Submission of Reserve Requirement Computation of Brokers and Dealers

July 6, 1998 PSE MEMO FOR BROKERS NO. 302-98 SUBJECT : Submission of Reserve Requirement Computation of Brokers and Dealers This has reference to paragraph (d) of the RSA Rule 24 (b) 2 requiring every broker or dealer to maintain with a bank a "Special Reserve Bank Account for the Exclusive Benefit of Customers". Please be reminded that the deadline for the quarterly submission of the reserve requirement computations (which must be done either weekly or monthly) is within fifteen (15) days after the end of each quarter . aisadc One copy of the report must be submitted to the Compliance Audit Department of the Compliance and Surveillance Group. Attached is the standard form for the reserve requirement computation for your reference. For your information and guidance. (SGD.) RUBEN L. ALMADRO VP, Compliance & Surveillance Group PSEF-002 Reserve Formula Computation Under RSA Rule 24(b)-3 Name of Broker: _________________________________ Name of Person Completing this Form: _________________ Official Designation: __________________________ Particulars Credits Debits 1. Fee credit bal. and other credit bal. in customers' _________ security accounts 2. Monies borrowed collateralized by securities _________ carried for the account of customers. 3. Monies payable against customers' securities loaned. _________ 4. Customers securities failed to receive. _________ 5. Credit balances in firm accounts which are _________ attributable to principal sales to customer. 6. Market value of stock dividends, stock splits and _________ similar distributions receivable outstanding over 30 calendar days old. 7. Market value of the short security count differences _________ over 30 calendar days old. 8. Market value of short securities and credits (not to _________ be offset by long or by debits) in all suspense accounts over 30 calendar days. 9. Market value of securities which are in transfer in _________ excess of 40 calendar days and have not been confirmed to be in transfer by the transfer agent or the issuer during the 40 days. 10. Debit balances in customers' cash or margin accounts __________ excluding unsecured accounts and accounts doubtful of collection. 11. Securities borrowed to effectuate short sales by __________ customer and securities borrowed to make delivery on customers' securities failed to delivery. 12. Failed to deliver customers sec not older than 30 __________ calendar days. 13. Others ________________ __________ Total __________ __________ For PSE Use Only: PSE CONTROL NUMBER: __________________ Reviewed By: ________________________ Date: _____________ RESERVE FORMULA WORKSHEET (To accompany PSEF OO2) FIRM _______________________________ DATE OF COMPUTATION: ____________ 1. Free Credit Balances and Other Credit Balances in Customer Securities Accounts Unadjusted trial balance amount. P A. Additions: 1. Bank Account Overdrafts/1 2. Credit Balances in customer omnibus accounts 2. Any other customer credit balance not accounted for elsewhere (explain nature) ___________________________ Subtotal B. Deductions: 1. Credit Balances in the accounts of non-customers such as general partners and principal officers 2. Credit balances in customers' cash accounts arising from the sale of a security not delivered if the securities are purchased by the broker-dealer for its own account and have not been resold Subtotal Adjusted total line item #1 2. Monies Borrowed Collateralized by Securities Carried for the Accounts of Customers Unadjusted trial balance amount customer loan Unadjusted trial balance amount commingled loan /2 Adjusted total line item #2 3. Monies Payable Against Securities Loaned Unadjusted trial balance amount A. Additions 1. The amount by which the market value of customers securities loaned exceed the collateral value received from lending of such securities Adjusted total line item #3 4. Customer Securities Failed to Receive (as Determined by Allocation or Specific Identification) Unadjusted Balance: A. Additions 1. The amount by which the market value by which fails to receive outstanding for more than 34 calendar days exceed their contract value/ 3 2. Clearing Accounts with net credit balances attributable to customers' transactions (Clearing Corporations) 3. Unsecured customer short positions which allocate to customer long positions/ 4 4. Any other credit not accounted for elsewhere in the formula Subtotal Adjusted total line item # 4 5. Credit balances in Firm Accounts which are Attributable to Principal Sales to Customers/ 5 6. Market Value of Stock Dividends and Splits Outstanding Over 30 calendar days / 5 / 6 7. Market Value of Short Security Count Differences over 30 calendar days old (not to be offset by long count differences) 8. Market Value of Short Securities and Credits (not to be offset by longs or debits) in all Suspense Accounts over 30 calendar days old. 1. Credit Balances Only 2. Security Positions Only / 5 3. Security Positions with Related Balances /5 /7 Adjusted total line item #8 9. Market Value of Securities in Transfer in Excess of 40 Calendar Days which have not been confirmed to be in transfer by the Transfer Agent or the Issuer during 40 days Aggregate Credit Items P 10. Debit Balances in customers' cash and margin accounts excluding unsecured Accounts and Accounts Doubtful of Collection Unadjusted trial balance A. Additions: 1. Debit balance in customer omnibus accounts 2. Any other customer debit balance not accounted for elsewhere (explain nature) ______________________________ Subtotal B. Deductions 1. Unsecured balances and accounts doubtful of collection 2. Debit balances in the accounts of non-customers such as general partners and principal officers. 3. Reduction of margin debits for undue concentration of collateral / 8 4. Deficits in customer-related omnibus accounts /9 5. Debit Balances in accounts of household members and affiliated members /10 6. reduction if unduly concentrated margin account balances /11 7. Reduction of debit balances of accounts jointly owned by customers and non-customers/ 12 8. Reduction for partly secured cash accounts Subtotal Subtotal of Adjusted Total Debits Reduce Subtotal by 1% Adjusted total line item #10 11. Securities Borrowed to Effectuate Short Sales by Customers and Securities Borrowed to make delivery on Customers' Securities Failed to Deliver 12. Fails to Deliver of Customer Securities not older than 30 calendar days (as determined by Allocation or Specific Identification) Unadjusted Balance: A. Additions 1. Clearing Accounts with net debit balances attributable to customer transactions. (Clearing Corporations) 2. Drafts receivable outstanding less than 30 calendar days related to customer transactions /13 Subtotal B. Deductions 1. Securities which are in the firm's physical possession and control and in excess of the broker-dealer's possession and control requirements for three business days past settlement. 2. Others (explain nature) ________________________________ Subtotal Adjusted line item #12 Aggregate Debt Items B. Determination of Requirement: Aggregate Credit Items P Aggregate Debit Items Net Credit/ (Debit) Required Reserve (100% of Net-Credit if making a weekly computation or 105% if monthly) C. Frequency of Computation: ( ) Weekly ( ) Monthly Monthly, if: ( ) Aggregate Indebtedness: Net Capital Ration <800% (____________) AND ( ) Aggregate Customer Funds <P25 million (P___________) D. Special Reserve Bank Account Balance Special Reserve Account Balance Prior to computation Less: Deposit Required Additional Deposit Required Note: Deposit should be made no later than 10 a.m. on the second banking day following computation date.