FINRA Rule 3130 CEO Annual Certification — 2025 (for the calendar year ended December 31, 2025)

**Certifying officer:** Chief Executive Officer, Kestrel Securities, LLC **Date executed:** February 20, 2026 **Scope of certification:** Calendar year ended December 31, 2025

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Certification

I, the undersigned Chief Executive Officer of Kestrel Securities, LLC (the "Firm"), a FINRA-member broker-dealer, hereby certify that:

1. The Firm has in place processes to establish, maintain, review, test, and modify written compliance policies and written supervisory procedures reasonably designed to achieve compliance with applicable FINRA rules, MSRB rules, and federal securities laws and regulations;

2. The Firm has in place processes to modify such policies and procedures as business, regulatory, and legislative changes and events dictate;

3. I have conducted one or more meetings with the Firm's Chief Compliance Officer in the preceding twelve (12) months to discuss such processes, and have discussed and reviewed the matters set forth in paragraph (2) above;

4. The Firm's processes, with respect to paragraphs (1) and (2) above, are evidenced in a report that I have reviewed in my capacity as Chief Executive Officer, and that has also been reviewed by the Firm's Chief Compliance Officer and by the Chief Financial Officer; and

5. The report has been submitted to the Firm's Board of Directors and to the Audit Committee of the Board.

This certification is executed in accordance with FINRA Rule 3130 (`FINRA-Rule-3110-3130`).

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*Signature on file in the Kestrel corporate records room.*

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Supporting report

1. Executive summary

The calendar year 2025 was a year of substantial remediation activity for Kestrel Securities, driven principally by the two findings identified in the FINRA 2025 routine examination exit letter (`Kestrel-FINRA-Exam-Letter-2025`):

- Finding 1 (FINRA Rule 5310 regular and rigorous review): remediated through a September 2025 rewrite of the Best Execution Policy, a change in committee chairmanship, engagement of an Independent Quantitative Reviewer, and a redesign of the analytics pack. Status at year-end: operational; closing letter anticipated Q2 2026. - Finding 2 (Rule 3110 email supervision sampling): remediated through a Q3 2025 refresh of the surveillance keyword lexicon, restoration of the 3% random-sampling rate per WSP, and a Q4 2025 vendor enhancement to capture per-disposition timestamps. Status at year-end: operational; closing letter anticipated Q2 2026.

Beyond these two findings, the year's principal compliance program developments included the finalization of v2 of the firm's Written Supervisory Procedures — rolled out across the equities, options, and fixed-income desks — and the refresh of the firm's code of ethics and information-barriers policy to reflect the 2025 update to the Kestrel Advisors Marketing Rule review procedures.

2. CEO–CCO meetings during 2025

| Date | Attendees | Topic focus | |---|---|---| | 2025-02-10 | CEO, CCO, General Counsel | FINRA exam kickoff; prior-year 3130 closing | | 2025-04-22 | CEO, CCO, CRO | Finding 1 initial remediation plan | | 2025-06-18 | CEO, CCO | Finding 2 remediation; AML independent test findings | | 2025-09-24 | CEO, CCO, General Counsel | Finalization of Best Execution Policy rewrite and Code of Ethics update | | 2025-12-02 | CEO, CCO, CFO, CRO | Year-end compliance program review; 3130 supporting report preparation |

Each meeting was substantive and addressed specific compliance program processes under FINRA Rule 3130(c)(2). Minutes and agendas are retained in the CEO's office file.

3. Major policy and procedure actions in 2025

| Month | Action | Reference document | |---|---|---| | Jan 2025 | Reg BI disclosure procedures refreshed | `Kestrel-Reg-BI-Disclosure-Procedures` | | Feb 2025 | Market access controls policy rewritten | `Kestrel-Market-Access-Controls` | | Mar 2025 | Information barriers and list policies refreshed | `Kestrel-Information-Barriers` | | Apr 2025 | Code of ethics and personal trading policy rewritten | `Kestrel-Code-of-Ethics` | | Jun 2025 | Marketing Rule review procedures rewritten (Kestrel Advisors) | `Kestrel-Marketing-Rule-Review` | | Jul 2025 | WSP for Equities Trading Desk reissued (v2) | `Kestrel-WSP-Equities` | | Sep 2025 | Best Execution Policy rewritten; committee chair changed | `Kestrel-Best-Execution-Policy` | | Sep 2025 | Reg SHO locate procedures reaffirmed | `Kestrel-Reg-SHO-Locate-Policy` | | Oct 2025 | AML Program refreshed (annual) | `Kestrel-AML-Program` | | Nov 2025 | Error correction policy reissued | `Kestrel-Error-Correction-Policy` |

4. Testing and monitoring activities in 2025

- Best Execution Committee held four quarterly meetings with enhanced analytics in accordance with FINRA Rule 5310 Supplementary Material .02 (`FINRA-Rule-5310`). - Trade surveillance: total alert volume for 2025 was approximately 2,800 alerts; dispositions tracked to closure. See `Kestrel-Trade-Surveillance-Alert-Summary`. - AML independent testing: completed in June 2025 by an external firm. One finding (branch-office OFAC screening cadence); closed in August 2025. See `Kestrel-AML-Program` §6. - Internal inspections: OSJ inspection completed November 2025; four branch-office inspections completed during 2025 (NYC quarterly; Boston under the Remote Inspections Pilot; Chicago and Miami scheduled on three-year cadence). - Rule 15c3-5 annual review: conducted in January 2026 for calendar year 2025 (see `Kestrel-Market-Access-Controls` §5.1). CEO certification under 17 CFR 240.15c3-5(d) executed concurrently with this FINRA Rule 3130 certification. - 15c3-1 net capital: computed daily; no minimum breaches during 2025; monthly FOCUS filings completed on schedule. - 15c3-3 customer reserve: weekly computation; no reserve deficits during 2025. - Books and records retention: 17 CFR 240.17a-4(f) audit-trail representation executed annually by the CTO (January 2026, for 2025).

5. Material changes in business activity during 2025

- No new business lines established. - No change in clearing arrangements (Kestrel continued to self-clear). - Kestrel Advisors AUM grew from approximately $450M to approximately $525M. - Registered representative headcount: net +12 during the year. - The firm did not engage in any material M&A activity.

6. Known issues as of the certification date

- FINRA closing letters for the 2025 examination findings are anticipated in Q2 2026. - An SEC finding on the adviser side regarding the timing irregularity of the Kestrel Advisors Rule 206(4)-2 surprise examination (`17 CFR 275.206(4)-1 and 275.206(4)-2`) remains open; the engagement letter for the 2026 surprise examination has been restructured to ensure materially different month selection across consecutive years.

7. References

- FINRA Rule 3130 (`FINRA-Rule-3110-3130`) - 17 CFR 240.15c3-5 (`17 CFR 240.17a-3, 240.17a-4, 240.15c3-5`) - 17 CFR 240.17a-4 (`17 CFR 240.17a-3, 240.17a-4, 240.15c3-5`) - FINRA Rule 5310 (`FINRA-Rule-5310`) - 31 CFR Part 1023 (`31 CFR Part 1023`) - 17 CFR 275.206(4)-1 and 275.206(4)-2 (`17 CFR 275.206(4)-1 and 275.206(4)-2`) - Kestrel-FINRA-Exam-Letter-2025 - Kestrel-Best-Execution-Policy - Kestrel-Best-Ex-Committee-Minutes-Q1-2026 - Kestrel-Market-Access-Controls - Kestrel-AML-Program - Kestrel-Trade-Surveillance-Alert-Summary