INTL FCStone 2013 Annual Report Download - page 112

INTLFCSTONEINC.Form10K 91
PART II
ITEM 8Financial Statements and Supplementary Data
Future aggregate minimum lease payments under noncancelable operating leases as of September 30, 2013 are as follows:
(in millions)
Year ending September 30,
2014 $ 6.7
2015 5.8
2016 4.5
2017 4.0
2018 3.7
ereafter 10.2
$ 34.9
Purchase Commitments
e Company determines an estimate of contractual purchase
commitments in the ordinary course of business primarily for
the purchase of precious metals. Unpriced contract commitments
have been estimated using September 30, 2013 fair values. e
purchase commitments and other obligations as of September30,
2013 for less than one year, one to three years and three to
ve years were $298.7 million, $6.8 million and $3.4 million,
respectively. ere were $1.6 million purchase commitments and
other obligations after ve years as of September 30, 2013. e
purchase commitments for less than one year will be partially
oset by corresponding sales commitments of $216.6 million.
Exchange Member Guarantees
e Company is a member of various exchanges that trade and
clear futures and option contracts. Associated with its memberships,
the Company may be required to pay a proportionate share of the
nancial obligations of another member who may default on its
obligations to the exchanges. While the rules governing dierent
exchange memberships vary, in general the Company’s guarantee
obligations would arise only if the exchange had previously
exhausted its resources. In addition, any such guarantee obligation
would be apportioned among the other non-defaulting members
of the exchange. Any potential contingent liability under these
membership agreements cannot be estimated. e Company has
not recorded any contingent liability in the consolidated nancial
statements for these agreements and believes that any potential
requirement to make payments under these agreements is remote.
NOTE 13 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 Ltd. is regulated
by the Financial Conduct Authority (“FCA”), 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 Act 2000. 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 FCA as a Payment Institution under the Payment
Services Regulations 2009. e regulations impose regulatory
capital (reported annually), and conduct of business requirements.