Proposed Rule2017 | 2016 | 2015 | 2014 | 2013 | Show more years
(Additions are underscored and deletions are stricken through)
SECTION B1. EQUITY CAPITAL. This term includes:
B1-a. A satisfactory subordination agreement entered into by a partner or stockholder which has an initial term of at least three years and has a remaining term of not less than 12 months if:
- (i) It does not have any of the provisions for accelerated maturity provided for by Schedule C, C1-b(ix)(A), C1-b(x)(A) or C1-b(x)(B), or the provisions for Revolving Subordination-Special Prepayment provided for by Schedule C, C2-f; or
(ii) The partnership agreement provides that capital contributed pursuant to a satisfactory subordination agreement as defined in Schedule C shall in all respects be partnership capital subject to the provisions restricting the withdrawal thereof required by B2 below; and
- (i) In the case of a corporation, the sum of its par or stated value of capital stock, paid in capital in excess of par, retained earnings, unrealized profit and loss, and other capital accounts;
(ii) In the case of partnership, the sum of its capital accounts of partners (inclusive of such partners' commodity futures and options and securities accounts and other properties designated in the partnership agreement as capital subject to the provisions of B2 below), and unrealized profit and loss; or
(iii) In the case of a sole proprietorship, the sum of its capital accounts of the sole proprietorship and unrealized profit and loss.
SECTION B2. EQUITY WITHDRAWAL.
B2-a. The following are prohibited:
- (i) The withdrawal of equity capital (See B1, above) from a Member FCM (or subsidiary or affiliate where equity capital is consolidated under Schedule A, Section A8); or
(ii) The making of an unsecured loan (including an advance) to a stockholder, partner, sole proprietor, or employee-if, after giving effect to such withdrawal or loan, and capital reductions which are scheduled to occur within six months, Adjusted Net Capital of any of the consolidated entities would be less than the greatest of:
- (A) 120 percent of the greatest amount required by Section 1, paragraph (i), (iii) or (iv) of these Requirements;
(B) Seven (7) percent of the funds required to be segregated and the foreign futures or foreign options secured amount, less the market value of commodity options purchased by customers on or subject to the rules of a contract market or a foreign board of trade: Provided, however, the deduction for each customer shall be limited to the amount of customer funds in such customer's account and foreign futures and foreign options secured amounts; or
(C) For securities brokers or dealers, the amount of net capital specified in Rule 15c3-1(e) of the Regulations of the Securities and Exchange Commission (17 CFR 240.15c3-1(e));
or, in the case of a Member FCM which is included within such consolidation, if its equity capital would be less than 30 percent of the required debt-equity total as defined in Section 3.
B2.b. This provision does not preclude making required tax payments or paying partners reasonable compensation.
B2-c. A DSRO may, upon application of a Member FCM, grant relief from this Section B2 if the DSRO deems it to be in the best interests of the DSRO.