBI Bonds”) in the aggregate principal amount of ¥3.5 billion ($33.1 million at issuance date) to SBI Life Insurance Co., Ltd. and SBI Insurance Co., Ltd. The proceeds from the SBI Bonds were used to partially fund the investment in SBI (as described in Note 11 “Financial Assets and Liabilities”). The SBI Bonds are guaranteed by Virtu Financial. The SBI Bonds are subject to fluctuations on the Japanese Yen currency rates relative to the Company’s reporting currency (U.S. Dollar) with the changes reflected in Other, net in the Consolidated Statements of Comprehensive Income. In December 2019, the maturity date of the SBI Bonds was extended to January 2023. The principal balance was ¥3.5 billion ($32.2 million) as of December 31, 2019 and ¥3.5 billion ($31.9 million) as of December 31, 2018. The Company recorded gains of $0.3 million, $0.8 million and $1.1 million during the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:



(in thousands)	December 31, 2019
2020	15,000
2021	15,000
2022	15,000
2023	47,225
2024	15,000
Thereafter	1,850,000
Total principal of long-term borrowings	$	1,957,225

Financial Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities

Financial Instruments Measured at Fair Value

The fair value of equities, options, on-the-run U.S. government obligations and exchange traded notes is estimated using recently executed transactions and market price quotations in active markets and are categorized as Level 1 with the exception of inactively traded equities and certain other financial instruments, which are categorized as Level 2. The Company’s corporate bonds, derivative contracts and other U.S. and non-U.S. government obligations have been categorized as Level 2. Fair value of the Company’s derivative contracts is based on the indicative prices obtained from a number of banks and broker-dealers, as well as management’s own analyses. The indicative prices have been independently validated through the Company’s risk management systems, which are designed to check prices with information independently obtained from exchanges and venues where such financial instruments are listed or to compare prices of similar instruments with similar maturities for listed financial futures in foreign exchange.

The Company prices certain financial instruments held for trading at fair value based on theoretical prices, which can differ from quoted market prices. The theoretical prices reflect price adjustments primarily caused by the fact that the Company continuously prices its financial instruments based on all available information. This information includes prices for identical and near-identical positions, as well as the prices for securities underlying the Company’s positions, on other exchanges that are open after the exchange on which the financial instruments is traded closes. The Company validates that all price adjustments can be substantiated with market inputs and checks the theoretical prices independently. Consequently, such financial instruments are classified as Level 2.

There were no transfers of financial instruments between levels during the years ended December 31, 2019, 2018 and 2017.

Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2019:



	December 31, 2019
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting			Total Fair Value
Assets
Financial instruments owned, at fair value:
Equity securities	$	600,259	$	1,080,518	$	—	$	—		$	1,680,777
U.S. and Non-U.S. government obligations	106,690		20,847		—		—			127,537
Corporate Bonds	—		171,591		—		—			171,591
Exchange traded notes	243		48,894		—		—			49,137
Currency forwards	—		242,552		—		(211,398		)	31,154
Options	8,538		—		—		—			8,538
	715,730		1,564,402		—		(211,398		)	2,068,734

Financial instruments owned, pledged as collateral:
Equity securities	362,439		291,927		—		—			654,366
Exchange traded notes	12		42,578		—		—			42,590
	362,451		334,505		—		—			696,956

Other Assets
Equity investment	—		—		46,245		—			46,245
Exchange stock	2,721		—		—		—			2,721
	2,721		—		46,245		—			48,966

Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equity securities	1,022,814		1,163,888		—		—			2,186,702
U.S. and Non-U.S. government obligations	39,091		2,713		—		—			41,804
Corporate Bonds	—		244,700		—		—			244,700
Exchange traded notes	15		21,631		—		—			21,646
Currency forwards	—		196,554		—		(196,535		)	19
Options	3,087		—		—		—			3,087
	$	1,065,007	$	1,629,486	$	—	$	(196,535	)	$	2,497,958

Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2018:



	December 31, 2018
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting			Total Fair Value
Assets
Financial instruments owned, at fair value:
Equity securities	$	587,680	$	1,022,221	$	—	$	—		$	1,609,901
U.S. and Non-U.S. government obligations	91,466		14,547		—		—			106,013
Corporate Bonds	—		87,500		—		—			87,500
Exchange traded notes	3,396		27,966		—		—			31,362
Currency forwards	—		2,792,373		—		(2,790,242		)	2,131
Options	11,899		—		—		—			11,899
	694,441		3,944,607		—		(2,790,242		)	1,848,806
Financial instruments owned, pledged as collateral:
Equity securities	389,810		359,036		—		—			748,846
U.S. and Non-U.S. government obligations	—		—		—		—			—
Exchange traded notes	6,968		35,301		—		—			42,269
	396,778		394,337		—		—			791,115
Other Assets
Equity investment	—		—		45,856		—			45,856
Exchange stock	2,417		—		—		—			2,417
	2,417		—		45,856		—			48,273

Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equity securities	931,992		1,336,338		—		—			2,268,330
U.S. and Non-U.S. government obligations	112,058		3,054		—		—			115,112
Corporate Bonds	—		40,123		—		—			40,123
Exchange traded notes	371		39,613		—		—			39,984
Currency forwards	—		2,720,749		—		(2,719,954		)	795
Options	11,051		—		—		—			11,051
	$	1,055,472	$	4,139,877	$	—	$	(2,719,954	)	$	2,475,395

SBI Investment

The Company has a minority investment (the “SBI Investment”) in SBI Japannext Co., Ltd. (“SBI”), a proprietary trading system based in Tokyo. In connection with the SBI Investment, the Company issued the SBI Bonds (as described in Note 10 “Borrowings”) and used the proceeds to partially finance the transaction. As of December 31, 2019, the fair value of the SBI Investment was determined using the discounted cash flow method, an income approach, with the discount rate of 15.0% applied to the cash flow forecasts. The Company also used a market approach based on 12.6x average price/earnings multiples of comparable companies to corroborate the income approach. The fair value of the SBI Investment at December 31, 2019 was determined by taking the weighted average of enterprise valuations based on discounted cash flow on projected income from the next five years, the implied enterprise valuations on comparable companies, and the implied enterprise valuations on comparable transactions. The fair value measurement is highly sensitive to significant changes in the unobservable inputs and significant increases (decreases) in discount rate or decreases (increases) in price/earnings multiples would result in a significantly lower (higher) fair value measurement. Changes in the fair value of the SBI Investment are reflected in Other, net in the Consolidated Statements of Comprehensive Income.

Financial Instruments Not Measured at Fair Value

The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the Consolidated Statement of Financial Condition. The table below excludes non-financial assets and liabilities. The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximates fair value due to the relatively short-term nature of the underlying assets. The fair value of the Company’s long-term borrowings is based on quoted prices from the market for similar instruments, and is categorized as Level 2 in the fair value hierarchy.

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2019:



	December 31, 2019
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents	$	732,164	$	732,164	$	732,164	$	—	$	—
Cash restricted or segregated under regulations and other	41,116		41,116		41,116		—		—
Securities borrowed	1,928,763		1,928,763		—		1,928,763		—
Securities purchased under agreements to resell	143,032		143,032		—		143,032		—
Receivables from broker-dealers and clearing organizations	1,318,584		1,318,584		40,842		1,277,742		—
Total Assets	4,163,659		4,163,659		814,122		3,349,537		—

Liabilities
Short-term borrowings	73,486		75,586		—		75,586		—
Long-term borrowings	1,917,866		1,966,850		—		1,966,850		—
Securities loaned	1,600,099		1,600,099		—		1,600,099		—
Securities sold under agreements to repurchase	340,742		340,742		—		340,742		—
Payables to broker-dealers and clearing organizations	826,750		826,750		49,514		777,236		—
Total Liabilities	$	4,758,943	$	4,810,027	$	49,514	$	4,760,513	$	—

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2018:



	December 31, 2018
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents	$	736,047	$	736,047	$	736,047	$	—	$	—
Securities borrowed	1,399,684		1,399,684		—		1,399,684		—
Securities purchased under agreements to resell	15,475		15,475		—		15,475		—
Receivables from broker-dealers and clearing organizations	1,101,449		1,101,449		71,288		1,030,161		—
Total Assets	3,252,655		3,252,655		807,335		2,445,320		—

Liabilities
Short-term borrowings	15,128		15,128		—		15,128		—
Long-term borrowings	907,037		916,465		—		916,465		—
Securities loaned	1,130,039		1,130,039		—		1,130,039		—
Securities sold under agreements to repurchase	281,861		281,861		—		281,861		—
Payables to broker dealer and clearing organizations	567,441		567,441		1,031		566,410		—
Total Liabilities	$	2,901,506	$	2,910,934	$	1,031	$	2,909,903	$	—

The following presents the changes in Level 3 financial instruments measured at fair value on a recurring basis:



	Year Ended December 31, 2019
(in thousands)	Balance at December 31, 2018		Purchases		Total Realized and Unrealized Gains / (Losses)		Net Transfers into (out of) Level 3		Settlement		Balance at December 31, 2019		Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2019
Assets
Other assets:
Equity investment	$	45,856	$	—	$	389	$	—	$	—	$	46,245	$	389
Total	45,856		—		389		—		—		46,245		389



	Year Ended December 31, 2018
(in thousands)	Balance at December 31, 2017		Purchases		Total Realized and Unrealized Gains / (Losses)		Net Transfers into (out of) Level 3		Settlement		Balance at December 31, 2018		Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2018
Assets
Other assets:
Equity investment	$	40,588	$	—	$	5,268	$	—	$	—	$	45,856	$	5,268
Total	40,588		—		5,268		—		—		45,856		5,268

Offsetting of Financial Assets and Liabilities

The Company does not net securities borrowed and securities loaned, or securities purchased under agreements to resell and securities sold under agreements to repurchase. These financial instruments are presented on a gross basis in the Consolidated Statements of Financial Condition. In the tables below, the amounts of financial instruments owned that are not offset in the Consolidated Statements of Financial Condition, but could be netted against financial liabilities with specific counterparties under legally enforceable master netting agreements in the event of default, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these financial instruments.

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2019 and December 31, 2018:



	December 31, 2019
	Gross Amounts of Recognized Assets		Amounts Offset in the Consolidated Statement of Financial Condition			Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,928,763	$	—		$	1,928,763	$	(1,881,005	)	$	(15,280	)	$	32,478
Securities purchased under agreements to resell	143,032		—			143,032		(142,922		)	—			110
Trading assets, at fair value:
Currency forwards	242,552		(211,398		)	31,154		—			—			31,154
Options	8,538		—			8,538		(8,537		)	—			1
Total	$	2,322,885	$	(211,398	)	$	2,111,487	$	(2,032,464	)	$	(15,280	)	$	63,743



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,600,099	$	—		$	1,600,099	$	(1,552,146	)	$	(15,281	)	$	32,672
Securities sold under agreements to repurchase	340,742		—			340,742		(340,718		)	—			24
Trading liabilities, at fair value:
Currency forwards	196,554		(196,535		)	19		—			—			19
Options	3,087		—			3,087		(3,087		)	—			—
Total	$	2,140,482	$	(196,535	)	$	1,943,947	$	(1,895,951	)	$	(15,281	)	$	32,715



	December 31, 2018
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,399,684	$	—		$	1,399,684	$	(1,361,635	)	$	(8,822	)	$	29,227
Securities purchased under agreements to resell	15,475		—			15,475		(15,475		)	—			—
Trading assets, at fair value:
Currency forwards	2,792,373		(2,790,242		)	2,131		—			—			2,131
Options	11,899		—			11,899		(11,899		)	—			—
Total	$	4,219,431	$	(2,790,242	)	$	1,429,189	$	(1,389,009	)	$	(8,822	)	$	31,358



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,130,039	$	—		$	1,130,039	$	(1,108,461	)	$	(8,822	)	$	12,756
Securities sold under agreements to repurchase	281,861		—			281,861		(281,861		)	—			—
Trading liabilities, at fair value:
Currency forwards	2,720,749		(2,719,954		)	795		—			(792		)	3
Options	11,051		—			11,051		(11,051		)	—			—
Total	$	4,143,700	$	(2,719,954	)	$	1,423,746	$	(1,401,373	)	$	(9,614	)	$	12,759

The following table presents gross obligations for securities sold under agreements to repurchase and for securities lending transactions by remaining contractual maturity and the class of collateral pledged:



	December 31, 2019
	Remaining Contractual Maturity
(in thousands)	Overnight and Continuous		Less than 30 days		30 - 60 days		61 - 90 Days		Total

Securities sold under agreements to repurchase:
Equity securities	$	—	$	75,000	$	50,000	$	150,000	$	275,000
U.S. and Non-U.S. government obligations	65,742		—		—		—		65,742
Total	65,742		75,000		50,000		150,000		340,742

Securities loaned:
Equity securities	1,600,099		—		—		—		1,600,099
Total	$	1,600,099	$	—	$	—	$	—	$	1,600,099



	December 31, 2018
	Remaining Contractual Maturity
(in thousands)	Overnight and Continuous		Less than 30 days		30 - 60 days		61 - 90 Days		Total

Securities sold under agreements to repurchase:
Equity securities	$	—	$	45,000	$	65,000	$	160,000	$	270,000
U.S. and Non-U.S. government obligations	11,861		—		—		—		11,861
Total	11,861		45,000		65,000		160,000		281,861

Securities loaned:
Equity securities	1,130,039		—		—		—		1,130,039
Total	$	1,130,039	$	—	$	—	$	—	$	1,130,039

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at December 31, 2019 and December 31, 2018:



(in thousands)		December 31, 2019					December 31, 2018
Derivatives Assets	Financial Statements Location	Fair Value			Notional		Fair Value			Notional
Derivative instruments not designated as hedging instruments:
Equities futures	Receivables from broker-dealers and clearing organizations	$	(1,366	)	$	4,502,017	$	(15,382	)	$	2,891,606
Commodity futures	Receivables from broker-dealers and clearing organizations	40,656			7,758,974		69,235			11,595,215
Currency futures	Receivables from broker-dealers and clearing organizations	(2,860		)	1,116,246		(9,432		)	3,756,914
Fixed income futures	Receivables from broker-dealers and clearing organizations	47			155,697		(28		)	18,694
Options	Financial instruments owned	8,538			442,808		11,899			659,101
Currency forwards	Financial instruments owned	242,552			24,369,818		2,792,373			171,288,432
Interest rate swap	Other assets	8,976			525,000		—			—

Derivatives Liabilities	Financial Statements Location	Fair Value			Notional		Fair Value			Notional
Derivative instruments not designated as hedging instruments:
Equities futures	Payables to broker-dealers and clearing organizations	$	751		$	83,803	$	468		$	106,487
Commodity futures	Payables to broker-dealers and clearing organizations	(45,175		)	3,604,979		(375		)	54,782
Currency futures	Payables to broker-dealers and clearing organizations	(23,223		)	6,594,991		(30,643		)	6,239,725
Fixed income futures	Payables to broker-dealers and clearing organizations	94			190,938		93			8,591
Options	Financial instruments sold, not yet purchased	3,087			436,422		11,051			608,756
Currency forwards	Financial instruments sold, not yet purchased	196,554			24,346,818		2,720,749			171,252,224

Derivative instruments designated as hedging instruments:
Currency forwards	Financial instruments sold, not yet purchased	—			—		(792		)	13,501

Amounts included in receivables from and payables to broker-dealers and clearing organizations represent net variation margin on long and short futures contracts.

The following table summarizes the net gain (loss) from derivative instruments not designated as hedging instruments under ASC 815, which are recorded in total revenues, and from those designated as hedging instruments under ASC 815, which are recorded in accumulated other comprehensive income in the accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017.



		Years Ended December 31,
(in thousands)	Financial Statements Location	2019			2018			2017
Derivative instruments not designated as hedging instruments:
Futures	Trading income, net	$	247,619		$	(309,598	)	$	290,609
Currency forwards	Trading income, net	(44,293		)	174,310			2,603
Options	Trading income, net	19,692			(6,161		)	(7,166		)
Interest rate swap (1)	Other, net	8,976			—			—
		$	231,994		$	(141,449	)	$	286,046

Derivative instruments designated as hedging instruments:
Foreign exchange - forward contract	Accumulated other comprehensive income	$	—		$	63		(642		)

(1) As disclosed in “Note 10 Borrowings”, the Company's Credit Agreement was amended on October 9, 2019, on which date VFH borrowed an additional $525.0 million of Incremental Term Loans. The Company entered into a five-year $525 million floating to fixed interest rate swap agreement that effectively fixes interest payment obligations on the Incremental Term Loans at 4.8% through September 2024. As of December 31, 2019, this interest rate swap did not meet the criteria in ASC 815 to qualify for hedge accounting, and gains and losses due to the derivative's change in market value were recorded in Other, net within total revenues.

Revenues from Contracts with Customers

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

Revenue Recognition

The Company adopted ASC Topic 606, Revenue from Contracts with Customers, as of January 1, 2018 in the consolidated financial statements by applying the modified retrospective method. The Company’s revenue recognition methods for its contracts with customers prior to the adoption of Topic 606 are consistent with its methods after the adoption of Topic 606. Accordingly, the adoption of the new standard did not result in a transition adjustment to opening retained earnings, and as a result, revenues for contracts with customers would not have been adjusted in prior periods and are not presented herein on an adjusted basis. As a result of the ITG Acquisition, subsequent to the ITG Closing Date, the Company has additional revenue streams as described below.

The guidance in ASC 606 does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, and as a result, did not have an impact on the market making elements of the Company’s Consolidated Statement of Comprehensive Income most closely associated with financial instruments, including Trading income, net and Interest and dividend income. The guidance primarily impacts the presentation of the Company's Execution Services revenue streams discussed below, all of which are presented within Commissions, net and technology services on the Company’s Consolidated Statements of Comprehensive Income.

Commissions, net. The Company earns commission revenue by acting as an agent on behalf of customers. The Company’s performance obligations consist of trade execution and clearing services and are satisfied on the trade date; accordingly, commission revenues are recorded on the trade date. Commission revenues are paid on settlement date; therefore, a receivable is recognized as of the trade date. Under a commission management program, the Company allows institutional clients to allocate a portion of their gross commissions to pay for research and other services provided by third parties. As the Company acts as an agent in these transactions, it records such expenses on a net basis within Commissions, net and technology services in the Consolidated Statements of Comprehensive Income.

Technology services. The Company’s technology services revenues consist of technology licensing fees and agency commission fees. Technology licensing fees are earned from third parties for licensing of the Company’s proprietary risk management and trading infrastructure technology and the provision of associated management and hosting services. These fees include both upfront and annual recurring fees as well as, in certain cases, contingent fees based on customer revenues, which represent variable consideration. The services offered under these contracts are delivered as an integrated package and are interdependent and have the same pattern of transfer to the customer; accordingly, the Company measures and recognizes them as a single performance obligation. The performance obligation is satisfied over time, and, therefore, revenue is recognized as time passes. Variable consideration has not been included in the transaction price as the amount of consideration is contingent on factors outside the Company’s control and thus it is not probable that a significant reversal of cumulative revenue recognized will not occur. Recurring fees, which exclude variable consideration, are billed and collected on a quarterly basis and are included within Receivables from broker-dealers and clearing organizations.

Workflow technology. Through its front-end workflow solutions and network capabilities, the Company provides order and trade execution management and order routing services.

The Company provides trade order routing from its execution management system (“EMS”) to its execution services offerings, with each trade order routed through the EMS representing a separate performance obligation that is satisfied at a point in time. Commissions earned are fixed and revenue is recognized on the trade date. A portion of the commissions earned on the trade is then allocated to workflow technology based on the stand-alone selling price paid by third-party brokers for order routing. The remaining commission is allocated to commissions, net using a residual allocation approach.

The Company participates in commission share arrangements, where trade orders are routed to third-party brokers from its EMS and its order management system (“OMS”). Commission share revenues from third-party brokers are generally fixed and revenue is recognized at a point in time on the trade date.

The Company provides OMS and related software products and connectivity services to customers and recognizes license fee revenues and monthly connectivity fees. License fee revenues, generated for the use of the Company’s OMS and other software products, is fixed and recognized at the point in time at which the customer is able to use and benefit from the license. Connectivity revenue is variable in nature, based on the number of live connections, and is recognized over time on a monthly basis using a time-based measure of progress.

Analytics. The Company provides customers with analytics products and services, including trading and portfolio analytics tools. The Company provides analytics products and services to customers and recognizes subscription fees, which are fixed for the contract term, based on when the products and services are delivered. Analytics services can be delivered either over time (when customers are provided with distinct ongoing access to analytics data) or at a point in time (when reports are only delivered to the customer on a periodic basis). Over time performance obligations are recognized using a time-based measure of progress on a monthly basis, since the analytics products and services are continually provided to the client. Point in time performance obligations are recognized when the analytics reports are delivered to the client.

Analytics products and services can also be paid for through variable bundled arrangements with trade execution services. Customers agree to pay for analytics products and services with commissions generated from trade execution services, and commissions are allocated to the analytics performance obligation(s) using:


(i)	the commission value for each customer for the products and services it receives, which is priced using the value for similar stand-alone subscription arrangements; and


(ii)	a calculated ratio of the commission value for the products and services relative to the total amount of commissions generated from the customer.

For these bundled commission arrangements, the allocated commissions to each analytics performance obligation are then recognized as revenue when the analytics product is delivered, either over time or at a point in time. These allocated commissions may be deferred if the allocated amount exceeds the amount recognizable based on delivery.

Disaggregation of Revenues

The following tables present the Company’s revenue from contracts with customers disaggregated by the services described above, by timing of revenue recognition, reconciled to the Company’s segments, for the years ended December 31, 2019 and 2018:



	Year Ended December 31, 2019
(in thousands)	Market Making		Execution Services		Corporate		Total
Revenues from contracts with customers:
Commissions, net	$	23,526	$	357,401	$	—	$	380,927
Workflow technology	—		82,610		—		82,610
Analytics	—		35,007		—		35,007
Total revenue from contracts with customers	23,526		475,018		—		498,544

Other sources of revenue	1,008,546		18,890		4,102		1,031,538

Total revenues	1,032,072		493,908		4,102		1,530,082

Timing of revenue recognition:
Services transferred at a point in time	1,032,072		427,721		4,102		1,463,895
Services transferred over time	—		66,187		—		66,187
Total revenues	$	1,032,072	$	493,908	$	4,102	$	1,530,082



	Year Ended December 31, 2018
(in thousands)	Market Making		Execution Services		Corporate			Total
Revenues from contracts with customers:
Commissions, net	$	28,813	$	150,206	$	—		$	179,019
Technology services	—		5,320		—			5,320
Total revenue from contracts with customers	28,813		155,526		—			184,339

Other sources of revenue	1,355,662		340,807		(2,090		)	1,694,379

Total revenues	1,384,475		496,333		(2,090		)	1,878,718

Timing of revenue recognition:
Services transferred at a point in time	1,384,475		491,013		(2,090		)	1,873,398
Services transferred over time	—		5,320		—			5,320
Total revenues	$	1,384,475	$	496,333	$	(2,090	)	$	1,878,718

Remaining Performance Obligations and Revenue Recognized from Past Performance Obligations

As of December 31, 2019, the aggregate amount of the transaction price allocated to the performance obligations relating to technology services, workflow technology, and analytics revenues that are unsatisfied (or partially unsatisfied) was not material.

Contract Assets and Contract Liabilities

The timing of the revenue recognition may differ from the timing of payment from customers. The Company records a receivable when revenue is recognized prior to payment, and when the Company has an unconditional right to payment. The Company records a contract liability when payment is received prior to the time at which the satisfaction of the service obligation occurs.

Receivables related to revenues from contracts with customers amounted to $53.6 million and $1.7 million as of December 31, 2019 and December 31, 2018, respectively. The Company did not identify any contract assets. There were no impairment losses on receivables as of December 31, 2019.

Deferred revenue primarily relates to deferred commissions allocated to analytics products and subscription fees billed in advance of satisfying the performance obligations. Deferred revenue related to contracts with customers was $8.6 million as of December 31, 2019. During the year ended December 31, 2019, the Company recognized revenue of $32.6 million that had been initially recorded as deferred revenue.

The Company has not identified any costs to obtain or fulfill its contracts under ASC 606.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
	2019			2018		2017
(in thousands)
U.S. operations	$	(103,080	)	$	659,937	$	70,484
Non-U.S. operations	(12,902		)	36,426		42,680
	$	(115,982	)	$	696,363	$	113,164

The provision for income taxes consists of the following for the years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
(in thousands)	2019			2018			2017
Current provision (benefit)
Federal	$	(1,861	)	$	49,047		$	(9,991	)
State and Local	4,362			18,697			65
Foreign	3,675			4,276			1,219
Deferred provision (benefit)
Federal	(13,422		)	4,986			106,415
State and Local	(1,455		)	(1,599		)	(3,380		)
Foreign	(3,576		)	764			(62		)
Provision for income taxes	$	(12,277	)	$	76,171		$	94,266

The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the

years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
	2019		2018		2017
(in thousands, except percentages)
Tax provision at the U.S. federal statutory rate	21.0	%	21.0	%	35.0	%
Less: rate attributable to noncontrolling interest	(8.1	)%	(10.2	)%	(19.1	)%
State and local taxes, net of federal benefit	2.4	%	1.9	%	(1.9	)%
Impact of 2017 Tax Act on deferred tax assets	—	%	—	%	80.1	%
Impact of 2017 Tax Act on tax receivable agreement obligation	—	%	—	%	(12.9	)%
Non-deductible expenses, net	(3.7	)%	(0.3	)%	1.9	%
Other, net	(1.0	)%	(1.5	)%	0.2	%
Effective tax rate	10.6	%	10.9	%	83.3	%

The components of the deferred tax assets and liabilities as of December 31, 2019, and 2018 are as follows:



	December 31,
(in thousands)	2019			2018
Deferred income tax assets
Tax Receivable Agreement	$	197,598		$	167,117
Share-based compensation	15,572			9,419
Intangibles	2,467			12,738
Fixed assets and other	44,908			21,088
Tax credits and net operating loss carryforwards	86,420			44,972
Less: Valuation allowance on net operating loss carryforwards and tax credits	(60,594		)	(44,947		)
Total deferred income tax assets	$	286,371		$	210,387

Deferred income tax liabilities
Intangibles	71,700			10,028
Total deferred income tax liabilities	$	71,700		$	10,028

The Company is subject to U.S. federal, state and local income tax at the rate applicable to corporations less the rate attributable to the noncontrolling interest in Virtu Financial. These noncontrolling interests are subject to U.S. taxation as partnerships. Accordingly, for the years ended December 31, 2019, 2018 and 2017 the income attributable to these noncontrolling interests is reported in the Consolidated Statements of Comprehensive Income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is the obligation of the individual partners. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation.

Included in Other assets on the Consolidated Statements of Financial Condition at December 31, 2019 and December 31, 2018 are current income tax receivables of $39.3 million and $41.1 million, respectively. The balances at December 31, 2019 and December 31, 2018 primarily comprise income tax benefits due to the Company from federal, state and local, and foreign tax jurisdictions based on income before taxes. Included in Accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition at December 31, 2019 and December 31, 2018 are current tax liabilities of $11.5 million and $10.0 million, respectively. The balances at December 31, 2019 and December 31, 2018 primarily comprise income taxes owed to federal, state and local, and foreign tax jurisdictions based on income before taxes.

Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the IPO (see Note 6 “Tax Receivable Agreements”), the Acquisition of KCG and the ITG Acquisition (see Note 3 “ITG Acquisition”), differences in the valuation of financial assets and liabilities, and other temporary differences arising from the deductibility of compensation, depreciation, and other expenses in different time periods for book and income tax return purposes.

There are no expiration dates on the deferred tax assets. The provisions of ASC 740 require that carrying amounts of deferred tax assets be reduced by a valuation allowance if, based on the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically with appropriate consideration given to all positive and negative evidence related to the

realization of the deferred tax assets. At December 31, 2019, the Company had U.S. federal net operating loss carryforwards of $91.3 million. The Company recorded a deferred tax asset related to these federal net operating carryforwards of $19.2 million. The Company did not record a valuation allowance against this deferred tax asset. At December 31, 2019, the Company recorded deferred income taxes related to state and local net operating losses of $3.7 million. These net operating losses will begin to expire in 2031. The Company did not record a valuation allowance against this deferred tax asset.

As a result of the ITG Acquisition, the Company has non-U.S. net operating losses at December 31, 2019 of $86.3 million and has recorded a related deferred tax asset of $17.9 million. A valuation allowance of $15.6 million was recorded against this deferred tax asset at December 31, 2019 as it is more likely than not that a portion of this deferred tax asset will not be realized. As a result of the Acquisition of KCG, the Company has non-U.S. net operating losses at December 31, 2019 and December 31, 2018 of $239.0 million and $239.3 million, respectively, and has recorded a related deferred tax asset of $44.9 million and $44.9 million, respectively. A full valuation allowance was also recorded against this deferred tax asset at December 31, 2019 and December 31, 2018 as it is more likely than not that this deferred tax asset will not be realized. No valuation allowance against the remaining deferred taxes was recorded as of December 31, 2019 and December 31, 2018 because it is more likely than not that these deferred tax assets will be fully realized.

The Company is subject to taxation in U.S. federal, state, local and foreign jurisdictions. As of December 31, 2019, the Company’s tax years for 2013 through 2018 and 2010 through 2018 are subject to examination by U.S. and non-U.S. tax authorities, respectively. As a result of the ITG Acquisition and the Acquisition of KCG, the Company has assumed any ITG and KCG tax exposures. In addition, the Company is subject to state and local income tax examinations in various jurisdictions for the tax years 2013 through 2018. The final outcome of these examinations is not yet determinable. However, the Company anticipates that adjustments to the unrecognized tax benefits, if any, will not result in a material change to the financial condition, results of operations and cash flows.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income or loss before income taxes and noncontrolling interest. Penalties, if any, are recorded in Operations and administrative expense and interest received or paid is recorded in Other, net or Operations and administrative expense in the Consolidated Statement of Comprehensive Income.

The Company had $8.8 million of unrecognized tax benefits as of December 31, 2019, all of which would affect the Company’s effective tax rate if recognized. The Company has determined that there are no uncertain tax positions that would have a material impact on the Company’s financial position as of December 31, 2019.

The table below presents the changes in the liability for unrecognized tax benefits. This liability is included in Accounts payable and accrued expenses and other liabilities on the Consolidated Statement of Financial Condition.



(in thousands)
Balance at December 31, 2016	$	—
Increase from Acquisition of KCG	7,232
Decreases based on tax positions related to prior period	—
Increase based on tax positions related to current period	68
Balance at December 31, 2017	7,300
Decreases based on tax positions related to prior period	(840		)
Increase based on tax positions related to current period	868
Balance at December 31, 2018	7,328
Increase from ITG Acquisition	2,713
Decreases based on tax positions related to prior period	(1,263		)
Increase based on tax positions related to current period	—
Balance at December 31, 2019	$	8,778

Commitments, Contingencies and Guarantees	12 Months Ended
Commitments, Contingencies and Guarantees	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments, Contingencies and Guarantees	Commitments, Contingencies and Guarantees Legal Proceedings In the ordinary course of business, the nature of the Company’s business subjects it to claims, lawsuits, regulatory examinations or investigations and other proceedings. The Company and its subsidiaries are subject to several of these matters at the present time. Given the inherent difficulty of predicting the outcome of litigation and regulatory matters, particularly in regulatory examinations or investigations or other proceedings in which substantial or indeterminate judgments, settlements, disgorgements, restitution, penalties, injunctions, damages or fines are sought, or where such matters are in the early stages, the Company cannot estimate losses or ranges of losses for such matters where there is only a reasonable possibility that a loss may be incurred. In addition, there are numerous factors that result in a greater degree of complexity in class-action lawsuits as compared to other types of litigation. There can be no assurance that these legal proceedings will not have a material adverse effect on the Company’s results of operations in any future period, and a material judgment, fine or sanction could have a material adverse impact on the Company’s financial condition, results of operations and cash flows. However, it is the opinion of management, after consultation with legal counsel that, based on information currently available, the ultimate outcome of these matters will not have a material adverse impact on the business, financial condition or operating results of the Company, although they might be material to the operating results for any particular reporting period. The Company carries directors’ and officers’ liability insurance coverage and other insurance coverage for potential claims, including securities actions, against the Company and its respective directors and officers. In connection with the Acquisition of KCG, a previously filed complaint, which was initially captioned Greenway v. KCG Holdings, Inc., et al., Case No. 2017-421-JTL and filed on behalf of a putative class in Delaware Chancery Court, was recaptioned Chester County Employees’ Retirement Fund v. KCG Holdings, Inc., et al., amended and refiled on February 14, 2018 to include claims for the alleged breach of fiduciary duties against former KCG board members, claims against each of the Company and Jefferies LLC for allegedly aiding and abetting the KCG board members’ alleged breaches of fiduciary duty and a claim against the Company and Jefferies LLC for alleged civil conspiracy. The amended complaint was again amended on July 16, 2018 with the filing of the Verified Second Amended Class Action Complaint (the “Second Amended Complaint”) to include additional factual allegations. In October 2019, the parties reached an agreement in principle to settle the matter. The agreement is subject to customary conditions including execution of definitive settlement documentation and final court approval. The proposed settlement contains no admission of any liability or wrongdoing on the part of the defendants, each of whom continues to deny all of the allegations against them and believes that the claims are without merit. Though the Company believes the likelihood of approval of the settlement is probable, we cannot predict with certainty the outcome of the litigation, and if an agreement is not reached or the settlement is not finally approved by the Court, we believe that we have meritorious defenses to the claims in the operative complaint. On January 29, 2019, the Company was named as a defendant in Ford v. ProShares Trust II, et al., No. 19-cv-886. The complaint was filed in federal district court in New York on behalf of a putative class, and asserts claims against the Company and numerous other financial institutions under Section 11 of the Securities Act of 1933 in connection with trading in a ProShares inverse-volatility ETF. Additionally, on February 27, 2019, and March 1, 2019, the Company was named as a defendant in Bittner v. ProShares Trust II, et al., No. 19-cv-1840, and Mareno v. ProShares Trust II, et al., No. 19-cv-1955, respectively. The complaints were filed in federal district court in New York on behalf of putative classes, and asserted substantially similar claims against the Company and other financial institutions. On April 29, 2019, these three actions were consolidated in federal district court in New York as In re ProShares Trust II Securities Litigation, No. 19-cv-886-DLC. A consolidated amended complaint, which did not specify the amount of alleged damages, was filed in the consolidated action on June 21, 2019. Defendants moved to dismiss the consolidated amended complaint on August 2, 2019. In response, plaintiffs filed a consolidated second amended complaint on September 6, 2019, which complaint also does not specify the amount of alleged damages. Defendants moved to dismiss the consolidated second amended complaint on September 27, 2019. The defendants’ motion to dismiss was granted on January 3, 2020, and plaintiffs subsequently filed a Notice of Appeal of the district court's ruling on the motion to dismiss on January 31, 2020. The Company believes that the claims are without merit and is defending itself vigorously. As a result of the ITG Acquisition, the Company assumed potential liabilities relating to ITG’s business, including but not limited to those potential liabilities arising from or related to pending, threatened or potential litigation or regulatory matters. These matters include but not are not necessarily limited to a Statement of Claim filed on July 27, 2018 by a former employee of ITG requesting a FINRA arbitration. The former ITG employee alleged that ITG breached the non-disparagement clause in his July 2011 separation agreement and tortiously interfered with his business relations. On June 26, 2019, the former employee informed the Company that he was seeking damages of approximately $65 million (exclusive of claims for pre-judgment interest, punitive damages, costs and fees). In an award dated October 24, 2019, the FINRA arbitration panel awarded the claimant $3 million in compensatory damages, and ordered the Company to pay additional fees and expenses which totaled an additional amount of approximately $3 million. The Company has paid all such amounts due to the claimant in full and final satisfaction of the award. The Company is vigorously seeking the reimbursement of a portion of the award from an insurance carrier. Other Legal and Regulatory Matters The Company owns subsidiaries including regulated entities that are subject to extensive oversight under federal, state and applicable international laws as well as self-regulatory organization (“SRO”) rules. Changes in market structure and the need to remain competitive require constant changes to the Company's systems, order routing and order handling procedures. The Company makes these changes while continuously endeavoring to comply with many complex laws and rules. Compliance, surveillance and trading issues common in the securities industry are monitored by, reported to, and/or reviewed in the ordinary course of business by the Company's regulators in the U.S. and abroad. As a major order flow execution destination, the Company is named from time to time in, or is asked to respond to a number of regulatory matters brought by U.S. regulators, foreign regulators, SROs, as well as actions brought by private plaintiffs, which arise from its business activities. There has recently been an increased focus by regulators on Anti-Money Laundering and sanctions compliance by broker-dealers and similar entities, as well as an enhanced interest on suspicious activity reporting and transactions involving microcap and low-priced securities. In addition, there has been an increased focus by Congress, federal and state regulators, SROs and the media on market structure issues, and in particular, high frequency trading, best execution, internalization, alternative trading system (“ATS”) manner of operations, market fragmentation and complexity, colocation, cybersecurity, access to market data feeds and remuneration arrangements, such as payment for order flow and exchange fee structures. From time to time, the Company is the subject of requests for information and documents from the SEC, the Financial Industry Regulatory Authority and other regulators. It is the Company's practice to cooperate and comply with the requests for information and documents. The Company is currently the subject of various regulatory reviews and investigations by federal and foreign regulators and SROs, including the SEC and the Financial Industry Regulatory Authority. In some instances, these matters may result in a disciplinary action and/or a civil or administrative action. For example, in December 2015, the Autorité des Marchés Financiers (“AMF”) fined the Company’s European subsidiary in the amount of €5.0 million (approximately $5.4 million) based on its allegations that the subsidiary of a predecessor entity engaged in price manipulation and violations of the AMF General Regulation and Euronext Market Rules. The fine was subsequently reduced in 2017 to €3.3 million (approximately $3.9 million) and in 2018 was reduced to €3.0 million (approximately $3.4 million). The Company has fully reserved for the monetary penalty as of December 31, 2019 and anticipates paying the fine during the year ended December 31, 2020. Representations and Warranties; Indemnification Arrangements In the normal course of its operations, the Company enters into contracts that contain a variety of representations and warranties in addition to indemnification obligations. The Company's maximum exposure under these arrangements is currently unknown, as any such exposure could relate to claims not yet brought or events which have not yet occurred. For example, in November 2013, KCG sold Urban Financial of America, LLC (“Urban”), the reverse mortgage origination and securitization business previously owned by Knight Capital Group, Inc., to an investor group now known as Finance of America Reverse, LLC (“FAR”). Pursuant to the terms of the Stock Purchase Agreement between KCG and FAR, Virtu has certain continuing obligations related to KCG's prior ownership of Urban and has been and, in the future may be, advised by FAR of potential claims thereunder. Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain a variety of representations and warranties and general indemnifications. The Company has also provided general indemnifications to its managers, officers, directors, employees, and agents against expenses, legal fees, judgments, fines, settlements, and other amounts actually and reasonably incurred by such persons under certain circumstances as more fully disclosed in its operating agreement. The overall maximum amount of the obligations (if any) cannot reasonably be estimated as it will depend on the facts and circumstances that give rise to any future claims.

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

The Company adopted ASU 2016-02 on January 1, 2019, and elected the modified retrospective method of implementation. The standard requires the recognition of ROU assets and lease liabilities for leases, which are defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company has elected the practical expedient which allows for leases with an initial

term of 12 months or less to be excluded from recognition on the Consolidated Statement of Financial Condition and for which lease expense is recognized on a straight-line basis over the lease term.

Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee. These leases are primarily for corporate office space, datacenters, and technology equipment. The leases have remaining terms of 1 year to 15 years, some of which include options to extend the initial term at the Company's discretion. The lease terms used in calculating ROU assets and lease liabilities include the options to extend the initial term when the Company is reasonably certain of exercising the options. The Company's lease agreements do not contain any material residual value guarantees, restrictions or covenants. In addition to the base rental costs, the Company’s lease agreements for corporate office space generally provide for rent escalations resulting from increased assessments for operating expenses, real estate taxes and other charges. Payments for such reimbursable expenses are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments was incurred.

The Company also subleases certain office space and facilities to third parties. The subleases have remaining terms of 1 to 12 years. The Company recognizes sublease income on a straight-line basis over the term of the sublease within Other, net on the Consolidated Statement of Comprehensive Income.

As the implied discount rate for most of the Company's leases is not readily determinable, the Company uses its incremental borrowing rate on its secured borrowings, which was based on the information available as of the initial transition date, January 1, 2019, in determining the present value of lease payments.

As part of its purchase price allocation related to the ITG Acquisition, the balances of ROU assets and lease liabilities for certain acquired ITG office space were adjusted to reflect their fair values as of the ITG Closing Date. Additionally, the discount rate used to value the lease liabilities on the acquired leases was adjusted to the Company's incremental borrowing rate on its secured borrowings as of the ITG Closing Date. See Note 3 “ITG Acquisition” for further information on the ITG Acquisition.

During the year ended December 31, 2019, the Company ceased use of certain office lease premises as part of its ongoing effort to consolidate office space. For the year ended December 31, 2019, the Company recognized $66.5 million in Termination of office leases on the Consolidated Statement of Comprehensive Income, comprising $27.1 million of impairments of ROU assets, $37.9 million of write-offs of leasehold improvements and fixed assets, and $1.4 million of dilapidation charges.

Lease assets and liabilities are summarized as follows:



(in thousands)	Financial Statement Location	December 31, 2019
Operating leases
Operating lease right-of-use assets	Operating lease right-of-use assets	$	314,526
Operating lease liabilities	Operating lease liabilities	365,364

Finance leases
Property and equipment, at cost	Property, equipment, and capitalized software, net	37,589
Accumulated depreciation	Property, equipment, and capitalized software, net	(24,579		)
Finance lease liabilities	Accounts payable, accrued expenses, and other liabilities	13,371

Weighted average remaining lease term and discount rate are as follows:



	December 31, 2019
Weighted average remaining lease term
Operating leases	7.50 years
Finance leases	1.45 years
Weighted average discount rate
Operating leases	5.70	%
Finance leases	3.52	%

The components of lease expense were as follows:



(in thousands)	Year Ended December 31, 2019
Operating lease cost:
Fixed	$	72,714
Variable	8,333
Impairment of ROU Asset	27,104
Total Operating lease cost	108,151

Finance lease cost:
Amortization of right-of-use assets	12,565
Interest on lease liabilities	661
Total Finance lease cost	13,226

Sublease income	12,590

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of December 31, 2019, are as follows:



(in thousands)	Operating Leases			Finance Leases
2020	$	76,118		$	10,929
2021	73,062			3,305
2022	66,850			565
2023	63,676			—
2024	32,144			—
2025 and thereafter	141,371			—
Total lease payments	453,221			14,799
Less imputed interest	(87,857		)	(1,428		)
Total lease liability	$	365,364		$	13,371

Future lease payments under non-cancelable leases and sublease receipts as of December 31, 2018 are as follows:



(thousands)	Capital		Operating		Subleases
2019	$	21,983	$	32,755	$	(8,979	)
2020	11,283		30,473		(9,324		)
2021	1,651		25,564		(8,844		)
2022	—		22,710		(8,552		)
2023	—		21,456		(8,695		)
Thereafter	—		113,779		(36,312		)
Total minimum lease payments	$	34,917	$	246,737	$	(80,706	)

Leases

term of 12 months or less to be excluded from recognition on the Consolidated Statement of Financial Condition and for which lease expense is recognized on a straight-line basis over the lease term.

Lease assets and liabilities are summarized as follows:



(in thousands)	Financial Statement Location	December 31, 2019
Operating leases
Operating lease right-of-use assets	Operating lease right-of-use assets	$	314,526
Operating lease liabilities	Operating lease liabilities	365,364

Finance leases
Property and equipment, at cost	Property, equipment, and capitalized software, net	37,589
Accumulated depreciation	Property, equipment, and capitalized software, net	(24,579		)
Finance lease liabilities	Accounts payable, accrued expenses, and other liabilities	13,371

Weighted average remaining lease term and discount rate are as follows:



	December 31, 2019
Weighted average remaining lease term
Operating leases	7.50 years
Finance leases	1.45 years
Weighted average discount rate
Operating leases	5.70	%
Finance leases	3.52	%

The components of lease expense were as follows:



(in thousands)	Year Ended December 31, 2019
Operating lease cost:
Fixed	$	72,714
Variable	8,333
Impairment of ROU Asset	27,104
Total Operating lease cost	108,151

Finance lease cost:
Amortization of right-of-use assets	12,565
Interest on lease liabilities	661
Total Finance lease cost	13,226

Sublease income	12,590

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of December 31, 2019, are as follows:



(in thousands)	Operating Leases			Finance Leases
2020	$	76,118		$	10,929
2021	73,062			3,305
2022	66,850			565
2023	63,676			—
2024	32,144			—
2025 and thereafter	141,371			—
Total lease payments	453,221			14,799
Less imputed interest	(87,857		)	(1,428		)
Total lease liability	$	365,364		$	13,371

Future lease payments under non-cancelable leases and sublease receipts as of December 31, 2018 are as follows:



(thousands)	Capital		Operating		Subleases
2019	$	21,983	$	32,755	$	(8,979	)
2020	11,283		30,473		(9,324		)
2021	1,651		25,564		(8,844		)
2022	—		22,710		(8,552		)
2023	—		21,456		(8,695		)
Thereafter	—		113,779		(36,312		)
Total minimum lease payments	$	34,917	$	246,737	$	(80,706	)

Cash

12 Months Ended

Dec. 31, 2019

Cash and Cash Equivalents [Abstract]

Cash

The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported within the Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the consolidated statements of cash flows.



(in thousands)	December 31, 2019		December 31, 2018
Cash and cash equivalents	$	732,164	$	729,547
Cash restricted or segregated under regulations and other	41,116		6,500
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	773,280	$	736,047

Capital Structure	12 Months Ended
Capital Structure	Dec. 31, 2019
Equity [Abstract]
Capital Structure	Capital Structure The Company has four classes of authorized common stock. The Class A Common Stock and the Class C Common Stock have one vote per share. The Class B Common Stock and the Class D Common Stock have 10 votes per share. Shares of the Company’s common stock generally vote together as a single class on all matters submitted to a vote of the Company’s stockholders. During the period prior to the Reorganization Transactions and IPO, Class A-2 profits interests and Class B interests in Virtu Financial were issued to Employee Holdco (as defined below) on behalf of certain key employees and stakeholders. In connection with the Reorganization Transactions, all Class A-2 profits interests and Class B interests were reclassified into Virtu Financial Units. As of December 31, 2019 and December 31, 2018, there were 7,919,952 and 8,760,755 Virtu Financial Units outstanding held by Employee Holdco (as defined below), respectively, and 840,803, 3,540,312, and 1,930,468 of such Virtu Financial Units and corresponding Class C Common Stock were exchanged into Class A Common Stock, forfeited or repurchased during the years ended December 31, 2019, 2018 and 2017, respectively. Amended and Restated 2015 Management Incentive Plan The Company’s board of directors and stockholders adopted the 2015 Management Incentive Plan, which became effective upon consummation of the IPO, and was subsequently amended and restated following receipt of approval from the Company’s stockholders on June 30, 2017. The Amended and Restated 2015 Management Incentive Plan provides for the grant of stock options, restricted stock units, and other awards based on an aggregate of 16,000,000 shares of Class A Common Stock, subject to additional sublimits, including limits on the total option grant to any one participant in a single year and the total performance award to any one participant in a single year. Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and the Assumed Awards. As of the ITG Closing Date, the aggregate number of shares of Class A Common Stock subject to such Assumed Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan was 1,230,406. Acquisition of KCG On the KCG Closing Date, the Company completed the all-cash Acquisition of KCG. In connection with the Acquisition of KCG, the Company issued 8,012,821 shares of the Company’s Class A Common Stock to Aranda Investments Pte. Ltd. (“Aranda”), an affiliate of Temasek Holdings (Private) Limited (“Temasek”), for an aggregate purchase price of approximately $125.0 million and 40,064,103 shares of the Company’s Class A Common Stock to North Island Holdings I, LP (the “North Island Stockholder”) for an aggregate purchase price of approximately $618.7 million, in each case in accordance with terms of an investment agreement in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act. The investment agreements are filed as exhibits to the Company’s 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2019. Share Repurchase Program In February 2018, the Company's board of directors authorized a new share repurchase program of up to $50.0 million in Class A Common Stock and Virtu Financial Units by March 31, 2019. On July 27, 2018, the Company's board of directors authorized the expansion of the Company's share repurchase program, increasing the total authorized amount by $50.0 million to $100.0 million and extending the duration of the program through September 30, 2019. The share repurchase program entitled the Company to repurchase shares from time to time in open market transactions, privately negotiated transactions or by other means. Repurchases were also permitted to be made under Rule 10b5-1 plans. The timing and amount of repurchase transactions were determined by the Company's management based on its evaluation of market conditions, share price, legal requirements and other factors. The program expired on September 30, 2019. From the inception of the program in February 2018, the Company repurchased approximately 2.6 million shares of Class A Common Stock and Virtu Financial Units for approximately $65.9 million. Secondary Offerings In May 2018, the Company and certain selling stockholders completed a public offering (the “May 2018 Secondary Offering”) of 17,250,000 shares of Class A Common Stock by the Company and certain selling stockholders at a purchase price per share of $27.16 (the offering price to the public of $28.00 per share minus the underwriters’ discount), which included the exercise in full by the underwriters of their option to purchase additional shares in the May 2018 Secondary Offering. The Company sold 10,518,750 shares of Class A Common Stock in the offering, the net proceeds of which were used to purchase an equivalent number of Virtu Financial Units and corresponding shares of Class D Common Stock from TJMT Holdings LLC pursuant to that certain Member Purchase Agreement, entered into on May 15, 2018 by and between the Company and TJMT Holdings LLC. The selling stockholders sold 6,731,250 shares of Class A Common Stock in the May 2018 Secondary Offering, including 2,081,250 shares of Class A Common Stock issued by the Company upon the exercise of vested stock options. In connection with the May 2018 Secondary Offering, the Company, TJMT Holdings LLC, the North Island Stockholder, Havelock Fund Investments Pte. Ltd. (“Havelock”) and Aranda entered into that certain Amendment No. 1 to the Amended and Restated Registration Rights Agreement dated April 20, 2017, by and among the Company, TJMT Holdings LLC, the North Island Stockholder, Havelock, Aranda and certain direct or indirect equityholders of the Company (the “Amended and Restated Registration Rights Agreement”) to add Mr. Vincent Viola and Mr. Michael Viola, directors of the Company, and to confirm that certain other persons (including the Company’s CEO) remain parties to the Amended and Restated Registration Rights Agreement. In May 2019, the Company completed a public offering (the “May 2019 Secondary Offering”) of 9,000,000 shares of Class A Common Stock at a purchase price per share paid by the underwriters of $22.00, the proceeds of which were used to purchase an equivalent number of Virtu Financial Units and corresponding shares of Class D Common Stock from TJMT Holdings LLC pursuant to that certain Member Purchase Agreement, entered into on May 14, 2019 by and between the Company and TJMT Holdings LLC. Employee Exchanges During the years ended December 31, 2019, 2018 and 2017, pursuant to the exchange agreement by and among the Company, Virtu Financial and holders of Virtu Financial Units, certain current and former employees elected to exchange 840,839, 3,919,462, and 1,355,763 units, respectively in Virtu Financial held directly or on their behalf by Virtu Employee Holdco LLC (“Employee Holdco”) on a one-for-one basis for shares of Class A Common Stock. As a result of the completion of the IPO, the Reorganization Transactions, the Secondary Offerings, employee exchanges, and the share issuance in connection with the Acquisition of KCG, the Company holds approximately a 62.2% interest in Virtu Financial at December 31, 2019.

Share-based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Share-based Compensation

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 18 “Capital Structure”, and in connection with the IPO, non-qualified stock options to purchase shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of four years from grant date and expires not later than 10 years from the date of grant.

The following table summarizes activity related to stock options for the years ended December 31, 2019, 2018 and 2017:



	Options Outstanding					Options Exercisable
	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Number of Options		Weighted Average Exercise Price Per Share
At December 31, 2016	8,234,000		$	19.00	8.29	2,058,000		$	19.00
Granted	—		—		—	—		—
Exercised	—		—		—	—		—
Forfeited or expired	(496,000	)	—		—	—		—
At December 31, 2017	7,738,000		19.00		7.29	3,869,000		19.00
Granted	—		—		—	—		—
Exercised	(4,168,100	)	19.00		—	—		19.00
Forfeited or expired	(83,750	)	—		—	—		—
At December 31, 2018	3,486,150		19.00		6.30	1,660,400		19.00
Granted	156,129		13.60		4.37	156,129		13.60
Exercised	(353,500	)	19.00		—	(353,500	)	19.00
Forfeited or expired	(55,000	)	—		—	—		—
At December 31, 2019	3,233,779		$	18.74	5.24	3,248,779		$	18.74

The expected life has been determined based on an average of vesting and contractual period. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined based on historical volatilities of comparable companies. The expected dividend yield was determined based on estimated future dividend payments divided by the IPO stock price.

The Company recognized $1.4 million, $5.8 million, and $5.2 million for the years ended December 31, 2019, 2018 and 2017, respectively, of compensation expense in relation to the stock options issued and outstanding. As of December 31, 2019 the stock options to purchase shares of Class A Common Stock were fully vested. As of December 31, 2018, total unrecognized share-based compensation expense related to unvested stock options was $1.6 million, and the amount was to be recognized over a weighted average period of 0.3 years.

Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and the Assumed Awards. The Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the ITG Merger Agreement) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance based vesting conditions. As of the ITG Closing Date, the aggregate number of shares of Class A Common Stock subject to such Assumed Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan was 1,230,406. The Company filed a Registration Statement on Form S-8 on the ITG Closing Date to register such shares of Class A Common Stock.

Class A Common Stock and Restricted Stock Units

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 18 “Capital Structure”, subsequent to the IPO, shares of immediately vested Class A Common Stock and restricted stock units were granted, with the latter vesting over a period of up to 4 years. The fair value of the Class A Common Stock and RSUs was determined based on a volume weighted average price and is being recognized on a straight-line basis over the vesting period. For the years ended December 31, 2019, 2018 and 2017, respectively, there were 441,920, 594,536 and 19,719 shares of immediately vested Class A Common Stock granted as part of year-end compensation. In addition, the Company accrued compensation expense of $12.6 million, $11.2 million and $11.0 million for the years ended December 31, 2019 and 2018 and 2017, respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in Employee compensation and payroll taxes on the Consolidated Statements of Comprehensive Income and Accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

The following table summarizes activity related to the RSUs (including the Assumed Awards):



	Number of Shares		Weighted Average Fair Value
At December 31, 2016	1,573,441		$	18.28
Granted	64,402		18.09
Exercised	(258,250	)	18.40
Forfeited or expired	(526,546	)	18.75
At December 31, 2017	853,047		17.94
Granted	1,265,899		20.89
Forfeited	(127,493	)	18.30
Vested	(612,531	)	18.76
At December 31, 2018	1,378,922		20.03
Granted	4,063,541		25.07
Forfeited	(643,709	)	21.58
Vested	(1,805,265	)	24.08
At December 31, 2019	2,993,489		$	24.10

The Company recognized $66.1 million, $17.9 million, and $9.9 million for the years ended December 31, 2019, 2018 and 2017, respectively, of compensation expense in relation to the restricted stock units. As of December 31, 2019 and December 31, 2018, total unrecognized share-based compensation expense related to unvested RSUs was $43.4 million and $21.3 million, respectively, and this amount is to be recognized over a weighted average period of 2.0 and 1.7 years, respectively.

Property, Equipment and Capitalized Software

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property, Equipment and Capitalized Software

Property, equipment and capitalized software consisted of the following at December 31, 2019 and December 31, 2018:



(in thousands)	2019			2018
Capitalized software costs	$	143,748		$	108,220
Leasehold improvements	71,981			67,995
Furniture and equipment	357,589			260,825
Total	573,318			437,040
Less: Accumulated depreciation and amortization	(457,229		)	(323,718		)
Total property, equipment and capitalized software, net	$	116,089		$	113,322

Depreciation expense for property and equipment for the years ended December 31, 2019, 2018, and 2017 was approximately $44.7 million, $48.4 million, and $36.8 million, respectively, and is included within depreciation and amortization expense in the Consolidated Statements of Comprehensive Income.

The Company’s capitalized software development costs excluding the compensation charges recognized in relation to the IPO disclosed below were approximately $32.5 million, $24.4 million, and $15.7 million for the years ended December 31, 2019, 2018, and 2017, respectively. The related amortization expense was approximately $21.4 million, $20.4 million, and $10.1 million for the years ended December 31, 2019, 2018, and 2017, respectively, and is included within Depreciation and amortization in the Consolidated Statements of Comprehensive Income.

Additionally, in connection with the compensation charges related to non-voting interest units (formerly Class B interests) recognized upon the IPO, the Company continuously capitalized the vesting of the interest units through December 31, 2017 as the non-voting interest units were fully vested. The Company capitalized approximately $0.04 million for the year ended December 31, 2017. The amortization costs related to these capitalized compensation charges and previously capitalized compensation charges related to the Class B interests of Virtu East MIP LLC and the Class B interests of Virtu Financial were approximately $0.02 million, and $0.1 million for the years ended December 31, 2018 and 2017, respectively.

Regulatory Requirement

12 Months Ended

Dec. 31, 2019

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Requirement

U.S. Subsidiaries

As of December 31, 2019 and December 31, 2018, U.S. broker-dealer subsidiaries of the Company are subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital for each of the five U.S. broker-dealers as detailed in the table below. Pursuant to NYSE rules, VAL was also required to maintain $1.0 million of capital in connection with the operation of its designated market maker (“DMM”) business as of December 31, 2019. The required amount is determined under the exchange rules as the greater of (i) $1 million or (ii) $75,000 for every 0.1% of NYSE transaction dollar volume in each of the securities for which the Company is registered as the DMM.

The regulatory capital and regulatory capital requirements of the U.S broker-dealer subsidiaries as of December 31, 2019 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Virtu Americas LLC	$	257,452	$	2,571	$	254,881
Virtu Financial BD LLC	30,317		1,000		29,317
Virtu Financial Capital Markets LLC	3,710		1,000		2,710
Virtu ITG LLC	66,069		1,000		65,069
Virtu Alternet Securities LLC	1,931		100		1,831

The regulatory capital and regulatory capital requirements of the U.S. broker-dealer subsidiaries as of December 31, 2018 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Virtu Americas LLC	$	381,211	$	2,035	$	379,176
Virtu Financial BD LLC	133,850		1,000		132,850
Virtu Financial Capital Markets LLC	9,457		1,000		8,457

As of December 31, 2019, VAL and VITG had $22.3 million and $7.4 million, respectively, of cash in special reserve bank accounts for the benefit of customers pursuant to SEC Rule 15c3-3, Computation for Determination of Reserve Requirements, and $4.5 million and $5.0 million, respectively, of cash in reserve bank accounts for the benefit of proprietary accounts of brokers. The balances are included within Cash restricted or segregated under regulations and other on the Consolidated Statement of Financial Condition.

Foreign Subsidiaries

The Company’s foreign subsidiaries are subject to regulatory capital requirements set by local regulatory bodies, including the Investment Industry Regulatory Organization of Canada (“IIROC”), the Central Bank of Ireland, the Financial Conduct Authority in the United Kingdom, the Australian Securities Exchange, the Securities and Futures Commission in Hong Kong, and the Monetary Authority of Singapore. Virtu Financial Canada ULC was admitted to membership in IIROC in March 2019. The regulatory net capital balances and regulatory capital requirements applicable to these subsidiaries as of December 31, 2019 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Canada
Virtu ITG Canada Corp	$	13,029	$	193	$	12,836
TriAct Canada Marketplace LP	2,538		193		2,345
Virtu Financial Canada ULC	2,459		193		2,266
Ireland
Virtu ITG Europe Limited	54,129		32,484		21,645
Virtu Financial Ireland Limited	78,385		43,233		35,152
United Kingdom
Virtu ITG UK Limited	1,378		991		387
Asia Pacific
Virtu ITG Australia Limited	24,574		8,451		16,123
Virtu ITG Hong Kong Limited	3,805		539		3,266
Virtu ITG Singapore Pte Limited	1,179		72		1,107

As of December 31, 2019, Virtu ITG Europe Limited and Virtu ITG Canada Corp had $1.2 million and $0.4 million, respectively, of funds on deposit for trade clearing and settlement activity, and Virtu ITG Hong Kong Ltd had $30 thousand of segregated balances under a collateral account control agreement for the benefit of certain customers.

Geographic Information and Business Segments

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Geographic Information and Business Segments

The Company operates its business in the U.S. and internationally, primarily in Europe and Asia. Significant transactions and balances between geographic regions occur primarily as a result of certain of the Company’s subsidiaries incurring operating expenses such as employee compensation, communications and data processing and other overhead costs, for the purpose of providing execution, clearing and other support services to affiliates. Charges for transactions between regions are designed to approximate full costs. Intra-region income and expenses and related balances have been eliminated in the geographic information presented below to accurately reflect the external business conducted in each geographical region. The revenues are attributed to countries based on the locations of the subsidiaries. The following table presents total revenues by geographic area for the years ended December 31, 2019, 2018 and 2017:



	Years Ended December 31,
(in thousands)	2019			2018		2017
Revenues:
United States (1)	$	1,146,104		$	1,644,641	$	791,044
Ireland	188,154			81,531		97,637
United Kingdom	(1,735		)	15,681		21,143
Singapore	109,761			136,161		113,891
Canada	49,666			—		—
Australia	34,933			—		—
Others	3,199			704		4,267
Total revenues	$	1,530,082		$	1,878,718	$	1,027,982

(1) Includes $337.6 million gain on sale of BondPoint for the year ended December 31, 2018 and $86.6 million gain on the reduction of the Company's tax receivable agreement obligation as a result of the decrease in the U.S. corporate income tax rate for the year ended December 31, 2017.

The Company has two operating segments: (i) Market Making and (ii) Execution Services; and one non-operating segment: Corporate.

The Market Making segment principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker-dealers, banks and institutions. The Company engages in principal trading in the Market Making segment direct to clients as well as in a supplemental capacity on exchanges, ECNs and ATSs. The Company is an active participant on all major global equity and futures exchanges and also trades on substantially all domestic electronic options exchanges. As a complement to electronic market making, the cash trading business handles specialized orders and also transacts on the OTC Link ATS operated by OTC Markets Group Inc. and the AIM.

The Execution Services segment comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker-dealers as well as technology services revenues. The Company earns commissions and commission equivalents as an agent on behalf of clients as well as between principals to transactions; in addition, the Company will commit capital on behalf of clients as needed. Agency-based, execution-only trading in the segment is done primarily through a variety of access points including: (i) algorithmic trading and order routing in global equities and options; (ii) institutional sales traders who offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs; and (iii) matching of client conditional orders in POSIT Alert and in the Company's ATSs, including Virtu MatchIt, POSIT, and MATCHNow. The Execution Services segment also includes revenues derived from providing (a) proprietary risk management and trading infrastructure technology to select third parties for a service fee, (b) workflow technology, the Company’s integrated, broker-neutral trading tools delivered across the globe including trade order and execution management and order management software applications and network connectivity and (c) trading analytics, including (1) tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance, (2) portfolio construction and optimization decisions and (3) securities valuation.

The Corporate segment contains the Company's investments, principally in strategic trading-related opportunities and maintains corporate overhead expenses and all other income and expenses that are not attributable to the Company's other segments.

Management evaluates the performance of its segments on a pre-tax basis. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the years ended December 31, 2019, 2018 and 2017 are summarized in the following table:



(in thousands)	Market Making		Execution Services			Corporate			Consolidated Total
2019
Total revenue	$	1,032,072	$	493,908		$	4,102		$	1,530,082
Income before income taxes and noncontrolling interest	109,189		(126,930		)	(98,241		)	(115,982		)

2018
Total revenue	1,384,475		496,333			(2,090		)	1,878,718
Income (loss) before income taxes and noncontrolling interest	422,648		325,043			(51,328		)	696,363

2017
Total revenue	836,707		99,135			92,140			1,027,982
Income (loss) before income taxes and noncontrolling interest	74,633		(12,519		)	51,050			113,164

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2019
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company incurs expenses and maintains balances with its affiliates in the ordinary course of business. As of December 31, 2019, and December 31, 2018 the Company had a net receivable from its affiliates of $1.3 million and a net payable to its affiliates of $3.0 million, respectively. The Company has held a minority interest in SBI since 2016 (see Note 11 “Financial Assets and Liabilities”). The Company pays exchange fees to SBI for the trading activities conducted on its proprietary trading system. The Company paid $12.9 million, $9.5 million and $6.0 million for the years ended December 31, 2019, 2018 and 2017, respectively, to SBI for these trading activities. The Company makes payments to two JVs (see Note 2 “Summary of Significant Accounting Policies”) to fund the construction of the microwave communication networks, and to purchase microwave communication networks, which are recorded within Communications and data processing on the Consolidated Statements of Comprehensive Income. The Company made payments of $19.9 million, $20.0 million and $8.3 million to the JVs for the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, in 2018, the Company sold certain assets to one of its joint ventures, including the intangible assets associated with leases with a net carrying value of $1.1 million at the time of sale, for $0.6 million. The Company purchases network connections services from affiliates of Level 3 Communications (“Level 3”). Temasek and its affiliates have a significant ownership interest in Level 3. The Company paid $1.5 million, $1.5 million and $2.5 million for the years ended December 31, 2019, 2018 and 2017, respectively, to Level 3 for these services. Subsequent to the ITG Acquisition, the Company makes commission-sharing arrangement (“CSA”) payments to affiliates of DBS Group Holdings (“DBS”). Temasek and its affiliates have a significant ownership interest in DBS. The Company made payments of $0.1 million to DBS for the year ended December 31, 2019. In May 2019, the Company completed the May 2019 Secondary Offering of 9,000,000 shares of Class A Common Stock at a purchase price per share paid by the underwriters of $22.00, the proceeds of which were used to purchase an equivalent number of Virtu Financial Units and corresponding shares of Class D Common Stock from TJMT Holdings LLC, the Company’s founding equity holder, pursuant to that certain Member Purchase Agreement, entered into on May 14, 2019 by and between the Company and TJMT Holdings LLC.

Parent Company

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Parent Company

VFI is the sole managing member of Virtu Financial, which guarantees the indebtedness of its direct subsidiary under the First Lien Term Loan Facility (see Note 10 “Borrowings”). VFI is limited to its ability to receive distributions (including for purposes of paying corporate and other overhead expenses and dividends) from Virtu Financial under the Credit Agreement. The following financial statements (the “Parent Company Only Financial Statements”) should be read in conjunction with the consolidated financial statements of the Company and the foregoing.

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Financial Condition



	As of December 31,
(In thousands except interest data)	2019			2018
Assets
Cash	$	4,650		$	3,841
Deferred tax asset	197,792			189,627
Investment in subsidiary	2,689,026			1,730,867
Other assets	33,653			35,998
Total assets	$	2,925,121		$	1,960,333

Liabilities, redeemable membership interest and equity
Liabilities
Payable to affiliate	$	1,724,465		$	694,028
Accounts payable and accrued expenses and other liabilities	—			6
Tax receivable agreement obligations	269,282			214,403
Total liabilities	$	1,993,747		$	908,437

Virtu Financial Inc. Stockholders' equity
Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 120,435,912 and 108,955,048 shares, Outstanding — 118,257,141 and 106,776,277 shares at December 31, 2019 and December 31, 2018, respectively	1			1
Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2019 and December 31, 2018, respectively	—			—
Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 12,887,178 and 13,749,886 shares at December 31, 2019 and December 31, 2018, respectively	—			—
Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 60,091,740 and 69,091,740 shares at December 31, 2019 and December 31, 2018, respectively	1			1
Treasury stock, at cost, 2,178,771 and 2,178,771 shares at December 31, 2019 and December 31, 2018, respectively	(55,005		)	(55,005		)
Additional paid-in capital	1,075,779			1,010,468
Retained earnings (accumulated deficit)	(88,755		)	96,513
Accumulated other comprehensive income (loss)	(647		)	(82		)
Total Virtu Financial Inc. stockholders' equity	$	931,374		$	1,051,896

Total liabilities and stockholders' equity	$	2,925,121		$	1,960,333

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Income



	For the Years Ended December 31,
(in thousands)	2019			2018			2017
Revenues:
Other Income	—			—			86,599
	—			—			86,599

Operating Expenses:
Operations and administrative	3			1			181

Income (loss) before equity in income of subsidiary	(3		)	(1		)	86,418
Equity in income (loss) of subsidiary, net of tax	(29,416		)	620,193			(83,479		)
Net income (loss)	$	(29,419	)	$	620,192		$	2,939
Net income (loss) attributable to common stockholders	(29,419		)	620,192			2,939
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes	(565		)	(3,073		)	3,243
Comprehensive income (loss)	$	(29,984	)	$	617,119		$	6,182

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Cash Flows



	For the Years Ended December 31,
(in thousands)	2019			2018			2017
Cash flows from operating activities
Net income	$	(29,419	)	$	620,192		$	2,939

Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of subsidiary, net of tax	136,878			(305,936		)	(513,601		)
Tax receivable agreement obligation reduction	54,879			79,722			(86,599		)
Deferred taxes	(8,165		)	(64,996		)	102,973
Other	—			—			(8,500		)
Changes in operating assets and liabilities:	2,339			(25,268		)	(8,832		)
Net cash provided by (used in) operating activities	156,512			303,714			(511,620		)

Cash flows from investing activities
Acquisition of KCG, net of cash acquired, described in Note 3	—			—			(23,908		)
Investments in subsidiaries, equity basis	70,762			34,909			16,846
Net cash provided by (used in) investing activities	70,762			34,909			(7,062		)

Cash flows from financing activities
Distribution from Virtu Financial to non-controlling interest	(99,221		)	(206,903		)	(89,563		)
Dividends	(112,414		)	(100,329		)	(63,814		)
Payments on repurchase of non-voting common interest	—			—			(11,143		)
Repurchase of Class C common stock	(196		)	(8,216		)	—
Purchase of treasury stock	(14,259		)	(66,218		)	(2,683		)
Tax receivable agreement obligations	—			(12,359		)	(7,045		)
Issuance of common stock, net of offering costs	—			—			735,974
Issuance of common stock in connection with secondary offering, net of offering costs	(375		)	(950		)	—
Net cash provided by (used in) financing activities	$	(226,465	)	$	(394,975	)	$	561,726

Net increase (decrease) in Cash	$	809		$	(56,352	)	$	43,044
Cash, beginning of period	3,841			60,193			17,149
Cash, end of period	$	4,650		$	3,841		$	60,193

Supplemental disclosure of cash flow information:
Taxes paid	$	—		$	—		$	133

Non-cash financing activities
Tax receivable agreement described in Note 6	—			—			1,534

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events The Company has evaluated subsequent events for adjustment to or disclosure in its consolidated financial statements through the date of this report, and has not identified any recordable or disclosable events, not otherwise reported in these consolidated financial statements or the notes thereto, except for the following: On February 11, 2020, the Company’s board of directors declared a dividend of $0.24 per share of Class A Common Stock and Class B Common Stock and per participating Restricted Stock Unit that will be paid on March 16, 2020 to holders of record as of March 2, 2020. On January 29, 2020, the Company entered into a five-year $1,000 million floating to fixed interest rate swap agreement that effectively fixes interest payment obligations on $1,000 million of principal under the First Lien Term Loan Facility at 4.9% through January 2025. On February 10, 2020, the Company announced a repricing amendment (“Amendment No. 2”) to its Credit Agreement to decrease the applicable interest rate by 0.5%. This amendment is expected to close on or about March 2, 2020, subject to the satisfaction of customary closing conditions. Following such closing, the applicable borrowing rates for term loan borrowings and revolver borrowings under the Credit Agreement will bear interest at a per annum rate equal to, at the Company's election, either (i) the greatest of (a) the prime rate in effect, (b) the greater of (1) the federal funds effective rate and (2) the overnight bank funding rate, in each case plus 0.5%, (c) an adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one month plus 1% and (d) 1.00%, plus, in each case, 2.00%, or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 0%, plus, in each case, 3.00%. The lower interest rate resulting from Amendment No. 2, when consummated, in combination with the interest rate swaps entered into on January 29, 2020 and on October 9, 2019 will result in a blended fixed rate of 4.367% on $1,525 million of the First Lien Term Loan Facility debt for approximately five years. The remaining $400 million of the First Lien Term Loan Facility debt will remain floating and pegged to LIBOR, but at a reduced spread.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Use of Estimates

Earnings Per Share

Cash and Cash Equivalents

Securities Borrowed and Securities Loaned

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

Receivables from/Payables to Broker-dealers and Clearing Organizations

Financial Instruments Owned Including Those Pledged as Collateral and Financial Instruments Sold, Not Yet Purchased

Fair Value Measurements

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or

Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Transfers in or out of levels are recognized based on the beginning fair value of the period in which they occurred.

Fair Value Option

Derivative Instruments

Client Commission Arrangements

Property and Equipment

Capitalized Software

Leases

Goodwill

The Company assesses goodwill for impairment on an annual basis on July 1 and on an interim basis when certain events occur or certain circumstances exist.

Intangible Assets

Exchange Memberships and Stock

Trading Income, net

Commissions, net and Technology Services

Interest and Dividends Income/Interest and Dividends Expense

Brokerage, Exchange and Clearance Fees, Net

Payments for Order Flow

Income Taxes

Comprehensive Income and Foreign Currency Translation

Share-Based Compensation

Variable Interest Entities

The Company’s exposure to the obligations of these VIEs is generally limited to its interests in each respective JV, which is the carrying value of the equity investment in each JV.

Accounting Pronouncements, Recently Adopted and Accounting Pronouncements, Not Yet Adopted

Accounting Pronouncements, Recently Adopted

Accounting Pronouncements, Not Yet Adopted as of December 31, 2019

Revenue Recognition

Workflow technology. Through its front-end workflow solutions and network capabilities, the Company provides order and trade execution management and order routing services.


(i)	the commission value for each customer for the products and services it receives, which is priced using the value for similar stand-alone subscription arrangements; and


(ii)	a calculated ratio of the commission value for the products and services relative to the total amount of commissions generated from the customer.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of nonconsolidated VIE

The following table presents the Company’s nonconsolidated VIEs at December 31, 2019:



	Carrying Amount				Maximum Exposure to Loss		VIEs' assets
(in thousands)	Asset		Liability		Maximum Exposure to Loss		VIEs' assets
Equity investment	$	28,579	$	—	$	28,579	$	119,051

The following table presents the Company’s nonconsolidated VIEs at December 31, 2018:



	Carrying Amount				Maximum Exposure to Loss		VIEs' assets
(in thousands)	Asset		Liability		Maximum Exposure to Loss		VIEs' assets
Equity investment	$	18,254	$	—	$	18,254	$	49,450

ITG Acquisition (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Summary of the estimated fair values of the assets acquired and liabilities assumed

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the ITG Closing Date:



(in thousands)	March 1, 2019		Measurement Period			December 31, 2019
Cash and equivalents	$	197,072	$	—		$	197,072
Cash and securities segregated under federal regulations	14,232		—			14,232
Securities borrowed	13,182		—			13,182
Receivables from broker dealers and clearing organizations	328,112		—			328,112
Financial instruments owned, at fair value	523		—			523
Receivables from customers	122,697		—			122,697
Property, equipment and capitalized software (net)	46,408		—			46,408
Intangibles	479,600		37,600			517,200
Deferred tax assets	17,221		384			17,605
Operating lease right-of-use assets	87,236		13,049			100,285
Other assets	31,653		(1		)	31,652
Total Assets	1,337,936		51,032			1,388,968

Short-term borrowings	18,651		—			18,651
Securities loaned	17,663		—			17,663
Payables to broker dealers and clearing organizations	152,043		—			152,043
Payables to customers	116,419		—			116,419
Financial instruments sold, not yet purchased, at fair value	11		—			11
Accounts payable and accrued expenses and other liabilities	172,727		6,166			178,893
Operating lease liabilities	104,983		(5,290		)	99,693
Deferred tax liabilities	65,888		5,165			71,053
Total Liabilities	648,385		6,041			654,426

Total identified assets acquired, net of assumed liabilities	689,551		44,991			734,542

Goodwill	357,334		(44,991		)	312,343

Total Purchase Price	$	1,046,885	$	—		$	1,046,885

Schedule of preliminary allocation of intangible assets, amortization period and goodwill

Amounts allocated to intangible assets, the amortization period and goodwill were as follows:



(in thousands)	Amount		Amortization Years
Technology	$	76,000	5
Customer relationships	437,600		10
Trade names	3,600		3
Intangible assets	517,200
Goodwill	312,343
Total	$	829,543

Schedule of pro forma results




(in thousands)
Revenues	$	347,859
Income (loss) before income taxes	(64,917		)

Schedule of pro forma financial Information

The pro forma financial information combines the historical results for the Company and ITG for the years ended December 31, 2019 and 2018:



	For the Year Ended December 31,
(in thousands)	2019			2018
Revenue	$	1,605,340		$	2,388,194

Net income (loss)	(94,233		)	514,821

Net income (loss) available for common stockholders	(53,243		)	240,265

Sale of BondPoint (Tables)

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Summary of assets and liabilities of businesses held for sale

A summary of the carrying value of BondPoint and gain on sale of BondPoint is as follows:



(in thousands)
Total sale proceeds received	$	400,192
Business assets and liabilities held for sale as of December 31, 2017:
Receivables from broker dealers and clearing organizations	3,383
Intangibles and other assets	51,687
Liabilities	(728		)
Total carrying value of BondPoint as of December 31, 2017:	54,342
Goodwill adjustment allocated to BondPoint	8,300
Gain on sale of BondPoint	337,550
Transaction costs	8,568
Gain on sale of BondPoint, net of transaction costs	$	328,982

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Schedule of reconciliation of net income before noncontrolling interest to net income available for common stockholders

Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

The below table contains a reconciliation of net income (loss) before noncontrolling interest to net income (loss) available for common stockholders:



	Years Ended December 31,
(in thousands)	2019			2018			2017
Income (loss) before income taxes and noncontrolling interest	$	(115,982	)	$	696,363		$	113,164
Provision for (benefit from) income taxes	(12,277		)	76,171			94,266
Net income (loss)	(103,705		)	620,192			18,898

Noncontrolling interest	45,110			(330,751		)	(15,959		)

Net income (loss) available for common stockholders	$	(58,595	)	$	289,441		$	2,939

Schedule of basic earnings per share

The calculation of basic and diluted earnings per share is presented below:



	Years Ended December 31,
(in thousands, except for share or per share data)	2019			2018			2017
Basic earnings (loss) per share:
Net income (loss) available for common stockholders	$	(58,595	)	$	289,441		$	2,939
Less: Dividends and undistributed earnings allocated to participating securities	(1,926		)	(5,418		)	(1,326		)
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities	(60,521		)	284,023			1,613

Weighted average shares of common stock outstanding:
Class A	113,918,103			100,875,793			62,579,147

Basic earnings (loss) per share	$	(0.53	)	$	2.82		$	0.03

Schedule of diluted earnings per share



	Years Ended December 31,
(in thousands, except for share or per share data)	2019			2018		2017
Diluted earnings (loss) per share:
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities	$	(60,521	)	$	284,023	$	1,613

Weighted average shares of common stock outstanding:
Class A
Issued and outstanding	113,918,103			100,875,793		62,579,147
Issuable pursuant to Amended and Restated 2015 Management Incentive Plan (1)	—			1,213,346		—
	113,918,103			102,089,139		62,579,147

Diluted earnings (loss) per share	$	(0.53	)	$	2.78	$	0.03

(1)

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill by segment

The following table presents the details of goodwill by segment:



(in thousands)	Market Making		Execution Services		Corporate		Total
Balance as of December 31, 2018	$	755,292	$	81,291	$	—	$	836,583
Goodwill recognized in ITG Acquisition	—		312,343		—		312,343
Balance as of December 31, 2019	$	755,292	$	393,634	$	—	$	1,148,926

Schedule of acquired intangible assets

Acquired intangible assets consisted of the following as of December 31, 2019 and December 31, 2018:



	As of December 31, 2019
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Useful Lives (Years)
Purchased technology	$	110,000	$	110,000	$	—	1.4	to	2.5
ETF issuer relationships	950		770		180			9
ETF buyer relationships	950		770		180			9
Technology	136,000		58,203		77,797		1	to	6
Customer relationships	486,600		46,456		440,144		10	to	12
Trade name	3,600		1,000		2,600			3
Favorable occupancy leases	5,895		2,040		3,855		3	to	15
Exchange memberships	4,882		—		4,882		Indefinite
	$	748,877	$	219,239	$	529,638



	As of December 31, 2018
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Useful Lives (Years)
Purchased technology	$	110,000	$	110,000	$	—	1.4	to	2.5
ETF issuer relationships	950		665		285			9
ETF buyer relationships	950		665		285			9
Technology	60,000		30,185		29,815		1	to	6
Customer relationships	49,000		5,905		43,095			12
Favorable occupancy leases	5,895		1,224		4,671		3	to	15
Exchange memberships	5,838		—		5,838		Indefinite
	$	232,633	$	148,644	$	83,989

Receivables from/Payables to Broker-Dealers and Clearing Organizations (Tables)

12 Months Ended

Dec. 31, 2019

Due to and from Broker-Dealers and Clearing Organizations [Abstract]

Summary of receivables from and payables to brokers-dealers and clearing organizations

The following is a summary of receivables from and payables to brokers-dealers and clearing organizations at December 31, 2019 and December 31, 2018:




(in thousands)	December 31, 2019		December 31, 2018
Assets
Due from prime brokers	$	418,059	$	302,152
Deposits with clearing organizations	231,977		84,509
Net equity with futures commission merchants	267,748		294,884
Unsettled trades with clearing organization	214,618		193,544
Securities failed to deliver	178,324		218,663
Commissions and fees	7,858		7,697
Total receivables from broker-dealers and clearing organizations	$	1,318,584	$	1,101,449

Liabilities
Due to prime brokers	$	511,524	$	354,300
Net equity with futures commission merchants	50,950		47,998
Unsettled trades with clearing organization	118,286		90,021
Securities failed to receive	144,494		73,547
Commissions and fees	1,496		1,575
Total payables to broker-dealers and clearing organizations	$	826,750	$	567,441

Collateralized Transactions (Tables)

12 Months Ended

Dec. 31, 2019

Collateralized Agreements [Abstract]

Summary of the fair value of collateralized transactions

The fair value of the collateralized transactions at December 31, 2019 and December 31, 2018 are summarized as follows:



(in thousands)	December 31, 2019		December 31, 2018
Securities received as collateral:
Securities borrowed	$	1,881,005	$	1,361,635
Securities purchased under agreements to resell	142,922		15,475
	$	2,023,927	$	1,377,110

Schedule of financial instruments owned and pledged, where counterparty has right to repledge

Financial instruments owned and pledged, where the counterparty has the right to repledge, at December 31, 2019 and December 31, 2018 consisted of the following:



(in thousands)	December 31, 2019		December 31, 2018
Equities	$	654,366	$	748,846
Exchange traded notes	42,590		42,269
	$	696,956	$	791,115

Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Debt Instrument [Line Items]

Outstanding borrowings and financing capacity or unused available capacity under the Company’s borrowing arrangements



	At December 31, 2019
(in thousands)	Interest Rate	Financing Available		Borrowing Outstanding		Deferred Debt Issuance Cost			Outstanding Borrowings, net
Broker-dealer credit facilities:
Uncommitted facility	2.55%	$	200,000	$	30,000	$	(2,100	)	$	27,900
Committed facility	3.01%	600,000		—		—			—
		$	800,000	$	30,000	$	(2,100	)	$	27,900



	At December 31, 2018
(in thousands)	Interest Rate	Financing Available		Borrowing Outstanding		Deferred Debt Issuance Cost			Outstanding Borrowings, net
Broker-dealer credit facilities:
Uncommitted facility	3.40%	$	200,000	$	10,000	$	(832	)	$	9,168
Committed facility	3.75%	500,000		7,000		(1,040		)	5,960
		$	700,000	$	17,000	$	(1,872	)	$	15,128

Schedule of interest expense on debt



	Years Ended December 31,
(in thousands)	2019		2018		2017
Broker-dealer credit facilities:
Uncommitted facility	$	1,591	$	1,794	$	1,667
Committed facility	454		306		52
	$	2,045	$	2,100	$	1,719

Schedule of aggregate future required principal payments based on terms of loan

As of December 31, 2019, aggregate future required minimum principal payments based on the terms of the long-term borrowings were as follows:



(in thousands)	December 31, 2019
2020	15,000
2021	15,000
2022	15,000
2023	47,225
2024	15,000
Thereafter	1,850,000
Total principal of long-term borrowings	$	1,957,225

Short-Term Credit Facilities

Debt Instrument [Line Items]

Schedule of reconciliation of the senior secured credit facility

The proceeds of these facilities are used to meet margin requirements associated with the products traded by the Company in the ordinary course, and amounts borrowed are collateralized by the Company’s trading accounts with the applicable financial institution.



	At December 31, 2019
	Weighted Average Interest Rate	Financing Available		Borrowing Outstanding
Short-Term Credit Facilities:
Short-term credit facilities (1)	4.22%	$	586,000	$	134,331
		$	586,000	$	134,331



	At December 31, 2018
	Weighted Average Interest Rate	Financing Available		Borrowing Outstanding
Short-Term Credit Facilities:
Short-term credit facilities (1)	5.03%	$	566,000	$	184,608
		$	566,000	$	184,608

(1) Outstanding borrowings are included with Receivables from/ Payables to broker-dealers and clearing organizations within the Consolidated Statements of Financial Condition.

Senior Secured Credit Facility

Debt Instrument [Line Items]

Schedule of reconciliation of the senior secured credit facility

The following summarizes the Company’s long-term borrowings, net of unamortized discount and debt issuance costs, where applicable:



		At December 31, 2019
(in thousands)	Maturity Date	Interest Rate	Outstanding Principal		Discount			Deferred Debt Issuance Cost			Outstanding Borrowings, net
Long-term borrowings:
First Lien Term Loan Facility	March 2026	5.20%	$	1,925,000	$	(6,795	)	$	(32,513	)	$	1,885,692
SBI bonds	January 2023	5.00%	32,225		—			(51		)	32,174
			$	1,957,225	$	(6,795	)	$	(32,564	)	$	1,917,866



		At December 31, 2018
(in thousands)	Maturity Date	Interest Rate	Outstanding Principal		Discount			Deferred Debt Issuance Cost			Outstanding Borrowings, net
Long-term borrowings:
Fourth Amended and Restated Credit Facility	December 2021	5.55%	$	400,000	$	(332	)	$	(6,704	)	$	392,964
Senior Secured Second Lien Notes	June 2022	6.75%	500,000		—			(17,811		)	482,189
SBI bonds	January 2020	5.00%	31,908		—			(24		)	31,884
			$	931,908	$	(332	)	$	(24,539	)	$	907,037

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Summary of fair value measurements measured on a recurring basis

Financial Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2019:



	December 31, 2019
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting			Total Fair Value
Assets
Financial instruments owned, at fair value:
Equity securities	$	600,259	$	1,080,518	$	—	$	—		$	1,680,777
U.S. and Non-U.S. government obligations	106,690		20,847		—		—			127,537
Corporate Bonds	—		171,591		—		—			171,591
Exchange traded notes	243		48,894		—		—			49,137
Currency forwards	—		242,552		—		(211,398		)	31,154
Options	8,538		—		—		—			8,538
	715,730		1,564,402		—		(211,398		)	2,068,734

Financial instruments owned, pledged as collateral:
Equity securities	362,439		291,927		—		—			654,366
Exchange traded notes	12		42,578		—		—			42,590
	362,451		334,505		—		—			696,956

Other Assets
Equity investment	—		—		46,245		—			46,245
Exchange stock	2,721		—		—		—			2,721
	2,721		—		46,245		—			48,966

Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equity securities	1,022,814		1,163,888		—		—			2,186,702
U.S. and Non-U.S. government obligations	39,091		2,713		—		—			41,804
Corporate Bonds	—		244,700		—		—			244,700
Exchange traded notes	15		21,631		—		—			21,646
Currency forwards	—		196,554		—		(196,535		)	19
Options	3,087		—		—		—			3,087
	$	1,065,007	$	1,629,486	$	—	$	(196,535	)	$	2,497,958

Fair value measurements for those items measured on a recurring basis are summarized below as of December 31, 2018:



	December 31, 2018
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Counterparty and Cash Collateral Netting			Total Fair Value
Assets
Financial instruments owned, at fair value:
Equity securities	$	587,680	$	1,022,221	$	—	$	—		$	1,609,901
U.S. and Non-U.S. government obligations	91,466		14,547		—		—			106,013
Corporate Bonds	—		87,500		—		—			87,500
Exchange traded notes	3,396		27,966		—		—			31,362
Currency forwards	—		2,792,373		—		(2,790,242		)	2,131
Options	11,899		—		—		—			11,899
	694,441		3,944,607		—		(2,790,242		)	1,848,806
Financial instruments owned, pledged as collateral:
Equity securities	389,810		359,036		—		—			748,846
U.S. and Non-U.S. government obligations	—		—		—		—			—
Exchange traded notes	6,968		35,301		—		—			42,269
	396,778		394,337		—		—			791,115
Other Assets
Equity investment	—		—		45,856		—			45,856
Exchange stock	2,417		—		—		—			2,417
	2,417		—		45,856		—			48,273

Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equity securities	931,992		1,336,338		—		—			2,268,330
U.S. and Non-U.S. government obligations	112,058		3,054		—		—			115,112
Corporate Bonds	—		40,123		—		—			40,123
Exchange traded notes	371		39,613		—		—			39,984
Currency forwards	—		2,720,749		—		(2,719,954		)	795
Options	11,051		—		—		—			11,051
	$	1,055,472	$	4,139,877	$	—	$	(2,719,954	)	$	2,475,395

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2019:



	December 31, 2019
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents	$	732,164	$	732,164	$	732,164	$	—	$	—
Cash restricted or segregated under regulations and other	41,116		41,116		41,116		—		—
Securities borrowed	1,928,763		1,928,763		—		1,928,763		—
Securities purchased under agreements to resell	143,032		143,032		—		143,032		—
Receivables from broker-dealers and clearing organizations	1,318,584		1,318,584		40,842		1,277,742		—
Total Assets	4,163,659		4,163,659		814,122		3,349,537		—

Liabilities
Short-term borrowings	73,486		75,586		—		75,586		—
Long-term borrowings	1,917,866		1,966,850		—		1,966,850		—
Securities loaned	1,600,099		1,600,099		—		1,600,099		—
Securities sold under agreements to repurchase	340,742		340,742		—		340,742		—
Payables to broker-dealers and clearing organizations	826,750		826,750		49,514		777,236		—
Total Liabilities	$	4,758,943	$	4,810,027	$	49,514	$	4,760,513	$	—

The table below summarizes financial assets and liabilities not carried at fair value on a recurring basis as of December 31, 2018:



	December 31, 2018
					Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash and cash equivalents	$	736,047	$	736,047	$	736,047	$	—	$	—
Securities borrowed	1,399,684		1,399,684		—		1,399,684		—
Securities purchased under agreements to resell	15,475		15,475		—		15,475		—
Receivables from broker-dealers and clearing organizations	1,101,449		1,101,449		71,288		1,030,161		—
Total Assets	3,252,655		3,252,655		807,335		2,445,320		—

Liabilities
Short-term borrowings	15,128		15,128		—		15,128		—
Long-term borrowings	907,037		916,465		—		916,465		—
Securities loaned	1,130,039		1,130,039		—		1,130,039		—
Securities sold under agreements to repurchase	281,861		281,861		—		281,861		—
Payables to broker dealer and clearing organizations	567,441		567,441		1,031		566,410		—
Total Liabilities	$	2,901,506	$	2,910,934	$	1,031	$	2,909,903	$	—

Summary of changes in Level 3 financial instruments measured at fair value on a recurring basis

The following presents the changes in Level 3 financial instruments measured at fair value on a recurring basis:



	Year Ended December 31, 2019
(in thousands)	Balance at December 31, 2018		Purchases		Total Realized and Unrealized Gains / (Losses)		Net Transfers into (out of) Level 3		Settlement		Balance at December 31, 2019		Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2019
Assets
Other assets:
Equity investment	$	45,856	$	—	$	389	$	—	$	—	$	46,245	$	389
Total	45,856		—		389		—		—		46,245		389



	Year Ended December 31, 2018
(in thousands)	Balance at December 31, 2017		Purchases		Total Realized and Unrealized Gains / (Losses)		Net Transfers into (out of) Level 3		Settlement		Balance at December 31, 2018		Change in Net Unrealized Gains / (Losses) on Investments still held at December 31, 2018
Assets
Other assets:
Equity investment	$	40,588	$	—	$	5,268	$	—	$	—	$	45,856	$	5,268
Total	40,588		—		5,268		—		—		45,856		5,268

Summary of netting of certain financial liabilities

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2019 and December 31, 2018:



	December 31, 2019
	Gross Amounts of Recognized Assets		Amounts Offset in the Consolidated Statement of Financial Condition			Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,928,763	$	—		$	1,928,763	$	(1,881,005	)	$	(15,280	)	$	32,478
Securities purchased under agreements to resell	143,032		—			143,032		(142,922		)	—			110
Trading assets, at fair value:
Currency forwards	242,552		(211,398		)	31,154		—			—			31,154
Options	8,538		—			8,538		(8,537		)	—			1
Total	$	2,322,885	$	(211,398	)	$	2,111,487	$	(2,032,464	)	$	(15,280	)	$	63,743



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,600,099	$	—		$	1,600,099	$	(1,552,146	)	$	(15,281	)	$	32,672
Securities sold under agreements to repurchase	340,742		—			340,742		(340,718		)	—			24
Trading liabilities, at fair value:
Currency forwards	196,554		(196,535		)	19		—			—			19
Options	3,087		—			3,087		(3,087		)	—			—
Total	$	2,140,482	$	(196,535	)	$	1,943,947	$	(1,895,951	)	$	(15,281	)	$	32,715



	December 31, 2018
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,399,684	$	—		$	1,399,684	$	(1,361,635	)	$	(8,822	)	$	29,227
Securities purchased under agreements to resell	15,475		—			15,475		(15,475		)	—			—
Trading assets, at fair value:
Currency forwards	2,792,373		(2,790,242		)	2,131		—			—			2,131
Options	11,899		—			11,899		(11,899		)	—			—
Total	$	4,219,431	$	(2,790,242	)	$	1,429,189	$	(1,389,009	)	$	(8,822	)	$	31,358



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,130,039	$	—		$	1,130,039	$	(1,108,461	)	$	(8,822	)	$	12,756
Securities sold under agreements to repurchase	281,861		—			281,861		(281,861		)	—			—
Trading liabilities, at fair value:
Currency forwards	2,720,749		(2,719,954		)	795		—			(792		)	3
Options	11,051		—			11,051		(11,051		)	—			—
Total	$	4,143,700	$	(2,719,954	)	$	1,423,746	$	(1,401,373	)	$	(9,614	)	$	12,759

Summary of netting of certain financial assets

The following tables set forth the gross and net presentation of certain financial assets and financial liabilities as of December 31, 2019 and December 31, 2018:



	December 31, 2019
	Gross Amounts of Recognized Assets		Amounts Offset in the Consolidated Statement of Financial Condition			Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,928,763	$	—		$	1,928,763	$	(1,881,005	)	$	(15,280	)	$	32,478
Securities purchased under agreements to resell	143,032		—			143,032		(142,922		)	—			110
Trading assets, at fair value:
Currency forwards	242,552		(211,398		)	31,154		—			—			31,154
Options	8,538		—			8,538		(8,537		)	—			1
Total	$	2,322,885	$	(211,398	)	$	2,111,487	$	(2,032,464	)	$	(15,280	)	$	63,743



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,600,099	$	—		$	1,600,099	$	(1,552,146	)	$	(15,281	)	$	32,672
Securities sold under agreements to repurchase	340,742		—			340,742		(340,718		)	—			24
Trading liabilities, at fair value:
Currency forwards	196,554		(196,535		)	19		—			—			19
Options	3,087		—			3,087		(3,087		)	—			—
Total	$	2,140,482	$	(196,535	)	$	1,943,947	$	(1,895,951	)	$	(15,281	)	$	32,715



	December 31, 2018
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Assets Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Received			Net Amount
Offsetting of Financial Assets:
Securities borrowed	$	1,399,684	$	—		$	1,399,684	$	(1,361,635	)	$	(8,822	)	$	29,227
Securities purchased under agreements to resell	15,475		—			15,475		(15,475		)	—			—
Trading assets, at fair value:
Currency forwards	2,792,373		(2,790,242		)	2,131		—			—			2,131
Options	11,899		—			11,899		(11,899		)	—			—
Total	$	4,219,431	$	(2,790,242	)	$	1,429,189	$	(1,389,009	)	$	(8,822	)	$	31,358



	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Statement of Financial Condition			Net Amounts of Liabilities Presented in the Consolidated Statement of Financial Condition
								Gross Amounts Not Offset in the Consolidated Statement of Financial Condition
(in thousands)								Financial Instruments			Cash Collateral Pledged			Net Amount
Offsetting of Financial Liabilities:
Securities loaned	$	1,130,039	$	—		$	1,130,039	$	(1,108,461	)	$	(8,822	)	$	12,756
Securities sold under agreements to repurchase	281,861		—			281,861		(281,861		)	—			—
Trading liabilities, at fair value:
Currency forwards	2,720,749		(2,719,954		)	795		—			(792		)	3
Options	11,051		—			11,051		(11,051		)	—			—
Total	$	4,143,700	$	(2,719,954	)	$	1,423,746	$	(1,401,373	)	$	(9,614	)	$	12,759

Summary of gross obligations for repurchase agreement and securities borrowed transactions by remaining contractual maturity and class of collateral pledged



	December 31, 2019
	Remaining Contractual Maturity
(in thousands)	Overnight and Continuous		Less than 30 days		30 - 60 days		61 - 90 Days		Total

Securities sold under agreements to repurchase:
Equity securities	$	—	$	75,000	$	50,000	$	150,000	$	275,000
U.S. and Non-U.S. government obligations	65,742		—		—		—		65,742
Total	65,742		75,000		50,000		150,000		340,742

Securities loaned:
Equity securities	1,600,099		—		—		—		1,600,099
Total	$	1,600,099	$	—	$	—	$	—	$	1,600,099



	December 31, 2018
	Remaining Contractual Maturity
(in thousands)	Overnight and Continuous		Less than 30 days		30 - 60 days		61 - 90 Days		Total

Securities sold under agreements to repurchase:
Equity securities	$	—	$	45,000	$	65,000	$	160,000	$	270,000
U.S. and Non-U.S. government obligations	11,861		—		—		—		11,861
Total	11,861		45,000		65,000		160,000		281,861

Securities loaned:
Equity securities	1,130,039		—		—		—		1,130,039
Total	$	1,130,039	$	—	$	—	$	—	$	1,130,039

Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value of derivative instruments on a gross basis

The fair value of the Company’s derivative instruments on a gross basis consisted of the following at December 31, 2019 and December 31, 2018:



(in thousands)		December 31, 2019					December 31, 2018
Derivatives Assets	Financial Statements Location	Fair Value			Notional		Fair Value			Notional
Derivative instruments not designated as hedging instruments:
Equities futures	Receivables from broker-dealers and clearing organizations	$	(1,366	)	$	4,502,017	$	(15,382	)	$	2,891,606
Commodity futures	Receivables from broker-dealers and clearing organizations	40,656			7,758,974		69,235			11,595,215
Currency futures	Receivables from broker-dealers and clearing organizations	(2,860		)	1,116,246		(9,432		)	3,756,914
Fixed income futures	Receivables from broker-dealers and clearing organizations	47			155,697		(28		)	18,694
Options	Financial instruments owned	8,538			442,808		11,899			659,101
Currency forwards	Financial instruments owned	242,552			24,369,818		2,792,373			171,288,432
Interest rate swap	Other assets	8,976			525,000		—			—

Derivatives Liabilities	Financial Statements Location	Fair Value			Notional		Fair Value			Notional
Derivative instruments not designated as hedging instruments:
Equities futures	Payables to broker-dealers and clearing organizations	$	751		$	83,803	$	468		$	106,487
Commodity futures	Payables to broker-dealers and clearing organizations	(45,175		)	3,604,979		(375		)	54,782
Currency futures	Payables to broker-dealers and clearing organizations	(23,223		)	6,594,991		(30,643		)	6,239,725
Fixed income futures	Payables to broker-dealers and clearing organizations	94			190,938		93			8,591
Options	Financial instruments sold, not yet purchased	3,087			436,422		11,051			608,756
Currency forwards	Financial instruments sold, not yet purchased	196,554			24,346,818		2,720,749			171,252,224

Derivative instruments designated as hedging instruments:
Currency forwards	Financial instruments sold, not yet purchased	—			—		(792		)	13,501

Schedule of net gain (loss) from derivative instruments not designated as hedging instruments



		Years Ended December 31,
(in thousands)	Financial Statements Location	2019			2018			2017
Derivative instruments not designated as hedging instruments:
Futures	Trading income, net	$	247,619		$	(309,598	)	$	290,609
Currency forwards	Trading income, net	(44,293		)	174,310			2,603
Options	Trading income, net	19,692			(6,161		)	(7,166		)
Interest rate swap (1)	Other, net	8,976			—			—
		$	231,994		$	(141,449	)	$	286,046

Derivative instruments designated as hedging instruments:
Foreign exchange - forward contract	Accumulated other comprehensive income	$	—		$	63		(642		)

Revenues from Contracts with Customers (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue



	Year Ended December 31, 2019
(in thousands)	Market Making		Execution Services		Corporate		Total
Revenues from contracts with customers:
Commissions, net	$	23,526	$	357,401	$	—	$	380,927
Workflow technology	—		82,610		—		82,610
Analytics	—		35,007		—		35,007
Total revenue from contracts with customers	23,526		475,018		—		498,544

Other sources of revenue	1,008,546		18,890		4,102		1,031,538

Total revenues	1,032,072		493,908		4,102		1,530,082

Timing of revenue recognition:
Services transferred at a point in time	1,032,072		427,721		4,102		1,463,895
Services transferred over time	—		66,187		—		66,187
Total revenues	$	1,032,072	$	493,908	$	4,102	$	1,530,082



	Year Ended December 31, 2018
(in thousands)	Market Making		Execution Services		Corporate			Total
Revenues from contracts with customers:
Commissions, net	$	28,813	$	150,206	$	—		$	179,019
Technology services	—		5,320		—			5,320
Total revenue from contracts with customers	28,813		155,526		—			184,339

Other sources of revenue	1,355,662		340,807		(2,090		)	1,694,379

Total revenues	1,384,475		496,333		(2,090		)	1,878,718

Timing of revenue recognition:
Services transferred at a point in time	1,384,475		491,013		(2,090		)	1,873,398
Services transferred over time	—		5,320		—			5,320
Total revenues	$	1,384,475	$	496,333	$	(2,090	)	$	1,878,718

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Summary of income before income taxes

Income before income taxes and noncontrolling interest is as follows for the years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
	2019			2018		2017
(in thousands)
U.S. operations	$	(103,080	)	$	659,937	$	70,484
Non-U.S. operations	(12,902		)	36,426		42,680
	$	(115,982	)	$	696,363	$	113,164

Summary of provision for income taxes

The provision for income taxes consists of the following for the years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
(in thousands)	2019			2018			2017
Current provision (benefit)
Federal	$	(1,861	)	$	49,047		$	(9,991	)
State and Local	4,362			18,697			65
Foreign	3,675			4,276			1,219
Deferred provision (benefit)
Federal	(13,422		)	4,986			106,415
State and Local	(1,455		)	(1,599		)	(3,380		)
Foreign	(3,576		)	764			(62		)
Provision for income taxes	$	(12,277	)	$	76,171		$	94,266

Schedule of reconciliation of the tax provision at U.S. Federal Statutory Rate to the provision for income taxes

The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the

years ended December 31, 2019, 2018 and 2017:



	For the Year Ended December 31,
	2019		2018		2017
(in thousands, except percentages)
Tax provision at the U.S. federal statutory rate	21.0	%	21.0	%	35.0	%
Less: rate attributable to noncontrolling interest	(8.1	)%	(10.2	)%	(19.1	)%
State and local taxes, net of federal benefit	2.4	%	1.9	%	(1.9	)%
Impact of 2017 Tax Act on deferred tax assets	—	%	—	%	80.1	%
Impact of 2017 Tax Act on tax receivable agreement obligation	—	%	—	%	(12.9	)%
Non-deductible expenses, net	(3.7	)%	(0.3	)%	1.9	%
Other, net	(1.0	)%	(1.5	)%	0.2	%
Effective tax rate	10.6	%	10.9	%	83.3	%

Schedule of components of deferred tax assets and liabilities

The components of the deferred tax assets and liabilities as of December 31, 2019, and 2018 are as follows:



	December 31,
(in thousands)	2019			2018
Deferred income tax assets
Tax Receivable Agreement	$	197,598		$	167,117
Share-based compensation	15,572			9,419
Intangibles	2,467			12,738
Fixed assets and other	44,908			21,088
Tax credits and net operating loss carryforwards	86,420			44,972
Less: Valuation allowance on net operating loss carryforwards and tax credits	(60,594		)	(44,947		)
Total deferred income tax assets	$	286,371		$	210,387

Deferred income tax liabilities
Intangibles	71,700			10,028
Total deferred income tax liabilities	$	71,700		$	10,028

Summary of reconciliation of the beginning and ending amount of unrecognized tax benefits



(in thousands)
Balance at December 31, 2016	$	—
Increase from Acquisition of KCG	7,232
Decreases based on tax positions related to prior period	—
Increase based on tax positions related to current period	68
Balance at December 31, 2017	7,300
Decreases based on tax positions related to prior period	(840		)
Increase based on tax positions related to current period	868
Balance at December 31, 2018	7,328
Increase from ITG Acquisition	2,713
Decreases based on tax positions related to prior period	(1,263		)
Increase based on tax positions related to current period	—
Balance at December 31, 2019	$	8,778

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Lease assets and liabilities

Lease assets and liabilities are summarized as follows:



(in thousands)	Financial Statement Location	December 31, 2019
Operating leases
Operating lease right-of-use assets	Operating lease right-of-use assets	$	314,526
Operating lease liabilities	Operating lease liabilities	365,364

Finance leases
Property and equipment, at cost	Property, equipment, and capitalized software, net	37,589
Accumulated depreciation	Property, equipment, and capitalized software, net	(24,579		)
Finance lease liabilities	Accounts payable, accrued expenses, and other liabilities	13,371

Lease term, discount rate and components of lease expense

Weighted average remaining lease term and discount rate are as follows:



	December 31, 2019
Weighted average remaining lease term
Operating leases	7.50 years
Finance leases	1.45 years
Weighted average discount rate
Operating leases	5.70	%
Finance leases	3.52	%

The components of lease expense were as follows:



(in thousands)	Year Ended December 31, 2019
Operating lease cost:
Fixed	$	72,714
Variable	8,333
Impairment of ROU Asset	27,104
Total Operating lease cost	108,151

Finance lease cost:
Amortization of right-of-use assets	12,565
Interest on lease liabilities	661
Total Finance lease cost	13,226

Sublease income	12,590

Future minimum lease payments under operating leases

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of December 31, 2019, are as follows:



(in thousands)	Operating Leases			Finance Leases
2020	$	76,118		$	10,929
2021	73,062			3,305
2022	66,850			565
2023	63,676			—
2024	32,144			—
2025 and thereafter	141,371			—
Total lease payments	453,221			14,799
Less imputed interest	(87,857		)	(1,428		)
Total lease liability	$	365,364		$	13,371

Future minimum lease payments under finance leases

Future minimum lease payments under operating and finance leases with non-cancelable lease terms, as of December 31, 2019, are as follows:



(in thousands)	Operating Leases			Finance Leases
2020	$	76,118		$	10,929
2021	73,062			3,305
2022	66,850			565
2023	63,676			—
2024	32,144			—
2025 and thereafter	141,371			—
Total lease payments	453,221			14,799
Less imputed interest	(87,857		)	(1,428		)
Total lease liability	$	365,364		$	13,371

Future minimum lease payments under operating leases

Future lease payments under non-cancelable leases and sublease receipts as of December 31, 2018 are as follows:



(thousands)	Capital		Operating		Subleases
2019	$	21,983	$	32,755	$	(8,979	)
2020	11,283		30,473		(9,324		)
2021	1,651		25,564		(8,844		)
2022	—		22,710		(8,552		)
2023	—		21,456		(8,695		)
Thereafter	—		113,779		(36,312		)
Total minimum lease payments	$	34,917	$	246,737	$	(80,706	)

Future minimum lease payments under capital leases

Future lease payments under non-cancelable leases and sublease receipts as of December 31, 2018 are as follows:



(thousands)	Capital		Operating		Subleases
2019	$	21,983	$	32,755	$	(8,979	)
2020	11,283		30,473		(9,324		)
2021	1,651		25,564		(8,844		)
2022	—		22,710		(8,552		)
2023	—		21,456		(8,695		)
Thereafter	—		113,779		(36,312		)
Total minimum lease payments	$	34,917	$	246,737	$	(80,706	)

Future minimum lease receivables under subleases

Future lease payments under non-cancelable leases and sublease receipts as of December 31, 2018 are as follows:



(thousands)	Capital		Operating		Subleases
2019	$	21,983	$	32,755	$	(8,979	)
2020	11,283		30,473		(9,324		)
2021	1,651		25,564		(8,844		)
2022	—		22,710		(8,552		)
2023	—		21,456		(8,695		)
Thereafter	—		113,779		(36,312		)
Total minimum lease payments	$	34,917	$	246,737	$	(80,706	)

Cash (Tables)

12 Months Ended

Dec. 31, 2019

Cash and Cash Equivalents [Abstract]

Reconciliation of cash and cash equivalents



(in thousands)	December 31, 2019		December 31, 2018
Cash and cash equivalents	$	732,164	$	729,547
Cash restricted or segregated under regulations and other	41,116		6,500
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	773,280	$	736,047

Restrictions on cash and cash equivalents



(in thousands)	December 31, 2019		December 31, 2018
Cash and cash equivalents	$	732,164	$	729,547
Cash restricted or segregated under regulations and other	41,116		6,500
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	773,280	$	736,047

Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of stock options activity

The following table summarizes activity related to stock options for the years ended December 31, 2019, 2018 and 2017:



	Options Outstanding					Options Exercisable
	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Number of Options		Weighted Average Exercise Price Per Share
At December 31, 2016	8,234,000		$	19.00	8.29	2,058,000		$	19.00
Granted	—		—		—	—		—
Exercised	—		—		—	—		—
Forfeited or expired	(496,000	)	—		—	—		—
At December 31, 2017	7,738,000		19.00		7.29	3,869,000		19.00
Granted	—		—		—	—		—
Exercised	(4,168,100	)	19.00		—	—		19.00
Forfeited or expired	(83,750	)	—		—	—		—
At December 31, 2018	3,486,150		19.00		6.30	1,660,400		19.00
Granted	156,129		13.60		4.37	156,129		13.60
Exercised	(353,500	)	19.00		—	(353,500	)	19.00
Forfeited or expired	(55,000	)	—		—	—		—
At December 31, 2019	3,233,779		$	18.74	5.24	3,248,779		$	18.74

Schedule of activity related to restricted stock units

The following table summarizes activity related to the RSUs (including the Assumed Awards):



	Number of Shares		Weighted Average Fair Value
At December 31, 2016	1,573,441		$	18.28
Granted	64,402		18.09
Exercised	(258,250	)	18.40
Forfeited or expired	(526,546	)	18.75
At December 31, 2017	853,047		17.94
Granted	1,265,899		20.89
Forfeited	(127,493	)	18.30
Vested	(612,531	)	18.76
At December 31, 2018	1,378,922		20.03
Granted	4,063,541		25.07
Forfeited	(643,709	)	21.58
Vested	(1,805,265	)	24.08
At December 31, 2019	2,993,489		$	24.10

Property, Equipment and Capitalized Software (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Schedule of property, equipment and capitalized software

Property, equipment and capitalized software consisted of the following at December 31, 2019 and December 31, 2018:



(in thousands)	2019			2018
Capitalized software costs	$	143,748		$	108,220
Leasehold improvements	71,981			67,995
Furniture and equipment	357,589			260,825
Total	573,318			437,040
Less: Accumulated depreciation and amortization	(457,229		)	(323,718		)
Total property, equipment and capitalized software, net	$	116,089		$	113,322

Regulatory Requirement (Tables)

12 Months Ended

Dec. 31, 2019

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Schedule of regulatory capital and regulatory capital requirements

The regulatory net capital balances and regulatory capital requirements applicable to these subsidiaries as of December 31, 2019 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Canada
Virtu ITG Canada Corp	$	13,029	$	193	$	12,836
TriAct Canada Marketplace LP	2,538		193		2,345
Virtu Financial Canada ULC	2,459		193		2,266
Ireland
Virtu ITG Europe Limited	54,129		32,484		21,645
Virtu Financial Ireland Limited	78,385		43,233		35,152
United Kingdom
Virtu ITG UK Limited	1,378		991		387
Asia Pacific
Virtu ITG Australia Limited	24,574		8,451		16,123
Virtu ITG Hong Kong Limited	3,805		539		3,266
Virtu ITG Singapore Pte Limited	1,179		72		1,107

The regulatory capital and regulatory capital requirements of the U.S broker-dealer subsidiaries as of December 31, 2019 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Virtu Americas LLC	$	257,452	$	2,571	$	254,881
Virtu Financial BD LLC	30,317		1,000		29,317
Virtu Financial Capital Markets LLC	3,710		1,000		2,710
Virtu ITG LLC	66,069		1,000		65,069
Virtu Alternet Securities LLC	1,931		100		1,831

The regulatory capital and regulatory capital requirements of the U.S. broker-dealer subsidiaries as of December 31, 2018 were as follows:



(in thousands)	Regulatory Capital		Regulatory Capital Requirement		Excess Regulatory Capital
Virtu Americas LLC	$	381,211	$	2,035	$	379,176
Virtu Financial BD LLC	133,850		1,000		132,850
Virtu Financial Capital Markets LLC	9,457		1,000		8,457

Geographic Information and Business Segments (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Schedule of total revenues by geographic area

The following table presents total revenues by geographic area for the years ended December 31, 2019, 2018 and 2017:



	Years Ended December 31,
(in thousands)	2019			2018		2017
Revenues:
United States (1)	$	1,146,104		$	1,644,641	$	791,044
Ireland	188,154			81,531		97,637
United Kingdom	(1,735		)	15,681		21,143
Singapore	109,761			136,161		113,891
Canada	49,666			—		—
Australia	34,933			—		—
Others	3,199			704		4,267
Total revenues	$	1,530,082		$	1,878,718	$	1,027,982

Schedule of revenues, income (loss) before income taxes (“Pre-tax earnings”) and total assets by segment

The Company’s total revenues and income before income taxes and noncontrolling interest (“Pre-tax earnings”) by segment for the years ended December 31, 2019, 2018 and 2017 are summarized in the following table:



(in thousands)	Market Making		Execution Services			Corporate			Consolidated Total
2019
Total revenue	$	1,032,072	$	493,908		$	4,102		$	1,530,082
Income before income taxes and noncontrolling interest	109,189		(126,930		)	(98,241		)	(115,982		)

2018
Total revenue	1,384,475		496,333			(2,090		)	1,878,718
Income (loss) before income taxes and noncontrolling interest	422,648		325,043			(51,328		)	696,363

2017
Total revenue	836,707		99,135			92,140			1,027,982
Income (loss) before income taxes and noncontrolling interest	74,633		(12,519		)	51,050			113,164

Parent Company (Tables)

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Statements of Financial Condition

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Financial Condition



	As of December 31,
(In thousands except interest data)	2019			2018
Assets
Cash	$	4,650		$	3,841
Deferred tax asset	197,792			189,627
Investment in subsidiary	2,689,026			1,730,867
Other assets	33,653			35,998
Total assets	$	2,925,121		$	1,960,333

Liabilities, redeemable membership interest and equity
Liabilities
Payable to affiliate	$	1,724,465		$	694,028
Accounts payable and accrued expenses and other liabilities	—			6
Tax receivable agreement obligations	269,282			214,403
Total liabilities	$	1,993,747		$	908,437

Virtu Financial Inc. Stockholders' equity
Class A common stock (par value $0.00001), Authorized — 1,000,000,000 and 1,000,000,000 shares, Issued — 120,435,912 and 108,955,048 shares, Outstanding — 118,257,141 and 106,776,277 shares at December 31, 2019 and December 31, 2018, respectively	1			1
Class B common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 0 and 0 shares at December 31, 2019 and December 31, 2018, respectively	—			—
Class C common stock (par value $0.00001), Authorized — 90,000,000 and 90,000,000 shares, Issued and Outstanding — 12,887,178 and 13,749,886 shares at December 31, 2019 and December 31, 2018, respectively	—			—
Class D common stock (par value $0.00001), Authorized — 175,000,000 and 175,000,000 shares, Issued and Outstanding — 60,091,740 and 69,091,740 shares at December 31, 2019 and December 31, 2018, respectively	1			1
Treasury stock, at cost, 2,178,771 and 2,178,771 shares at December 31, 2019 and December 31, 2018, respectively	(55,005		)	(55,005		)
Additional paid-in capital	1,075,779			1,010,468
Retained earnings (accumulated deficit)	(88,755		)	96,513
Accumulated other comprehensive income (loss)	(647		)	(82		)
Total Virtu Financial Inc. stockholders' equity	$	931,374		$	1,051,896

Total liabilities and stockholders' equity	$	2,925,121		$	1,960,333

Condensed Statements of Comprehensive Income

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Comprehensive Income



	For the Years Ended December 31,
(in thousands)	2019			2018			2017
Revenues:
Other Income	—			—			86,599
	—			—			86,599

Operating Expenses:
Operations and administrative	3			1			181

Income (loss) before equity in income of subsidiary	(3		)	(1		)	86,418
Equity in income (loss) of subsidiary, net of tax	(29,416		)	620,193			(83,479		)
Net income (loss)	$	(29,419	)	$	620,192		$	2,939
Net income (loss) attributable to common stockholders	(29,419		)	620,192			2,939
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes	(565		)	(3,073		)	3,243
Comprehensive income (loss)	$	(29,984	)	$	617,119		$	6,182

Condensed Statements of Cash Flows

Virtu Financial, Inc.

(Parent Company Only)

Condensed Statements of Cash Flows



	For the Years Ended December 31,
(in thousands)	2019			2018			2017
Cash flows from operating activities
Net income	$	(29,419	)	$	620,192		$	2,939

Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of subsidiary, net of tax	136,878			(305,936		)	(513,601		)
Tax receivable agreement obligation reduction	54,879			79,722			(86,599		)
Deferred taxes	(8,165		)	(64,996		)	102,973
Other	—			—			(8,500		)
Changes in operating assets and liabilities:	2,339			(25,268		)	(8,832		)
Net cash provided by (used in) operating activities	156,512			303,714			(511,620		)

Cash flows from investing activities
Acquisition of KCG, net of cash acquired, described in Note 3	—			—			(23,908		)
Investments in subsidiaries, equity basis	70,762			34,909			16,846
Net cash provided by (used in) investing activities	70,762			34,909			(7,062		)

Cash flows from financing activities
Distribution from Virtu Financial to non-controlling interest	(99,221		)	(206,903		)	(89,563		)
Dividends	(112,414		)	(100,329		)	(63,814		)
Payments on repurchase of non-voting common interest	—			—			(11,143		)
Repurchase of Class C common stock	(196		)	(8,216		)	—
Purchase of treasury stock	(14,259		)	(66,218		)	(2,683		)
Tax receivable agreement obligations	—			(12,359		)	(7,045		)
Issuance of common stock, net of offering costs	—			—			735,974
Issuance of common stock in connection with secondary offering, net of offering costs	(375		)	(950		)	—
Net cash provided by (used in) financing activities	$	(226,465	)	$	(394,975	)	$	561,726

Net increase (decrease) in Cash	$	809		$	(56,352	)	$	43,044
Cash, beginning of period	3,841			60,193			17,149
Cash, end of period	$	4,650		$	3,841		$	60,193

Supplemental disclosure of cash flow information:
Taxes paid	$	—		$	—		$	133

Non-cash financing activities
Tax receivable agreement described in Note 6	—			—			1,534

Organization and Basis of Presentation (Details) $ / shares in Units, instrument in Thousands, $ in Billions		12 Months Ended
	Mar. 01, 2019 USD ($) $ / shares	Dec. 31, 2019 instrument country segment venue
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Number of financial instruments \| instrument		25
Number of venues \| venue		235
Number of countries in which entity operates \| country		36
Company’s product offering in number of counties (over) \| country		50
Number of operating segments \| segment		2
Number of non-operating segments \| segment		1
ITG
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Acquisition value (in dollars per share) \| $ / shares	$ 30.30
Total cash consideration \| $	$ 1.0
Virtu Financial
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Ownership interest		62.20%

Summary of Significant Accounting Policies - Securities Borrowed and Securities Loaned (Details)	12 Months Ended
	Dec. 31, 2019
Accounting Policies [Abstract]
Minimum initial collateral advanced or received expressed as a percentage of fair value of the underlying securities borrowed or loaned	102.00%

Summary of Significant Accounting Policies - Property and Equipment (Details) - Furniture and equipment	12 Months Ended
	Dec. 31, 2019
Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years

Summary of Significant Accounting Policies - Capitalized Software (Details) - Capitalized software	12 Months Ended
	Dec. 31, 2019
Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	1 year 6 months
Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years

Summary of Significant Accounting Policies - Goodwill (Details) - USD ($)		12 Months Ended
	Jul. 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0

Summary of Significant Accounting Policies - Share-Based Compensation (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Number of days prior to the grant that common stock and restricted stock units fair value is determined based on	3 days
Class A
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001

Summary of Significant Accounting Policies - Variable Interest Entities (Details) $ in Thousands	1 Months Ended
	Oct. 31, 2016 party	Dec. 31, 2019 USD ($) joint_venture	Dec. 31, 2018 USD ($)
Variable Interest Entity [Line Items]
Number of joint ventures considered as VIEs \| joint_venture		4
Equity investment, Carrying Amount, Asset		$ 28,579	$ 18,254
Equity investment, Carrying Amount, Liability		0	0
Equity investment, Maximum Exposure to Loss		28,579	18,254
Equity investment, VIEs' assets		$ 119,051	$ 49,450
JV building microwave communication networks in US and Asia
Variable Interest Entity [Line Items]
Number of other investors in JV \| party	9
Ownership of voting shares of JV held be each investor (as a percent)		10.00%
Ownership of equity of JV held be each investor (as a percent)		10.00%
JV building microwave communication networks in US and Europe
Variable Interest Entity [Line Items]
Ownership of voting shares (as a percent)		50.00%
Ownership interest		50.00%
JV offering derivatives trading technology and execution services
Variable Interest Entity [Line Items]
Ownership interest		10.00%
JV developing a member-owned equities exchange with the goal of increasing competition
Variable Interest Entity [Line Items]
Ownership interest		21.40%

ITG Acquisition - Background (Details) - USD ($)	Oct. 09, 2019	Mar. 01, 2019
Committed facility
Business Acquisition [Line Items]
Maximum borrowing capacity		$ 50,000,000.0
Letter of credit
Business Acquisition [Line Items]
Maximum borrowing capacity		5,000,000.0
Swingline subfacility
Business Acquisition [Line Items]
Maximum borrowing capacity		5,000,000.0
First lien term loan
Business Acquisition [Line Items]
Face amount		1,500,000,000.0
Proceeds from borrowings		404,500,000
First lien term loan \| ITG
Business Acquisition [Line Items]
Proceeds from borrowings		$ 1,095,000,000.0
VFH \| First Lien Term Loan Facility
Business Acquisition [Line Items]
Proceeds from borrowings	$ 525,000,000.0

ITG Acquisition - Accounting Treatment of the ITG Acquisition (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
ITG
Business Acquisition [Line Items]
Employee compensation expense	$ 17.6

ITG Acquisition - Purchase Price and Goodwill (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 01, 2019	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill		$ 1,148,926	$ 836,583
ITG
Business Acquisition [Line Items]
Total cash consideration	$ 1,000,000
Acquisition value (in dollars per share)	$ 30.30
Goodwill	$ 357,334	$ 312,343

ITG Acquisition - Estimated Fair Values (Details) - USD ($) $ in Thousands	10 Months Ended
	Dec. 31, 2019	Mar. 01, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 1,148,926		$ 836,583
ITG
Business Acquisition [Line Items]
Cash and equivalents	197,072	$ 197,072
Cash and securities segregated under federal regulations	14,232	14,232
Securities borrowed	13,182	13,182
Receivables from broker dealers and clearing organizations	328,112	328,112
Financial instruments owned, at fair value	523	523
Receivables from customers	122,697	122,697
Property, equipment and capitalized software (net)	46,408	46,408
Intangibles	517,200	479,600
Deferred tax assets	17,605	17,221
Operating lease right-of-use assets	100,285	87,236
Other assets	31,652	31,653
Total Assets	1,388,968	1,337,936
Short-term borrowings	18,651	18,651
Securities loaned	17,663	17,663
Payables to broker dealers and clearing organizations	152,043	152,043
Payables to customers	116,419	116,419
Financial instruments sold, not yet purchased, at fair value	11	11
Accounts payable and accrued expenses and other liabilities	178,893	172,727
Operating lease liabilities	99,693	104,983
Deferred tax liabilities	71,053	65,888
Total Liabilities	654,426	648,385
Total identified assets acquired, net of assumed liabilities	734,542	689,551
Goodwill	312,343	357,334
Total Purchase Price	1,046,885	$ 1,046,885
Measurement Period
Intangibles	37,600
Deferred tax assets	384
Operating lease right-of-use assets	13,049
Other assets	(1)
Total Assets	51,032
Accounts payable and accrued expenses and other liabilities	6,166
Operating lease liabilities	(5,290)
Deferred tax liabilities	5,165
Total Liabilities	6,041
Total identified assets acquired, net of assumed liabilities	44,991
Goodwill	$ (44,991)

ITG Acquisition - Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Mar. 01, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Intangible assets	$ 529,638		$ 83,989
Goodwill	1,148,926		836,583
Customer relationships
Business Acquisition [Line Items]
Intangible assets	440,144		$ 43,095
Trade names
Business Acquisition [Line Items]
Intangible assets	2,600
ITG
Business Acquisition [Line Items]
Intangible assets	517,200
Goodwill	312,343	$ 357,334
Total	829,543
ITG \| Technology
Business Acquisition [Line Items]
Intangible assets	$ 76,000
Amortization Years	5 years
ITG \| Customer relationships
Business Acquisition [Line Items]
Intangible assets	$ 437,600
Amortization Years	10 years
ITG \| Trade names
Business Acquisition [Line Items]
Intangible assets	$ 3,600
Amortization Years	3 years

ITG Acquisition - Assumption of Equity Compensation Plan (Details) - shares	Dec. 31, 2019	Mar. 01, 2019
Assumed Plan \| Class A
Business Acquisition [Line Items]
Shares available for issuance (in shares)	1,230,406	2,497,028

ITG Acquisition - Tax Treatment of the ITG Acquisition (Details) - ITG - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 01, 2019
Business Acquisition [Line Items]
Deferred tax assets	$ 17,605	$ 17,221
Deferred tax liabilities	$ 71,053	$ 65,888

ITG Acquisition - Pro Forma Results (Details) - ITG $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Revenues	$ 347,859
Income (loss) before income taxes	$ (64,917)

ITG Acquisition - Pro Forma Results, Narrative (Details) $ / shares in Units, $ in Millions	Mar. 01, 2019 USD ($) $ / shares
Business Acquisition [Line Items]
Advisory and other professional fees \| $	$ 15.1
ITG
Business Acquisition [Line Items]
Advisory and other professional fees \| $	$ 18.2
Common stock, par value (in dollars per share) \| $ / shares	$ 0.01
Right to receive cash (in dollars per share) \| $ / shares	$ 30.30

ITG Acquisition - Pro Forma Financial Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Revenue	$ 1,530,082	$ 1,878,718	$ 1,027,982
Net income (loss)	(103,705)	620,192	18,898
Net income (loss) available for common stockholders	(58,595)	289,441	$ 2,939
Pro Forma
Business Acquisition [Line Items]
Revenue	1,605,340	2,388,194
Net income (loss)	(94,233)	514,821
Net income (loss) available for common stockholders	$ (53,243)	$ 240,265

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
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Sale of BondPoint - Narrative (Details) - BondPoint - USD ($) $ in Thousands		12 Months Ended
	Jan. 02, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of BondPoint		$ 0	$ 400,192	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of BondPoint	$ 400,192
Transaction costs	8,568
Professional fees	7,100
Compensation expense	1,400
Gain on sale of BondPoint, net of transaction costs	$ 337,550		$ 337,600	$ 86,600

Sale of BondPoint - Summary of Carrying Value and Gain on Sale (Details) - USD ($) $ in Thousands		12 Months Ended
	Jan. 02, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Business assets and liabilities held for sale:
Gain on sale of BondPoint, net of transaction costs		$ 0	$ 335,211	$ 0
BondPoint
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total sale proceeds received		$ 0	400,192	0
BondPoint \| Held for Sale
Business assets and liabilities held for sale:
Receivables from broker dealers and clearing organizations				3,383
Intangibles and other assets				51,687
Liabilities				(728)
Total carrying value of BondPoint				54,342
BondPoint \| Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total sale proceeds received	$ 400,192
Business assets and liabilities held for sale:
Goodwill adjustment allocated to BondPoint	8,300
Gain on sale of BondPoint	337,550		$ 337,600	$ 86,600
Transaction costs	8,568
Gain on sale of BondPoint, net of transaction costs	$ 328,982

Earnings per Share - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Income (loss) before income taxes and noncontrolling interest	$ (115,982)	$ 696,363	$ 113,164
Provision for (benefit from) income taxes	(12,277)	76,171	94,266
Net income (loss)	(103,705)	620,192	18,898
Noncontrolling interest	45,110	(330,751)	(15,959)
Net income (loss) available for common stockholders	$ (58,595)	$ 289,441	$ 2,939

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

Earnings per Share - Basic (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Basic earnings (loss) per share:
Net income (loss) available for common stockholders	$ (58,595)	$ 289,441	$ 2,939
Less: Dividends and undistributed earnings allocated to participating securities	(1,926)	(5,418)	(1,326)
Net income (loss) available for common stockholders, net of dividends and undistributed earnings allocated to participating securities	$ (60,521)	$ 284,023	$ 1,613
Weighted average shares of common stock outstanding:
Outstanding (in shares)	113,918,103	100,875,793	62,579,147
Basic earnings (loss) per share (in dollars per share)	$ (0.53)	$ 2.82	$ 0.03
Class A
Weighted average shares of common stock outstanding:
Outstanding (in shares)	113,918,103	100,875,793	62,579,147

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.