Financial Return under the
Securities and Futures
(Financial Resources) Rules
Johnny Shih
Senior Manager, Intermediaries Supervision
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I. Background of the Financial Return
™
To report liquid capital and
financial information of the
licensed corporation as required
under the FRR
™
To report the business activities of
the licensed corporation
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II. Overview of the Financial Return
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Forms to be submitted on monthly basis * Forms to be submitted
by securities dealers
Form 1: Liquid capital computation * #
and advisers not subject
Form 2: Required liquid capital computation * #
to specified licensing
condition as applicable
Form 3: Credit facility summary *
Form 4: Margin client analysis *
# Forms to be submitted
Form 5: Analysis of securities collateral *
by advisers subject to
Form 6: Rolling balance cash client analysis *
specified licensing
Form 7: Profit and loss account * #
condition on semiannual basis
Form 8: Analysis of client assets *
Form 9: Foreign currency positions for leveraged foreign exchange trader
™
Forms to be submitted on quarterly basis
Form 10:
Form 11:
Form 12:
Report on proprietary derivative positions *
List of recognized counterparties
Client profile and aggregate net value of assets under
management * #
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III. Details of the Forms
Form 1: Liquid capital computation
™
™
For reporting liquid capital (in accordance with the
FRR) and balance sheet in a prescribed format
Declaration statement and forms applicable to relevant
licensed corporation
Form 2: Required liquid capital computation
™
For providing guidance to calculate the required liquid
capital
Form 3: Credit facility summary
™
™
For reporting available credit facilities, securities
provided to financial institutions and the amounts of
the credit facilities utilised by the licensed corporation
Pull-down facilities available
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III. Details of the Forms (cont’d)
Form 4: Margin client analysis
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Table 1: For reporting top 20 margin clients together with
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their unadjusted loan balances (i.e. book balances
after specific provision for bad & doubtful debts);
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their adjusted loan balances (i.e. amounts to be
included in liquid assets); and
™
their collateral (including the total collateral value and
market value of the top 3 collateral)
™
Table 2: For reporting those margin clients/groups of margin
clients whose adjusted loan balance/aggregate adjusted loan
balance is larger than 10% of total adjusted loan balance of all
margin clients
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III. Details of the Forms (cont’d)
Form 5: Analysis of securities collateral
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For reporting
1. illiquid shares or warrants;
2. shares or warrants with CDF below 1; and
3. market value of such shares or warrants provided by
all margin clients as collateral
Form 6: Rolling balance cash client analysis
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For reporting top 20 rolling balance cash clients together with
1. their account balances (i.e. book balances after
specific provision for bad & doubtful debts);
2. their adjusted balances (i.e. amount to be included in
liquid assets); and
3. the market value of their securities holdings
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III. Details of the Forms (cont’d)
Form 7: Profit and loss account
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For reporting profit and loss account for the current and
previous month and up-to-date financial period in a
prescribed format
Form 8: Analysis of client assets
™
™
Table 1: For reporting client securities (covering both local
and overseas securities) in terms of client types and the
relevant dispositions
Table 2:
1. For reporting client money to be segregated and the
relevant disposition in accordance with the Client Money
Rules; and
2. For providing guidance to calculate ranking liabilities in
respect of amounts payable to clients
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III. Details of the Forms (cont’d)
Form 10: Report on proprietary derivative positions
™ For disclosure of proprietary derivative positions and
business activities in such proprietary derivative trading
Form 12: Client profile and aggregate net value of assets
under management
™ For reporting the number of different types of active
clients
™ For licensed corporation licensed for asset management to
report net value of assets under management
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IV. Notes for preparing the Financial Return
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Information provided in the Financial Return should
truly and fully reflect the books and records maintained
by the licensed corporation
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Ensure internal consistency in the figures provided in
the Financial Return (with the help of built-in validation
rules available in Excel template)
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V. Support from the Commission
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Financial Return may be submitted via FinNet,
floppy diskette or paper form
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e-submission encouraged to enjoy benefits of
validation rules and auto-computation functions
available in the Excel template
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Welcome to contact our IT Helpdesk at 121-389
for enquiries arising from e-submission. Briefing
sessions will be separately organized for the esubmission system
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Welcome to contact the responsible case officers
in Intermediaries Supervision for enquiries
regarding the Financial Return
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