CFTC Form 1-FR-IB Instructions - National Futures Association

National Futures Association, and the `as of' date of, or the time
period covered by, the statement.
If additional space is needed to detail or explain the answer to
a question, the registrant should use a separate sheet of paper,
showing the registrant's name, NFA ID number, `as of' date of the
report, name of the statement to which it is a supplement, and the
number of the line item therein.
Marking Open Positions to Market
In determining "net capital":
1. all unrealized profits must be added and all unrealized
losses must be deducted in an IB's accounts, including
unrealized profits and losses on fixed price commitments and
forward contracts;
2. all long and short commodity options traded on a contract
market, all long and short listed security options, and all long
and short commodity and securities positions must be marked to
the market;
3. the value attributed to any commodity option purchased which
is not traded on a contract market, or an unlisted security
option purchased, is the difference between the option's strike
price and the market value for the underlying physical or
futures contract. In the case of a call option if the market
value for the physical or futures contract is less than the
strike price, it should be given no value. In the case of a put
option, if the market value for the physical or futures contract
is more than the strike price, it should be given no value.
Foreign Currency
Account balances designated in a foreign currency on an IB's
books must be expressed in United States dollars in the Form 1-FR-IB,
converted in accordance with GAAP, at the applicable rate of exchange
(that is, the rate as of the balance sheet date for most items).
Letters of Credit
An IB may not report on its statement of financial condition any
amount for letters of credit received or obtained by the IB. Also, a
letter of credit may not be considered satisfactory collateral for
securing any form of receivable.
Material Adverse Events
Any fact or condition that would have a material adverse effect
on the reporting IB's financial or operational condition must be
reported as a note to the statement of financial condition in order to
make the statement not misleading. Contingent liabilities at the date
of the financial report and actual transactions occurring between the
as of date of the report and the date that it is filed which have a