11. Capital and Reserve Requirement Information

As a broker-dealer registered with the SEC, our subsidiary VP Distributors, LLC (“VPD”) is subject to certain rules regarding minimum net capital. VPD operates pursuant to Rule 15c3-1(a), promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and, accordingly, is required to maintain a ratio of “aggregate indebtedness” to “net capital” (as those items are defined in the rule) which may not exceed 15.0 to 1.0.

Aggregate indebtedness, net capital, and the resultant ratio for VPD were as follows:


	December 31,
	2012		2011		2010
*($ in thousands)*
Aggregate indebtedness	$	23,443	$	17,527	$	19,315
Net capital		16,617		10,874		4,812
Ratio of aggregate indebtedness to net capital		1.4 to 1		1.6 to 1		4.0 to 1

VPD’s minimum required net capital at December 31, 2012 and 2011 based on its aggregate indebtedness on those dates was $1.6 million and $1.2 million, respectively.

The operations of VPD do not include the physical handling of securities or the maintenance of open customer accounts. Accordingly, VPD is exempt from the reserve provisions of Rule 15c3-3 promulgated under the Exchange Act under the exemption allowed by paragraph (k)(2)(i) of such rule.