Note 6 - Receivables From and Payables to Brokers, Dealers, and Clearing Agencies

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Due to and from Broker-Dealers and Clearing Organizations Disclosure [Text Block]

6. RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES

Amounts receivable from brokers, dealers, and clearing agencies consisted of the following.

RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES

(Dollars in Thousands)

	June 30, 2021		December 31, 2020
Deposits with clearing agencies	$	250	$	250
Unsettled regular way trades, net		5,190		2,961
Receivables from clearing agencies		106,342		49,706
Receivables from brokers, dealers, and clearing agencies	$	111,782	$	52,917

Amounts payable to brokers, dealers, and clearing agencies consisted of the following.

PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES

(Dollars in Thousands)

	June 30, 2021		December 31, 2020
Margin payable	$	167,849	$	156,678
Unsettled regular way trades, net		49,688		-
Payables to brokers, dealers, and clearing agencies	$	217,537	$	156,678

Deposits with clearing agencies represent contractual amounts the Company is required to deposit with its clearing agents.

Securities transactions that settle in the regular way are recorded on the trade date, as if they had settled. The related amounts receivable and payable for unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheets. 

Receivables from clearing agencies are primarily comprised of (i) cash received by the Company upon execution of short trades that is restricted from withdrawal by the clearing agent and (ii) cash deposited with the FICC to support the Company’s General Collateral Funding (“GCF”) matched book repo business.

Margin payable represents amounts borrowed from Pershing, LLC to finance the Company’s trading portfolio.  Substantially all of the Company’s investments-trading and deposits with clearing agencies serve as collateral for the margin payable.  See note 5 for interest expense incurred on margin payable.