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Net Capital Requirement
 12 Months Ended
Dec. 31, 2016
Net Capital Requirement  
Net Capital Requirement

(16)        Net Capital Requirement

ITG Inc., AlterNet and ITG Derivatives are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3‑1), which requires the maintenance of minimum net capital. ITG Inc. has elected to use the alternative method permitted by Rule 15c3‑1, which requires that ITG Inc. maintain minimum net capital equal to the greater of $1.0 million or 2% of aggregate debit balances arising from customer transactions, as defined. AlterNet and ITG Derivatives have elected to use the basic method permitted by Rule 15c3‑1, which requires that they each maintain minimum net capital equal to the greater of 6  2/3% of aggregate indebtedness or $100,000.  On August 2, 2016, ITG Derivatives was approved as an introducing broker, resulting in a reduction of its minimum net capital requirement from $1.0 million to $100,000. Dividends or withdrawals of capital cannot be made if capital is needed to comply with regulatory requirements.

Net capital balances and the amounts in excess of required net capital at December 31, 2016 for the U.S. Operations are as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

    

Net Capital

    

Excess

 

U.S. Operations

 

 

 

 

 

 

 

ITG Inc.

 

$
77,469

 

$
76,469

 

AlterNet

 

 
3,435

 

 
3,302

 

ITG Derivatives

 

 
1,217

 

 
1,117

 

 

As of December 31, 2016, ITG Inc. had $8.4 million of cash in a Special Reserve Bank Account for the benefit of customers under the Customer Protection Rule pursuant to SEC Rule 15c3‑3, Computation for Determination of Reserve Requirements and $2.5 million under PABs.

In addition, the Company’s Canadian, European and Asia Pacific Operations have subsidiaries with regulatory capital requirements. The regulatory net capital balances and amount of regulatory capital in excess of the minimum requirements applicable to each business at December 31, 2016, is summarized in the following table (dollars in thousands):

 

 

 

 

 

 

 

 

 

    

Net Capital

    

Excess 

(Deficit)

 

Canadian Operations

 

 

 

 

 

 

 

Canada

 

$
25,264

 

$
24,892

 

European Operations

 

 

 

 

 

 

 

Ireland

 

 
60,602

 

 
36,903

 

U.K.

 

 
1,932

 

 
1,159

 

Asia Pacific Operations

 

 

 

 

 

 

 

Australia

 

 
12,044

 

 
6,140

 

Hong Kong

 

 
24,424

 

 
18,077

 

Singapore

 

 
994

 

 
925