Aggregate Indebtedness
Aggregate indebtedness (AI) is the sum of all a broker-dealer’s liabilities, as presented on a balance sheet, that are either unsecured or secured by assets belonging to someone other than the broker-dealer. Aggregate indebtedness includes:
- • Accounts payable, such as:
- » Customers’ cash accounts
- » Customers’ free credit balances
- » Dividends payable
- » Credit balances in customer accounts having short positions
- • Wages and taxes payable
- • Syndicate payable
- • Monies or securities borrowed that are:
- » Unsecured
- » Secured by customer assets
- • Securities loaned that are:
- » Customer owned
- » Proprietary and not hedged by an offsetting long position
- • Fails to receive:
- » For customers’ accounts
- » For the firm’s own account, where not hedged by an offsetting long position
Aggregate indebtedness does not include liabilities that the broker-dealer has secured from assets of its own. Nor does it include liabilities that are subject to a haircut deduction. For example:
- • Liabilities secured by the firm’s own assets:
- » Fixed liabilities, secured by assets, acquired for use in the ordinary course of business, such as computers
- » Amounts payable and on deposit in a customer reserve bank account
- » Securities borrowed and carried long or collateralized by a secured demand note
- » Securities loaned that are hedged by an offsetting long position
- » Mortgages payable and secured by the mortgaged property
- » Fails to receive that are hedged by an offsetting long position
- • Securities subject to a haircut:
- » When-issued securities
- » Short positions in the fi