(8) Receivables and Payables

Receivables from, and Payables to, Brokers, Dealers and Clearing Organizations

The following is a summary of receivables from, and payables to, brokers, dealers and clearing organizations (dollars in thousands):

	Receivables from						Payables to
	September 30, 2013			December 31, 2012			September 30, 2013		December 31, 2012
Broker-dealers	$	711,575		$	297,916		$	462,042	$	513,529
Clearing organizations	5,627			12,391			93,806		728
Securities borrowed	928,899			798,228			—		—
Securities loaned	—			—			966,595		823,202
Allowance for doubtful accounts	(1,217		)	(1,416		)	—		—
Total	$	1,644,884		$	1,107,119		$	1,522,443	$	1,337,459

Receivables from, and Payables to, Customers

The following is a summary of receivables from, and payables to, customers (dollars in thousands):

	Receivables from						Payables to
	September 30, 2013			December 31, 2012			September 30, 2013		December 31, 2012
Customers	$	943,154		$	548,287		$	936,381	$	226,892
Allowance for doubtful accounts	(904		)	(1,462		)	—		—
Total	$	942,250		$	546,825		$	936,381	$	226,892

Securities Borrowed and Loaned

As of September 30, 2013, securities borrowed as part of the Company’s matched book operations with a fair value of $905.9 million were delivered for securities loaned. The gross amounts of interest earned on cash provided to counterparties as collateral for securities borrowed, and interest incurred on cash received from counterparties as collateral for securities loaned, and the resulting net amount included in other revenue on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013, were as follows (dollars in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Interest earned	$	2,882		$	3,799		$	11,662		$	17,335
Interest incurred	(1,938		)	(2,680		)	(8,242		)	(13,332		)
Net	$	944		$	1,119		$	3,420		$	4,003

Deposits paid for securities borrowed and deposits received for securities loaned are recorded at the amount of cash collateral advanced or received. Deposits paid for securities borrowed transactions require the Company to deposit cash with the lender. With respect to deposits received for securities loaned, the Company receives collateral in the form of cash in an amount generally in excess of the market value of the securities loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded, as necessary.

The Company’s securities borrowing and lending is generally done under industry standard agreements (“Master Securities Lending Agreements”) that may allow, following an event of default by either party, the prompt close-out of all transactions (including the liquidation of securities held) and the offsetting of obligations to return cash or securities, as the case may be, by the non-defaulting party. Events of default under the Master Securities Lending Agreements generally include, subject to certain conditions: (i) failure to timely deliver cash or securities as required under the transaction, (ii) a party’s insolvency, bankruptcy, or similar proceeding, (iii) breach of representation, and (iv) a material breach of the agreement. The counterparty that receives the securities in these transactions generally has unrestricted access in its use of the securities. For financial statement purposes, the Company does not offset securities borrowed and securities loaned.

In accordance with ASU 2013-01, the following table summarizes the transactions under certain Master Securities Lending Agreements that may be eligible for offsetting if an event of default occurred and a right of offset was legally enforceable (dollars in thousands):

	Gross Amounts of Recognized Assets/ (Liabilities)			Gross Amounts Offset in the Condensed Consolidated Statement of Financial Condition		Net Amounts Presented in the Condensed Consolidated Statement of Financial Condition			Collateral Received or Pledged (including Cash)			Net Amount
*As of September 30, 2013:*

Deposits paid for securities borrowed	$	928,899		$	—	$	928,899		$	899,661		$	29,238

Deposits received for securities loaned	$	(966,595	)	$	—	$	(966,595	)	$	(966,595	)	$	—

*As of December 31, 2012:*

Deposits paid for securities borrowed	$	798,228		$	—	$	798,228		$	789,317		$	8,911

Deposits received for securities loaned	$	(823,202	)	$	—	$	(823,202	)	$	(822,382	)	$	(820	)