INTL FCStone 2005 Annual Report Download - page 68

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INTERNATIONAL ASSETS HOLDING CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements—(Continued)
September 30, 2005 and 2004
(18) Capital and Cash Reserve Requirements
INTL Trading is a member of the NASD and is subject to the SEC Uniform Net Capital Rule 15c3-1. This
Rule requires the maintenance of minimum net capital in an amount equal to the greater of $100,000, 6
2
⁄
3
%of
aggregate indebtedness, or $2,500 for each security in which a market is made with a bid price over $5 and
$1,000 for each security in which a market is made with a bid price of $5 or less with a ceiling of $1,000,000,
and requires that the ratio of aggregate indebtedness to net capital not exceed 15 to 1. Equity capital may not be
withdrawn if the resulting net capital ratio would exceed 10 to 1. At September 30, 2005, INTL Trading’s net
capital was approximately $4,521,000 which was approximately $3,521,000 in excess of its minimum
requirement of $1,000,000. Its ratio of aggregate indebtedness to net capital was 1.56 to 1 and the percentage of
debt to debt-equity total computed in accordance with Rule 15c3-1(d) was 26%.
INTL Trading is exempt from SEC Rule 15c3-3 pursuant to the exemptive provision under subparagraph
(k)(2)(ii) and, therefore, is not required to maintain a “Special Reserve Bank Account for the Exclusive Benefit
of Customers”.
(19) Leases
The Company is obligated under various noncancelable operating leases for the rental of office facilities,
service obligations and certain office equipment, and accounts for these lease obligations on a straight line basis.
The expense associated with operating leases amounted to $891,358 and $614,430 (as restated) for the years
ended September 30, 2005 and 2004, respectively. The expenses associated with the operating leases and service
obligations are reported in the statements of operations in occupancy and equipment rental, clearing and related
and other expenses.
Future aggregate minimum lease payments under noncancelable operating leases as of September 30, 2005
are approximately as follows:
Year ending September 30,
2006 ....................................................... $ 758,000
2007 ....................................................... 471,800
2008 ....................................................... 358,300
2009 ....................................................... 298,100
2010 ....................................................... 700
$1,886,900
F-28