DISCLOSURE OF OFFSETTING ASSETS AND LIABILITIES, COLLATERAL, ENCUMBERED ASSETS AND REPURCHASE AGREEMENTS

Offsetting assets and liabilities

The following table presents information about the financial and derivative instruments that are offset or subject to an enforceable master netting arrangement or other similar agreement as of the dates indicated:



										Gross amounts not offset in the Statements of Financial Condition
	Gross amounts of recognized assets (liabilities)			Gross amounts offset in the Statements of Financial Condition			Net amounts presented in the Statements of Financial Condition			Financial instruments				Cash (received) paid			Net amount
	(in thousands)
As of March 31, 2016:
Assets
Securities purchased under agreements to resell and other collateralized financings	$	428,864		$	—		$	428,864		$	(428,864	)	⁽¹⁾	$	—		$	—
Derivatives - interest rate contracts⁽²⁾	138,228			(96,630		)	41,598			(17,378		)		—			24,220
Derivative instruments associated with offsetting matched book positions	396,163			—			396,163			(396,163		)	⁽³⁾	—			—
Derivatives - forward foreign exchange contracts⁽⁴⁾	2,938			—			2,938			—				—			2,938
Derivatives - forward foreign exchange contracts ⁽⁵⁾	9,677			—			9,677			—				—			9,677
Stock borrowed	123,156			—			123,156			(119,957		)		—			3,199
Total assets	$	1,099,026		$	(96,630	)	$	1,002,396		$	(962,362	)		$	—		$	40,034
Liabilities
Securities sold under agreements to repurchase	$	(190,679	)	$	—		$	(190,679	)	$	190,679		⁽⁶⁾	$	—		$	—
Derivatives - interest rate contracts⁽²⁾	(130,702		)	128,002			(2,700		)	—				2,700		⁽⁷⁾	—
Derivative instruments associated with offsetting matched book positions	(396,163		)	—			(396,163		)	396,163			⁽³⁾	—			—
Derivatives - forward foreign exchange contracts⁽⁴⁾	(201		)	—			(201		)	—				—			(201		)
Derivatives - forward foreign exchange contracts⁽⁵⁾	(4,939		)	—			(4,939		)	—				—			(4,939		)
Derivatives - RJ Bank Interest Hedges	(20,803		)	—			(20,803		)	—				20,803		⁽⁸⁾	—
Stock loaned	(610,476		)	—			(610,476		)	599,876				—			(10,600		)
Total liabilities	$	(1,353,963	)	$	128,002		$	(1,225,961	)	$	1,186,718			$	23,503		$	(15,740	)
As of September 30, 2015:
Assets
Securities purchased under agreements to resell and other collateralized financings	$	474,144		$	—		$	474,144		$	(474,144	)	⁽¹⁾	$	—		$	—
Derivatives - interest rate contracts⁽²⁾	130,095			(90,621		)	39,474			(12,609		)		—			26,865
Derivative instruments associated with offsetting matched book positions	389,457			—			389,457			(389,457		)	⁽³⁾	—			—
Derivatives - forward foreign exchange contracts⁽⁷⁾	917			—			917			—				—			917
Derivatives - forward foreign exchange contracts⁽⁴⁾	2,612			—			2,612			—				—			2,612
Stock borrowed	124,373			—			124,373			(120,957		)		—			3,416
Total assets	$	1,121,598		$	(90,621	)	$	1,030,977		$	(997,167	)		$	—		$	33,810
Liabilities
Securities sold under agreements to repurchase	$	(332,536	)	$	—		$	(332,536	)	$	332,536		⁽⁶⁾	$	—		$	—
Derivatives - interest rate contracts⁽²⁾	(104,255		)	88,881			(15,374		)	3,528			⁽⁷⁾	7,399		⁽⁷⁾	(4,447		)
Derivative instruments associated with offsetting matched book positions	(389,457		)	—			(389,457		)	389,457			⁽³⁾	—			—
Derivatives - forward foreign exchange contracts⁽⁴⁾	(4,865		)	—			(4,865		)	—				—			(4,865		)
Derivatives - RJ Bank Interest Hedges	(7,545		)	—			(7,545		)	—				7,545		⁽⁸⁾	—
Stock loaned	(478,573		)	—			(478,573		)	472,379				—			(6,194		)
Total liabilities	$	(1,317,231	)	$	88,881		$	(1,228,350	)	$	1,197,900			$	14,944		$	(15,506	)

The text of the footnotes in the above table are on the following page.

The text of the footnotes to the table on the previous page are as follows:


(1)	We are over-collateralized since the actual amount of financial instruments pledged as collateral for securities purchased under agreements to resell and other collateralized financings amounts to $446.7 million and $499.3 million as of March 31, 2016 and September 30, 2015, respectively.


(2)	Derivatives - interest rate contracts are included in Trading instruments on our Condensed Consolidated Statements of Financial Condition. See Note 13 for additional information.

(3)

Although these derivative arrangements do not meet the definition of a master netting arrangement as specified by GAAP, the nature of the agreement with the third party intermediary include terms that are similar to a master netting agreement, thus we present the offsetting amounts net in this table. See Note 13 for further discussion of the “pass through” structure of the derivative instruments associated with Offsetting Matched Book Derivatives Operations.

(4)

These contracts are associated with RJ Bank’s activities to hedge its foreign currency exposure. As of March 31, 2016, the fair value of the forward foreign exchange contract derivatives are in both an asset and a liability position and are included in prepaid expenses and other assets and trade and other payables, respectively, on our Condensed Consolidated Statements of Financial Condition. As of September 30, 2015 the fair value of the forward foreign exchange contract derivatives are in an asset position and are included in prepaid expenses and other assets on our Condensed Consolidated Statements of Financial Condition. See Note 13 for additional information.


(5)	See Note 13 for additional information on our forward foreign exchange contract derivatives associated with our OTC Derivatives Operations.


(6)	We are over-collateralized since the actual amount of financial instruments pledged as collateral for securities sold under agreements to repurchase amounts to $200 million and $346.1 million as of March 31, 2016 and September 30, 2015, respectively.

(7)

For the portion of these derivative contracts that are transacted through an exchange, the nature of the agreement with the clearing member exchange include terms that are similar to a master netting agreement, thus we are over-collateralized as of March 31, 2016 and September 30, 2015 since the actual amount of cash and securities deposited with the exchange for these derivative contracts is $10.9 million and $17.6 million, respectively. These deposits are a component of deposits with clearing organizations on our Condensed Consolidated Statements of Financial Condition. See Note 13 for additional information.

(8)

Derivatives - RJ Bank Interest Hedges are included in trade and other payables on our Condensed Consolidated Statements of Financial Condition. See Note 13 for additional information. The RJ Bank Interest Hedges are transacted through an exchange. The nature of the agreement with the clearing member exchange includes terms that are similar to a master netting agreement, thus present offsetting deposits paid to the exchange associated with these contracts. These deposits are included in deposits with clearing organizations on our Condensed Consolidated Statements of Financial Condition.

For financial statement purposes, we do not offset our repurchase agreements or securities borrowing, securities lending transactions and certain of our derivative instruments including those transacted through an exchange because the conditions for netting as specified by GAAP are not met. Our repurchase agreements, securities borrowing and securities lending transactions, and certain of our derivative instruments transacted through an exchange, are governed by master agreements that are widely used by counterparties and that may allow for net settlements of payments in the normal course as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. Although not offset on the Condensed Consolidated Statements of Financial Condition, these transactions are included in the preceding table.

Collateral and deposits with clearing organizations

We receive cash and securities as collateral, primarily in connection with Reverse Repurchase Agreements, securities borrowed, derivative transactions not transacted through an exchange, and client margin loans arising from our domestic operations. The cash collateral we receive is primarily associated with our OTC Derivative Operations (see Note 13 for additional information). The collateral we receive reduces our credit exposure to individual counterparties.

We also pay cash to the exchange, or receive cash from the exchange, related to derivative contracts transacted through an exchange. We account for such cash as a component of deposits with clearing organizations on our Condensed Consolidated Statements of Financial Condition.

In many cases, we are permitted to deliver or repledge financial instruments we have received as collateral, for our own use in our repurchase agreements, securities lending agreements, other secured borrowings, satisfaction of deposit requirements with clearing organizations, or otherwise meeting either our, or our clients, settlement requirements.

The table below presents financial instruments at fair value, that we received as collateral, are not included on our Condensed Consolidated Statements of Financial Condition, and that were available to be delivered or repledged, along with the balances of such instruments that were used to deliver or repledge, to satisfy one of our purposes described above:



	March 31, 2016			September 30, 2015
	(in thousands)
Collateral we received that is available to be delivered or repledged	$	2,076,066		$	2,308,277
Collateral that we delivered or repledged	$	1,276,079	⁽¹⁾	$	1,122,540	⁽²⁾


(1)	The collateral delivered or repledged as of March 31, 2016, includes client margin securities which we pledged with a clearing organization in the amount of $247.3 million which were applied against our requirement of $148.9 million.


(2)	The collateral delivered or repledged as of September 30, 2015, includes client margin securities which we pledged with a clearing organization in the amount of $240.7 million which were applied against our requirement of $147.6 million.

Encumbered assets

We pledge certain of our trading instrument assets to collateralize either Repurchase Agreements, other secured borrowings, or to satisfy our settlement requirements, with counterparties who may or may not have the right to deliver or repledge such securities.

The table below presents information about the fair value of our assets that have been pledged for one of the purposes described above:



	March 31, 2016			September 30, 2015
	(in thousands)
Financial instruments owned, at fair value, pledged to counterparties that:
Had the right to deliver or repledge	$	326,901		$	424,668
Did not have the right to deliver or repledge	$	25,229	⁽¹⁾	$	94,006	⁽²⁾


(1)	Assets delivered or repledged as of March 31, 2016, includes securities which we pledged with a clearing organization in the amount of $18.9 million which were applied against our requirement of $148.9 million (client margin securities we pledged which are described in the preceding table constitute the remainder of the assets pledged to meet the requirement).


(2)	Assets delivered or repledged as of September 30, 2015, includes securities which we pledged with a clearing organization in the amount of $30.5 million which were applied against our requirement of $147.6 million (client margin securities we pledged which are described in the preceding table constitute the remainder of the assets pledged to meet the requirement).

Repurchase agreements, repurchase-to-maturity transactions and securities lending transactions accounted for as secured borrowings

We enter into Repurchase Agreements where we sell securities under agreements to repurchase (“Repurchase Agreements”) and also engage in securities lending transactions. These activities are accounted for as collateralized financings. Our Repurchase Agreements would include “repurchase-to-maturity” agreements, which are repurchase agreements where a security is transferred under an agreement to repurchase and the maturity date of the repurchase agreement matches the maturity date of the underlying security, if any, that we are a party to as of period-end. As of both March 31, 2016 and September 30, 2015, we did not have any “repurchase-to-maturity” agreements. See Note 2 on pages 105 and 111, respectively, of our 2015 Form 10-K for a discussion of our respective Repurchase Agreement and securities borrowed and securities loaned accounting policies.

The following table presents the remaining contractual maturity of securities under agreements to repurchase and securities lending transactions accounted for as secured borrowings:



	Overnight and continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
	(in thousands)
As of March 31, 2016:

Repurchase agreements
Government and agency obligations	$	96,363	$	4,775	$	—	$	—	$	101,138
Agency MBS and CMOs	86,316		3,225		—		—		89,541
Total Repurchase Agreements	182,679		8,000		—		—		190,679

Securities lending
Equity securities	610,476		—		—		—		610,476
Total	$	793,155	$	8,000	$	—	$	—	$	801,155
Gross amounts of recognized liabilities for repurchase agreements and securities lending transactions included in the Offsetting Assets and Liabilities table included within this footnote									$	801,155
Amounts related to repurchase agreements and securities lending transactions not included in the Offsetting Assets and Liabilities table included within this footnote									$	—

As of September 30, 2015:

Repurchase agreements
Government and agency obligations	$	211,594	$	5,250	$	—	$	—	$	216,844
Agency MBS and CMOs	112,941		2,751		—		—		115,692
Total Repurchase Agreements	324,535		8,001		—		—		332,536

Securities lending
Equity securities	478,573		—		—		—		478,573
Total	$	803,108	$	8,001	$	—	$	—	$	811,109
Gross amounts of recognized liabilities for repurchase agreements and securities lending transactions included in the Offsetting Assets and Liabilities table included within this footnote									$	811,109
Amounts related to repurchase agreements and securities lending transactions not included in the Offsetting Assets and Liabilities table included within this footnote									$	—

We enter into Repurchase Agreements and conduct securities lending activities as components of the financing of certain of our operating activities. In the event the market value of the securities we pledge as collateral in these activities declines, we may have to post additional collateral or reduce the borrowing amounts. We monitor such levels daily.