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Note 16 - Net Capital Requirements
9 Months Ended
Jun. 30, 2014
Brokers and Dealers [Abstract]  
Brokers and Dealers Disclosure [Text Block]

NOTE 16. NET CAPITAL REQUIREMENTS


The Broker-Dealer Subsidiaries are subject to the SEC's Uniform Net Capital Rule 15c3-1 (“Rule 15c3-1” or “the Rule”), which is designed to measure the general financial integrity and liquidity of a broker-dealer and requires the maintenance of minimum net capital.


NSC is required to maintain minimum net capital equal to the greater of i.) $100,000,or ii.) a specified amount per security based on the bid price of each security for which NSC is a market maker with a limit of $1,000,000, and is required to maintain a ratio of aggregate indebtedness to net capital, as defined, of not more than 15 to 1 (and the rule of the “applicable” exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At June 30, 2014, National Securities had net capital of approximately $7,932,000 which was approximately $7,832,000 in excess of its required net capital of $100,000, and its percentage of aggregate indebtedness to net capital was 310.0%.


Due to its market maker status, vFinance Investments is required to maintain minimum net capital of $1,000,000. In addition to the net capital requirements, vFinance Investments is required to maintain a ratio of aggregate indebtedness to net capital, as defined, of not more than 15 to 1 (and the rule of the “applicable” exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At June 30, 2014, vFinance Investments had net capital of approximately $3,170,000, which was approximately $2,170,000 in excess of its required net capital of $1,000,000, and its percentage of aggregate indebtedness to net capital was 108.6%.


The Broker-Dealer Subsidiaries qualify under the exemptive provisions of Rule 15c3-3 which relates to the custody of securities for the account of customers pursuant to Section (k)(2)(ii) of the Rule as none of them carry security accounts of customers or perform custodial functions related to customer securities.


Advances, dividends from subsidiaries and other equity withdrawals from the Broker-Dealer Subsidiaries are restricted by the regulations of the SEC, and other regulatory agencies. These regulatory restrictions may limit the amounts that a subsidiary may dividend or advance to the Company.