eTrade 2001 Annual Report Download - page 158

Download and view the complete annual report

Please find page 158 of the 2001 eTrade 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.

Page out of 197

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197

Year Ended
December31, 2001
Three MonthsEnded
December31, 2000 Year Ended
September30, 2000 Year Ended
September30, 1999
Options excluded from computation of
diluted income (loss) per share
18,358 19,280 10,371 363
Exercise price ranges:
High $ 58.19 $ 58.75 $ 58.75 $ 58.75
Low $ 8.20 $ 11.78 $ 22.72 $ 26.22
21.REGULATORY REQUIREMENTS
E*TRADE Securities is subject to the Uniform Net Capital Rule (the “Rule”) under the Securities Exchange Act of 1934 administered
by the Securities and Exchange Commission (“SEC”) and the National Association of Securities Dealers Regulation, Inc. (“NASDR”),
which requires the maintenance of minimum net capital. E*TRADE Securities has elected to use the alternative method permitted by
the Rule, which requires that the Company maintain minimum net capital equal to the greater of $250,000 or two percent of aggregate
debit balances arising from customer transactions, as defined. E*TRADE Securities had amounts in relation to the Rule as follows
(dollars in thousands):
December31, 2001 September30, 2000
Net capital $ 240,141 $ 479,036
Percentage of aggregate debit balances 14.0 %
9.2 %
Required net capital $ 34,208 $ 103,747
Excess net capital $ 205,933 $ 375,289
Under the alternative method, a broker-dealer may not repay subordinated borrowings, pay cash dividends or make any unsecured
advances or loans to its parent or employees if such payment would result in net capital of less than 5% of aggregate debit balances or
less than 120% of its minimum dollar amount requirement.
E*TRADE Institutional’ s and E*TRADE Technologies’ brokerage subsidiary companies and the Company’ s international subsidiaries
are also subject to net capital requirements. These companies are located in the United States, Canada, South Africa, Australia,
Europe, and Southeast Asia, and have various and differing capital requirements, all of which were met at December 31, 2001 and
September 30, 2000. For these companies at December 31, 2001, the aggregate net capital is $61.2 million, required net capital is
$27.5 million, and excess net capital is $33.7 million. For these companies at September 30, 2000, the aggregate net capital is
$48.4million, required net capital is $18.5 million and excess net capital is $29.9 million.
ETFC’ s registered broker-dealer subsidiary, ETGAM, is also subject to the Rule and is required to maintain net capital equal to the
greater of $100,000 or 6.67% of aggregate indebtedness, as defined. The Rule also requires that the ratio of aggregate indebtedness to
net capital shall not exceed 15 to 1.
139
Table of Contents
The table below summarizes the minimum capital requirements for the Company’ s U.S. brokerage subsidiary companies (in
thousands):
2002. EDGAR Online, Inc.