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

amount subject to the charge. The net balances in British pounds,
French francs, Japanese yen, Deutschemarks, Canadian dollars, and
Swiss francs are subject to a 6% charge. (The 6% charge is less than
that strictly called for by Commission regulation 1.17(c)(5)(ii) which
would require an IB to take a 20% charge for uncovered positions.
This relief is also consistent with SEC's interpretation in regard to
such charges.) The net balance in any other currency is subject to a
20% charge.
Example
An IB carries the following balances in British pounds:
British pound bank account 50,000
Amount due U.K. vendors 16,000
Excess of pound assets over liabilities 34,000
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Pounds converted to US dollars @ $1.56/ $53,040
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Charge against net capital @ 6% $ 3,182
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The charge should be reported on page 4, line 5 of the Form 1-
FR-IB.
Line 6. - Haircut on securities held by IB
All marketable securities are to be reflected in the statement of
financial condition at current market value. However, for net capital
computation purposes, securities may not be allowed their full market
value. The IB should show the market value of securities included in
current assets on lines 6.A. through F. under the Market Value column
and the related haircut under the Charge column. All securities owned
by the IB should be included under the Market Value column, even
though there is a zero haircut. Any charges applicable to open
contractual commitments relating to securities transactions should
also be reflected on line 6.
The percentage charges to be applied are found at SEC Rule 15c3-
1(c)(2)(vi), (vii) and (viii). See Appendix B to these instructions.