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Assets and Liabilities, at Fair Value
 3 Months Ended
Dec. 31, 2011
Assets and Liabilities, at Fair Value [Abstract]  
Fair Value Disclosures [Text Block]
Assets and Liabilities, at Fair Value
The Company’s financial and nonfinancial assets and liabilities reported at fair value are included within the following captions on the condensed consolidated balance sheets:
•
Cash and cash equivalents
•
Cash, securities and other assets segregated under federal and other regulations
•
Deposits and receivables from exchange-clearing organizations
•
Deposits and receivables from broker-dealers, clearing organizations and counterparties
•
Financial instruments owned
•
Accounts payable and other accrued liabilities
•
Payables to customers
•
Financial instruments sold, not yet purchased
The table below sets forth an analysis of the carrying value of financial instruments owned and financial instruments sold, not yet purchased as of December 31, 2011 and September 30, 2011. This is followed by tables that provide the information required by the Fair Value Measurements and Disclosures Topic of the ASC for all financial assets and liabilities that are carried at fair value. 
 
December 31, 2011
 
September 30, 2011
(in millions)
Owned
 
Sold, not yet
purchased
 
Owned
 
Sold, not yet
purchased
Common stock and American Depositary Receipts ("ADRs")
$
24.2

 
$
11.3

 
$
46.9

 
$
23.4

Exchangeable foreign ordinary equities and ADRs
6.9

 
13.3

 
9.8

 
23.8

Corporate and municipal bonds
5.1

 
—

 
8.7

 
—

U.S. government obligations
6.3

 
—

 
0.8

 
—

Foreign government obligations
6.0

 
—

 
6.7

 
—

Derivatives
64.5

 
62.4

 
101.9

 
122.9

Commodities leases and unpriced positions
9.7

 
139.6

 
26.1

 
220.8

Commodities warehouse receipts
18.7

 
—

 
16.2

 
—

Exchange firm common stock
3.6

 
—

 
3.7

 
—

Mutual funds and other
0.7

 
—

 
1.0

 
—

Investment in managed funds
—

 
—

 
1.3

 
—

 
$
145.7

 
$
226.6

 
$
223.1

 
$
390.9

Fair Value Hierarchy
The majority of financial assets and liabilities on the condensed consolidated balance sheets are reported at fair value. Cash is reported at the balance held at financial institutions. Cash equivalents include the value of money market funds and certificates of deposit. Cash, securities and other assets segregated under federal and other regulations include the value of cash collateral as well as the value of other pledged investments, primarily U.S. Treasury bills and obligations issued by government sponsored entities and commodities warehouse receipts. Deposits with and receivables from exchange-clearing organizations and broker-dealers, clearing organizations and counterparties and payables to customers and broker-dealers, clearing organizations and counterparties include the value of cash collateral as well as the value of money market funds and other pledged investments, primarily U.S. Treasury bills and obligations issued by government sponsored entities and mortgage-backed securities. These balances also include the fair value of exchange-traded futures and options on futures and exchange-cleared swaps and options. Financial instruments owned and sold, not yet purchased include the value of U.S. and foreign government obligations, corporate debt securities, derivative financial instruments, commodities, mutual funds and investments in managed funds. Notes payable and subordinated debt carry variable rates of interest and thus approximate fair value.
The fair value estimates presented in the financial statements are based on pertinent information available to management as of December 31, 2011 and September 30, 2011. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented in the financial statements.
Cash equivalents, securities, commodities warehouse receipts, derivative financial instruments and contingent liabilities are carried at fair value, on a recurring basis, and are classified and disclosed into three levels within the fair value hierarchy. The Company did not have any fair value adjustments for assets or liabilities measured at fair value on a non-recurring basis during the three months ended December 31, 2011, except as disclosed in Note 14, if applicable. The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosures Topic of the ASC are:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 - Quoted prices for identical or similar assets or liabilities in markets that are less active, that is, markets in which there are few transactions for the asset or liability that are observable for substantially the full term; and
Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
The following tables set forth the Company’s financial and nonfinancial assets and liabilities accounted for at fair value, on a recurring basis, as of December 31, 2011 and September 30, 2011 by level within the fair value hierarchy.
 
December 31, 2011
(in millions)
Level 1
 
Level 2
 
Level 3
 
Netting and
Collateral (1)
 
Total
Assets:


 


 


 


 


Money market funds
$
0.1

 
$
—

 
$
—

 
$
—

 
$
0.1

Certificate of deposits
2.6

 
—

 
—

 
—

 
2.6

Unrestricted cash equivalents
2.7

 
—

 
—

 
—

 
2.7

Commodities warehouse receipts
19.8

 
—

 
—

 
—

 
19.8

U.S. government obligations
—

 
85.2

 
—

 
—

 
85.2

Securities and other assets segregated under federal and other regulations
19.8

 
85.2

 
—

 
—

 
105.0

Money market funds
494.0

 
—

 
—

 
—

 
494.0

U.S. government obligations
—

 
675.3

 
—

 
—

 
675.3

Mortgage-backed securities
—

 
8.0

 
—

 
—

 
8.0

Derivatives
3,677.7

 
—

 
—

 
(3,841.5
)
 
(163.8
)
Deposits and receivables from exchange-clearing organizations
4,171.7

 
683.3

 
—

 
(3,841.5
)
 
1,013.5

U.S. government obligations
—

 
0.1

 
—

 
—

 
0.1

Derivatives
0.5

 
—

 
—

 
(0.2
)
 
0.3

Deposits and receivables from broker-dealers, clearing organizations and counterparties
0.5

 
0.1

 
—

 
(0.2
)
 
0.4

Common stock and ADRs
28.9

 
1.1

 
1.1

 
—

 
31.1

Corporate and municipal bonds
0.3

 
1.3

 
3.5

 
—

 
5.1

U.S. government obligations
—

 
6.3

 
—

 
—

 
6.3

Foreign government obligations
6.0

 
—

 
—

 
—

 
6.0

Derivatives
118.5

 
389.9

 
—

 
(443.9
)
 
64.5

Commodities leases and unpriced positions
—

 
11.0

 
—

 
(1.3
)
 
9.7

Commodities warehouse receipts
18.7

 
—

 
—

 
—

 
18.7

Exchange firm common stock
2.9

 
0.7

 
—

 
—

 
3.6

Mutual funds and other
0.3

 
—

 
0.4

 
—

 
0.7

 
 
 
 
 
 
 
 
 
 
Financial instruments owned
175.6

 
410.3

 
5.0

 
(445.2
)
 
145.7

Total assets at fair value
$
4,370.3

 
$
1,178.9

 
$
5.0

 
$
(4,286.9
)
 
$
1,267.3

Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and other accrued liabilities - contingent liabilities
$
—

 
$
—

 
$
22.9

 
$
—

 
$
22.9

Payables to customers - derivatives
3,841.5

 
—

 
—

 
(3,841.5
)
 
—

Common stock and ADRs
24.2

 
0.4

 
—

 
—

 
24.6

 
 
 
 
 
 
 
 
 
 
Derivatives
132.1

 
356.9

 
—

 
(426.6
)
 
62.4

Commodities leases and unpriced positions
—

 
289.2

 
—

 
(149.6
)
 
139.6

Financial instruments sold, not yet purchased
156.3

 
646.5

 
—

 
(576.2
)
 
226.6

Total liabilities at fair value
$
3,997.8

 
$
646.5

 
$
22.9

 
$
(4,417.7
)
 
$
249.5

 
(1)
Represents cash collateral and the impact of netting across the levels of the fair value hierarchy. Netting among positions classified within the same level are included in that level.
 
September 30, 2011
(in millions)
Level 1
 
Level 2
 
Level 3
 
Netting and
Collateral (1)
 
Total
Assets:
 
 
 
 
 
 
 
 
 
Money market funds
$
0.1

 
$
—

 
$
—

 
$
—

 
$
0.1

Certificate of deposits
12.6

 
—

 
—

 
—

 
12.6

Unrestricted cash equivalents
12.7

 
—

 
—

 
—

 
12.7

Commodities warehouse receipts
19.0

 
—

 
—

 
—

 
19.0

U.S. government obligations
—

 
3.7

 
—

 
—

 
3.7

Securities and other assets segregated under federal and other regulations
19.0

 
3.7

 
—

 
—

 
22.7

Money market funds
1,193.5

 
—

 
—

 
—

 
1,193.5

U.S. government obligations
—

 
470.5

 
—

 
—

 
470.5

Mortgage-backed securities
—

 
8.5

 
—

 
—

 
8.5

Derivatives
7,227.4

 
—

 
—

 
(7,491.7
)
 
(264.3
)
Deposits and receivables from exchange-clearing organizations
8,420.9

 
479.0

 
—

 
(7,491.7
)
 
1,408.2

U.S. government obligations
—

 
0.1

 
—

 
—

 
0.1

Derivatives
47.3

 
1,073.5

 
—

 
(1,104.7
)
 
16.1

Deposits and receivables from broker-dealers, clearing organizations and counterparties
47.3

 
1,073.6

 
—

 
(1,104.7
)
 
16.2

Common stock and ADRs
53.4

 
2.2

 
1.1

 
—

 
56.7

Corporate and municipal bonds
—

 
5.1

 
3.6

 
—

 
8.7

U.S. government obligations
—

 
0.8

 
—

 
—

 
0.8

Foreign government obligations
5.8

 
0.9

 
—

 
—

 
6.7

Derivatives
210.5

 
557.6

 
—

 
(666.2
)
 
101.9

Commodities leases and unpriced positions
—

 
66.3

 
—

 
(40.2
)
 
26.1

Commodities warehouse receipts
16.2

 
—

 
—

 
—

 
16.2

Exchange firm common stock
3.0

 
0.7

 
—

 
—

 
3.7

Mutual funds and other
0.6

 
—

 
0.4

 
—

 
1.0

Investment in managed funds
—

 
1.3

 
—

 
—

 
1.3

Financial instruments owned
289.5

 
634.9

 
5.1

 
(706.4
)
 
223.1

Total assets at fair value
$
8,789.4

 
$
2,191.2

 
$
5.1

 
$
(9,302.8
)
 
$
1,682.9

Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and other accrued liabilities - contingent liabilities
$
—

 
$
—

 
$
22.3

 
$
—

 
$
22.3

Payables to customers - derivatives
6,234.7

 
—

 
—

 
(6,234.7
)
 
—

Common stock and ADRs
44.9

 
2.3

 
—

 
—

 
47.2

 
 
 
 
 
 
 
 
 
 
Derivatives
219.9

 
1,679.1

 
—

 
(1,776.1
)
 
122.9

Commodities leases and unpriced positions
—

 
431.9

 
—

 
(211.1
)
 
220.8

Financial instruments sold, not yet purchased
264.8

 
2,113.3

 
—

 
(1,987.2
)
 
390.9

Total liabilities at fair value
$
6,499.5

 
$
2,113.3

 
$
22.3

 
$
(8,221.9
)
 
$
413.2

(1)
Represents cash collateral and the impact of netting across the levels of the fair value hierarchy. Netting among positions classified within the same level are included in that level.
Realized and unrealized gains and losses are included within ‘trading gains’ in the condensed consolidated income statements.
Information on Level 3 Financial Assets and Liabilities
The Company’s financial assets at fair value classified within level 3 of the fair value hierarchy as of December 31, 2011 and September 30, 2011 are summarized below:
 
(in millions)
December 31, 2011
 
September 30, 2011
Total level 3 assets
$
5.0

 
$
5.1

Level 3 assets for which the Company bears economic exposure
$
5.0

 
$
5.1

Total assets
$
2,414.8

 
$
2,635.7

Total financial assets at fair value
$
1,267.3

 
$
1,682.9

Total level 3 assets as a percentage of total assets
0.2
%
 
0.2
%
Level 3 assets for which the Company bears economic exposure as a percentage of total assets
0.2
%
 
0.2
%
Total level 3 assets as a percentage of total financial assets at fair value
0.4
%
 
0.3
%
The following tables set forth a summary of changes in the fair value of the Company’s level 3 financial assets and liabilities during the three months ended December 31, 2011 and 2010, including a summary of unrealized gains (losses) during the three months on the Company’s level 3 financial assets and liabilities still held as of December 31, 2011. 
 
Level 3 Financial Assets and Financial Liabilities
For the Three Months Ended December 31, 2011
(in millions)
Balances at
beginning of
period
 
Realized gains
(losses) during
period
 
Unrealized
gains (losses)
during period
 
Purchases,
issuances,
settlements
 
Transfers in
or (out) of
Level 3
 
Balances at
end of period
Assets:
 
 
 
 
 
 
 
 
 
 
 
Common stock and ADRs
$
1.1

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1.1

Corporate and municipal bonds
3.6

 
—

 
(0.1
)
 
—

 
—

 
3.5

 
 
 
 
 
 
 
 
 
 
 
 
Mutual funds and other
0.4

 
—

 
—

 
—

 
—

 
0.4

Investment in managed funds
—

 
—

 
—

 
—

 
—

 
—

 
$
5.1

 
$
—

 
$
(0.1
)
 
$
—

 
$
—

 
$
5.0

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Contingent liabilities
$
22.3

 
$
—

 
$
0.9

 
$
(0.3
)
 
$
—

 
$
22.9


 
Level 3 Financial Assets and Financial Liabilities
For the Three Months Ended December 31, 2010
(in millions)
Balances at
beginning of
period
 
Realized gains
(losses) during
period
 
Unrealized
gains (losses)
during period
 
Purchases,
issuances,
settlements
 
Transfers in
or (out) of
Level 3
 
Balances at
end of period
Assets:
 
 
 
 
 
 
 
 
 
 
 
Common stock and ADRs
$
1.2

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1.2

Corporate and municipal bonds
8.0

 
—

 
0.1

 
—

 
—

 
8.1

 
 
 
 
 
 
 
 
 
 
 
 
Mutual funds and other
0.4

 
—

 
—

 
—

 
—

 
0.4

Investment in managed funds
0.6

 
—

 
—

 
—

 
—

 
0.6

 
$
10.2

 
$
—

 
$
0.1

 
$
—

 
$
—

 
$
10.3

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Contingent liabilities
$
32.3

 
$
—

 
$
1.4

 
$
(3.7
)
 
$
—

 
$
30.0

The Company is required to make additional future cash payments based on certain financial performance measures of its acquired businesses. The Company is required to remeasure the fair value of the cash earnout arrangements on a recurring basis in accordance with the guidance in the Business Combinations Topic of the ASC. The Company has classified its net liabilities for the contingent earnout arrangements within level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs, which include projected cash flows. The estimated fair value of the contingent purchase consideration is based upon management-developed forecasts, a level 3 input in the fair value hierarchy. These cash flows are discounted employing present value techniques in arriving at the acquisition-date fair value. The discount rate was developed using market participant company data, a level 2 input in the fair value hierarchy, and there have been no significant changes in the discount rate environment. From the dates of acquisition to December 31, 2011, certain acquisitions have had changes in the estimates of undiscounted cash flows, based on actual performances fluctuating from estimates. During the three months ended December 31, 2011, the fair value of the contingent consideration changed $0.9 million, with the corresponding amount classified as 'other' within the condensed consolidated income statements.
The Company reports transfers in and out of levels 1, 2 and 3, as applicable, using the fair value of the securities as of the beginning of the reporting period in which the transfer occurred.
The Company did not have any transfers between level 1 and level 2 fair value measurements for the three months ended December 31, 2011.
The Company has recorded unrealized gains of $0.1 million, net of income tax expense of $0.1 million related to U.S. government obligations and corporate bonds classified as available-for-sale securities in OCI as of December 31, 2011. The following tables summarize the amortized cost basis, the aggregate fair value and gross unrealized holding gains and losses of the Company’s investment securities classified as available-for-sale as of December 31, 2011 and September 30, 2011:
December 31, 2011
Amounts included in financial instruments owned:
 
 
 
 
 
 
 
 
Amortized
Cost
 
Unrealized Holding (1)
 
Estimated
Fair Value
(in millions)
 
Gains
 
(Losses)
 
U.S. government obligations
$
6.0

 
$
—

 
$
—

 
$
6.0

 
 
 
 
 
 
 
 
 
$
6.0

 
$
—

 
$
—

 
$
6.0

 
(1)
Unrealized gain/loss on financial instruments owned as of December 31, 2011 is less than $0.1 million.

Amounts included in deposits with and receivables from exchange-clearing organizations:
 
Amortized
Cost
 
Unrealized Holding
 
Estimated
Fair  Value
(in millions)
Gains
 
(Losses)
 
U.S. government obligations
$
637.3

 
$
—

 
$
—

 
$
637.3

Mortgage-backed securities
7.9

 
0.1

 
—

 
8.0

 
$
645.2

 
$
0.1

 
$
—

 
$
645.3

 
September 30, 2011
Amounts included in financial instruments owned:
 
 
 
 
 
 
 
 
Amortized
Cost
 
Unrealized Holding (1)
 
Estimated
Fair  Value
(in millions)
Gains
 
(Losses)
 
U.S. government obligations
$
0.5

 
$
—

 
$
—

 
$
0.5

Corporate bonds
5.0

 
—

 
—

 
5.0

 
$
5.5

 
$
—

 
$
—

 
$
5.5

 
(1)
Unrealized gain/loss on financial instruments owned as of September 30, 2011 is less than $0.1 million.

Amounts included in deposits with and receivables from exchange-clearing organizations:
 
Amortized
Cost
 
Unrealized Holding
 
Estimated
Fair  Value
(in millions)
Gains
 
(Losses)
 
U.S. government obligations
$
440.6

 
$
0.1

 
$
—

 
$
440.7

Mortgage-backed securities
8.3

 
0.2

 
—

 
8.5

 
$
448.9

 
$
0.3

 
$
—

 
$
449.2

As of December 31, 2011 and September 30, 2011, investments in debt securities classified as available-for-sale ("AFS") mature as follows:
December 31, 2011
 
Due in
 
Estimated
Fair  Value
(in millions)
Less than 1 year
 
1 year or more
 
U.S. government obligations
$
643.3

 
$
—

 
$
643.3

 
 
 
 
 
 
Mortgage-backed securities
—

 
8.0

 
8.0

 
$
643.3

 
$
8.0

 
$
651.3

September 30, 2011
 
Due in
 
Estimated
Fair Value
(in millions)
Less than 1 year
 
1 year or more
 
U.S. government obligations
$
441.2

 
$
—

 
$
441.2

Corporate bonds
5.0

 
—

 
5.0

Mortgage-backed securities
—

 
8.5

 
8.5

 
$
446.2

 
$
8.5

 
$
454.7

There were no sales of AFS securities during the three months ended December 31, 2011 and 2010, and as a result, no realized gains or losses were recorded for the three months ended December 31, 2011 and 2010.
For the purposes of the maturity schedule, mortgage-backed securities, which are not due at a single maturity date, have been allocated over maturity groupings based on the expected maturity of the underlying collateral. Mortgage-backed securities may mature earlier than their stated contractual maturities because of accelerated principal repayments of the underlying loans.
The Company has also classified equity investments in exchange firms' common stock not pledged for clearing purposes as available-for-sale. The investments are recorded at fair value, with unrealized gains and losses recorded, net of taxes, as a component of OCI until realized. As of December 31, 2011, the cost and fair value of the equity investments in exchange firms was $4.4 million and $3.7 million, respectively. The Company recorded unrealized losses of $0.5 million, net of income tax benefit of $0.3 million in OCI related to equity investments in exchange firms as of December 31, 2011. The Company monitors the fair value of exchange common stock on a periodic basis, and does not consider any current unrealized losses to be anything other than a temporary impairment.