Cash and Securities Segregated for Regulatory and Other Purposes

3 Months Ended

Mar. 31, 2013

Cash and Securities Segregated for Regulatory and Other Purposes

Cash and Securities Segregated for Regulatory and Other Purposes

4.  Cash and Securities Segregated for Regulatory and Other Purposes

The Company self-clears its trading activities in U.S. government securities (the “Rates business”) and is therefore subject to the Customer Protection rules under Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These activities will be discontinued in the second quarter of 2013.  At March 31, 2013 and December 31, 2012, the Company segregated cash of $1.0 million and $1.0 million, respectively, in a special reserve bank account for the exclusive benefit of customers pertaining to the activities of the Company’s Rates business and items related to when the Company was previously conducting self-clearing in prior years, including outstanding checks issued to customers and vendors, and other miscellaneous items.

In addition, cash and securities segregated for regulatory and other purposes at March 31, 2013 include $5.0 million, representing cash deposited into an escrow account by ClearPoint in connection with the Homeward Transaction.   Refer to Note 16 herein for additional information.  Cash segregated at December 31, 2012 includes $12.0 million of cash on deposit with ClearPoint’s warehouse lenders in connection with ClearPoint’s loan origination activities, now discontinued.