INTL FCStone 2012 Annual Report Download - page 103
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Please find page 103 of the 2012 INTL FCStone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.INTL FCSTONE INC.Form10K 87
PART II
ITEM 8 Financial Statements and Supplementary Data
Impairment
e Company recorded an impairment charge of $1.1 million
for the year ended September30, 2010 in connection with
INTL Sieramet LLC, a corporation in which it held a 55%
equity interest. is amount is recorded within ‘bad debts and
impairments’ in the consolidated income statement for the
year ended September30, 2010. e assets of INTL Sieramet
LLC were liquidated and the company was dissolved during
scal 2012, resulting in a reversal of $0.1 million in previously
recorded impairment charges.
NOTE 12 Regulatory Requirements and Subsidiary Dividend Restrictions
e Company’s subsidiary FCStone, LLC is a commodity futures
commission merchant registered with the CFTC servicing
customers primarily in grain, energy and food service-related
businesses. Pursuant to the rules, regulations, and requirements
of the CFTC and other regulatory agencies, FCStone, LLC is
required to maintain certain minimum net capital as de ned in
such rules, regulations, and requirements. Net capital and the
related net capital requirement may uctuate on a daily basis.
FCStone, LLC also has restriction on dividends, which restricts
the withdrawal of equity capital if the planned withdrawal would
reduce net capital, subsequent to haircuts and charges, to an
amount less than 120% of the greatest minimum requirement.
Pursuant to the requirements of the Commodity Exchange Act,
funds deposited by customers of FCStone, LLC relating to their
trading of futures and options-on-futures on a U.S. commodities
exchange must be carried in separate accounts which are designated
as segregated customers’ accounts. Pursuant to the requirements
of the CFTC, funds deposited by customers of FCStone, LLC
relating to their trading of futures and options-on-futures traded
on, or subject to the rules of, a foreign board of trade must be
carried in separate accounts in an amount su cient to satisfy
all of FCStone LLC’s current obligations to customers trading
foreign futures and foreign options on foreign commodity
exchanges or boards of trade, which are designated as secured
customers’ accounts. See Additional Information of FCStone, LLC
Related to Customer Segregated and Secured Funds further below
for additional information regarding FCStone, LLC’s calculation
of segregated and secured customer funds.
e Company’s subsidiary INTL FCStone (Europe) is regulated
by the Financial Services Authority (“FSA”), the regulator of
the nancial services industry in the United Kingdom, as a
Financial Services Firm under part IV of the Financial Services
and Markets Act2000. e regulations impose daily regulatory
capital, as well as conduct of business, governance, and other
requirements. e conduct of business rules include those that
govern the treatment of client money and other assets which
under certain circumstances for certain classes of client must
be segregated from the rm’s own assets.
e Company’s subsidiary INTL Global Currencies Limited is
regulated by the FSA as a Payment Institution under the Payment
Services Regulations 2009. e regulations impose regulatory
capital (reported annually), and conduct of business requirements.
e Company’s subsidiary TRX Futures Limited is regulated
by the FSA as a Financial Services Firm under part IV of the
Financial Services and Markets Act2000, and was subject to a
capital adequacy requirement at September30, 2012. Subsequent
to September30, 2012, the activities of TRX Futures Limited
have been reorganized within INTL FCStone (Europe), and
TRX Futures Limited is in the process of dissolution.
e Company’s subsidiary INTL FCStone Securities Inc. (“INTL
FCStone Securities”) is a registered broker dealer and member
of the Financial Industry Regulatory Authority (“FINRA”) and
is subject to the SEC Uniform Net Capital Rule 15c3-1. is
rule requires the maintenance of minimum net capital, and
requires that the ratio of aggregate indebtedness to net capital
not exceed 15 to 1. A further requirement is that equity capital
may not be withdrawn if this ratio would exceed 10 to 1 after
such withdrawal.
e Company’s subsidiary FCC Investments, Inc. is a registered
broker-dealer and a member of FINRA, and is subject to the
SEC Uniform Net Capital Rule 15c3-1.
e Company’s subsidiary FCStone Australia Pty Ltd (“FCStone
Australia”) is regulated by the Australian Securities and Investment
Commission and is subject to a net tangible asset capital
requirement. FCStone Australia is also regulated by the New
Zealand Clearing Limited, and is subject to a capital adequacy
requirement.
FCStone Commodity Services (Europe), Ltd. is domiciled in
Ireland and subject to regulation by the Financial Regulator of
Ireland, and is subject to a net capital requirement.
INTL FCStone DTVM Ltda. (“INTL FCStone DTVM”) is a
registered broker-dealer and regulated by the Brazilian Central
Bank and Securities and Exchange Commission of Brazil, and is
subject to a capital adequacy requirement of $0.7 million. e
recently acquired INTL FCStone DTVM, a shell company with
no signi cant operations, had net capital lower than the minimum
required amount by less than $0.1 million as of September30,
2012. e Company expects to remediate this shortfall in net
capital of INTL FCStone DTVM for the semi-annual regulatory
ling prepared as of December31, 2012.