Uniform Net Capital Rule Requirements

12 Months Ended

Dec. 31, 2018

Uniform Net Capital Rule Requirements

14. Uniform Net Capital Rule Requirements

Two of our subsidiaries, W&R and IDI are registered broker-dealers and members of FINRA. Broker-dealers are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3‑1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15.0 to 1.0. The primary difference between net capital and stockholders’ equity is the non‑allowable assets that are excluded from net capital.

A broker-dealer may elect not to be subject to the Aggregate Indebtedness Standard of paragraph (a)(1)(i) of Rule 15c3‑1, in which case net capital must exceed the greater of $250 thousand or 2% of aggregate debit items computed in accordance with the Formula for Determination of Reserve Requirements for broker-dealers. W&R made this election and thus is not subject to the aggregate indebtedness ratio as of December 31, 2018 or 2017.

Net capital and aggregated indebtedness information for our broker-dealer subsidiaries is presented in the following table as of December 31, 2018 and 2017:


	2018				2017
	(in thousands)
	W&R		IDI		W&R	IDI
Net capital	$	57,109		25,688	28,024		21,167
Required capital		250		1,336	250		1,757
Excess of required capital	$	56,859		24,352	27,774		19,410
Ratio of aggregate indebtedness to net capital		Not			Not
		applicable		0.78 to 1.0	applicable		1.25 to 1.0