INTL FCStone 2014 Annual Report Download - page 22

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INTL FCSTONE INC. Form 10K6
PART I
FCStone, LLC is a registered FCM and a clearing member of all
major U.S. commodity futures exchanges including the Chicago
Mercantile Exchange and its divisions: the Chicago Board of
Trade, the New York Mercantile Exchange and the COMEX
Division; InterContinental Exchange, Inc. (“ICE”) Futures
US, and the Minneapolis Grain Exchange (“MGEX”).
FCStone, LLC is also a member of ICE Europe Ltd. As of
September 30, 2014, FCStone, LLC was the third largest
independent FCM in the United States, as measured by required
customer segregated assets, not affiliated with a major financial
institution or commodity intermediary, end-user or producer.
As of September 30, 2014, FCStone, LLC had $1.8 billion in
required customer segregated assets.
Acquisitions and Disposals during Fiscal Year 2014
Forward Insight Commodities, LLC
On April 2, 2014, we acquired the outstanding member interests
of Forward Insight Commodities, LLC (“FIC”). FIC is a brokerage
firm focused on the structuring and execution of transactions
in the energy derivative space. e consideration to be paid for
the acquisition consists of contingent payments based on the
pre-tax earnings of the business for the twelve month period
following the acquisition and is estimated to be $0.5 million as
of September 30, 2014. e purchase price for the acquisition
is not material to the consolidated financial statements. Our
consolidated financial statements include the operating results
of the acquired business from the date of acquisition.
Completed Exit of Physical Base Metals
Business
During the second quarter of fiscal 2013, as a result of a change
in management strategy in our base metals product line, we
elected to pursue an exit of our physical base metals business
through the sale and orderly liquidation of then-current open
positions. During the following months, we completed a sale of
a portion of the physical base metals open contract positions,
and the liquidation of the majority of the remaining physical
base metals open contract positions and inventory. In July 2013,
we elected to allow the $100.0 million credit facility which
supported this business to expire without renewal. e exit of
the physical base metals business was substantially completed
by the end of fiscal 2013, including the termination of the
physical base metals trading team and certain operational
support personnel. e remaining open contract positions
were fulfilled during the second quarter of fiscal 2014, at which
time we reclassified the physical base metals activities in the
financial statements as discontinued operations. We continue
to operate the component of our base metals business related to
non-physical assets conducted primarily through the London
Metals Exchange.
Acquisitions and Disposals during Fiscal Year 2013
Tradewire Acquisition
In December 2012, we acquired certain institutional accounts
from Tradewire Securities, LLC (“Tradewire Securities”), a
Miami-based securities broker-dealer servicing customers
throughout Latin America and a wholly owned subsidiary of
Tradewire Group Ltd. We transferred these accounts to our
broker-dealer subsidiary, INTL FCStone Securities. As part of
the transaction, we hired more than 20 professional staff from
Tradewire Securities’ securities broker-dealer business based in
Miami, Florida. ese professionals provide global brokerage
services to a wide range of customers, including hedge funds,
pension funds, broker-dealers and banks located in Latin America,
the Caribbean, North America and Europe. is acquisition was
not significant. Our consolidated financial statements include
the operating results of the acquired accounts from the date
of acquisition.
Gletir Agente De Valores S.A. Disposal
In February 2013, we sold all of our ownership interest in
Gletir Agente De Valores S.A., to Gletir Financial Corp, an
non-affiliated third party. Previously the ownership interest was
held by our subsidiaries INTL Netherlands B.V. and Gainvest
Asset Management Ltda.
ITEM 1 Business