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

More documents

Recommendations

Info

STATEMENT OF CHANGES IN LIABILITIES SUBORDINATED TO THE CLAIMS OF GENERAL CREDITORS PURSUANT TO A SATISFACTORY SUBORDINATION AGREEMENT Two columns are shown for each line item. The IB should show in the left column total satisfactory subordinated debt and in the right column the IB should show that portion of subordinated debt that qualifies as equity capital. Equity capital is explained on the next page. Line 1. - Total subordinated borrowings as previously reported The amount reported should reflect the total subordinated debt reported as of the date of the immediately preceding financial report filed with the Commission. Line 2. - Increases Add the amount of any increase in satisfactory subordinated debt during the period and explain fully in the space provided. In the space provided for the date, show the date the funds were received. If the funds were received on a date before or after the agreement was approved by the IB's DSRO, show the approval date as part of the explanations section. Line 3. - Decreases Deduct the amount of any decreases in satisfactory subordinated debt during the period and explain fully in the space provided. The explanation should include whether the decrease was due to maturity, prepayment before maturity, conversion to capital, etc. Rollovers should be reported as both a decrease (maturity) and an increase (new subordinated loan). Subordinated loan prepayments (including conversions of subordinated debt to capital) must be approved by the IB's DSRO prior to the prepayment being made. There may be a decrease in subordinated debt that qualifies as equity capital without a corresponding decrease in total subordinated debt. This will occur when the time to maturity of subordinated debt that previously qualified as equity capital becomes less than one year. In such instance the explanation of the decrease should state that the term to maturity has become less than one year. Line 4. - Balance The total (item 4630) should agree with the amount reported on page 3, line 19.A., of the Statement of Financial Condition.
Equity Capital Equity capital is the total of: A. An IB's ownership equity/partnership capital accounts, and B. that amount of the IB's total satisfactory subordinated debt that qualifies as equity capital. Subordinated debt qualifies as equity capital if it meets the following conditions: A. the subordinated loan agreement was entered into by a partner or stockholder in the IB; B. the subordination agreement has an initial term of at least three years; C. the agreement has a remaining term of at least one year. This means subordinated debt covered by an agreement that matures in the next year no longer qualifies as equity capital, even if it had qualified previously; D. the agreement has no provision for acceleration of its maturity date, as provided in sections 1.17(h)(2)(ix)(A) or 1.17(h)(2)(x)(A) or (B); E. the agreement has no provisions for special prepayment under section 1.17(h)(2)(vii)(B); and F. the funds are in fact maintained as equity capital pursuant to the provision of regulation 1.17(e). See the next page for Debt-Equity Ratio calculation.
Page 1 and 2: ===================================
Page 3 and 4: PUBLIC REPORTING BURDEN Public repo
Page 5 and 6: FORM 1-FR-IB Instructions Where to
Page 7 and 8: FORM 1-FR-IB Instructions Contents
Page 9 and 10: FORM 1-FR-IB Instructions Pertinent
Page 11 and 12: National Futures Association, and t
Page 13 and 14: Unresolved Differences and Amounts
Page 15 and 16: FORM 1-FR-IB Instructions Cover Pag
Page 17 and 18: STATEMENT OF FINANCIAL CONDITION -
Page 19 and 20: Example 1 On 11-28-XX an IB enters
Page 21 and 22: current asset. If the IB has receiv
Page 23 and 24: Affiliates include the IB's parent
Page 25 and 26: In this case, $10,000 of the $24,00
Page 27 and 28: liability may be excluded from tota
Page 29 and 30: qualify for exclusion from liabilit
Page 31 and 32: STATEMENT OF THE COMPUTATION OF THE
Page 33 and 34: Line 5. - Haircuts on cash commodit
Page 35 and 36: Line 7. - Charges against repurchas
Page 37 and 38: Example Assume contract A has a $4,
Page 39 and 40: If a deficiency in SDN collateral e
Page 41: FORM 1-FR-IB Instructions Statement
Page 45 and 46: An IB which has an equity capital d
Page 47 and 48: self-regulatory organization requir
Page 49 and 50: FORM 1-FR-IB Instructions Reporting
Page 51 and 52: FR- IB (Statement of Financial Cond
Page 53 and 54: (B) Any excess market value of the
Page 55 and 56: (ii) 15 years but less than 20 year
Page 57 and 58: Canadian Debt Obligations (C) In th
Page 59 and 60: (ii) Between 5 years and 10 years a
Page 61 and 62: percentage deduction on such excess
Page 63 and 64: the proprietary or other accounts o
Page 65 and 66: (5) Conversion Accounts. Where a br

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

Create successful ePaper yourself

Delete template?

Save as template?