INTL FCStone 2012 Annual Report Download - page 27
Download and view the complete annual report
Please find page 27 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 11
PART I
ITEM 1 Business
assets in U.S. Treasury bills and money market mutual funds,
maintains no investment in the general obligations of a sovereign
nation and does not engage in repurchase transactions with
a liated entities.
INTL FCStone (Europe) is subject to certain business rules,
including 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. INTL
FCStone (Europe) currently maintains segregated funds in excess
of all applicable requirements.
Secured Customer Assets
FCStone, LLC maintains customer secured deposits from its
customers funds relating to their trading of futures and options-
on-futures traded on, or subject to the rules of, a foreign board
of trade held with FCStone, LLC. As such, it is subject to CFTC
Regulation 30.7, which requires that such funds 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. As of September30, 2012 , FCStone, LLC maintained
$11.7 million in secured assets in excess of its secured liabilities.
Foreign Operations
e Company operates in a number of foreign jurisdictions,
including Canada, Ireland, the United Kingdom, Argentina,
Brazil, Uruguay, Paraguay, Mexico, Nigeria, Dubai, China,
Australia and Singapore. INTL has established wholly-owned
subsidiaries in Mexico and Nigeria but does not have o ces or
employees in those countries.
FCStone Commodity Services (Europe) Ltd. is domiciled in Ireland
and subject to regulation by the Financial Regulator of Ireland.
INTL FCStone (Europe) is domiciled in the United Kingdom,
and subject to regulation by the United Kingdom Financial
Services Authority.
INTL FCStone Securities, INTL FCStone (Europe) and INTL
Commodities, Inc. each have branch o ces in the United
Kingdom. As a result, their activities are also subject to regulation
by the United Kingdom Financial Services Authority.
In Argentina, the activities of INTL Gainvest and Compania
Inversora Bursatil S.A. Sociedad de Bolsa (“CIBSA”) are subject
to regulation by the Comision de Valores and Merval.
In Brazil, the activities of FCStone do Brasil are subject to
regulation by BM&F Bovespa, and the activities of INTL
FCStone DTVM are regulated by the Brazilian Central Bank
and Securities and Exchange Commission of Brazil
e activities of INTL Commodities DMCC are subject to
regulation by the Dubai Multi Commodities Centre.
FCStone Australia Pty. Ltd. is subject to regulation by the
Australian Securities and Investments Commission.
Business Risks
e Company seeks to mitigate the market and credit risks
arising from its nancial trading activities through an active risk
management program. e principal objective of this program
is to limit trading risk to an acceptable level while maximizing
the return generated on the risk assumed.
e Company has a de ned risk policy which is administered by
the Company’s risk committee, which reports to the Company’s
audit committee. e Company has established speci c exposure
limits for inventory positions in every business, as well as speci c
issuer limits and counterparty limits. ese limits are designed
to ensure that in a situation of unexpectedly large or rapid
movements or disruptions in one or more markets, systemic
nancial distress, the failure of a counterparty or the default of an
issuer, the potential estimated loss will remain within acceptable
levels. e audit committee reviews the performance of the risk
committee on a quarterly basis to monitor compliance with the
established risk policy.