Net Capital Requirements

What this video covers

• What adjusted net capital broadly measures: current assets minus liabilities minus certain charges, and why it is a conservative liquid cushion
• Why a Futures Commission Merchant (FCM) carries the $1,000,000 minimum, and how that connects to holding customer funds and clearing trades
• Why an independent Introducing Broker (IB) keeps $45,000, and the broker-dealer exception that can satisfy this requirement instead
• Why a guaranteed IB has zero net capital requirement, and how the guarantee agreement shifts responsibility to its single guarantor FCM
• The continuous capital rule: adjusted net capital must stay at or above the minimum at all times, not just on reporting dates
• The exam's most common trap: handing the guaranteed IB a capital minimum or allowing a temporary dip below the floor between reports