MARGIN LENDING, BROKERAGE AND OTHER RECEIVABLES, NET |
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MARGIN LENDING, BROKERAGE AND OTHER RECEIVABLES, NET | MARGIN LENDING, BROKERAGE AND OTHER RECEIVABLES, NET Margin lending, brokerage and other receivables, net of the Company are comprised of the following:
Margin lending receivables are amounts owed to the Company from customers as a result of borrowings by such customers against the value of qualifying securities, primarily for the purpose of purchasing additional securities. Amounts may fluctuate from period to period as overall client balances change as a result of market levels, client positioning and leverage. Credit exposures arising from margin lending activities are generally mitigated by their short-term nature, the value of collateral held and our right to call for margin when collateral values decline.
The fair value of collateral received by the Company under margin loans as of March 31, 2023, and March 31, 2022 was $1,418,129 and $4,432,621, respectively.
As of March 31, 2023 and March 31, 2022, amounts due from a single related party customer were $290,195 and $102,669, respectively or 78% and 73% respectively, of total margin lending, brokerage and other receivables, net. Approximately 98% and 95% of these balances were due from Freedom Securities Trading Inc. (formerly known as FFIN Brokerage Services, Inc.) (“FST Belize”), a company owned by the Company's controlling shareholder, chairman and chief executive officer, Timur Turlov. Based on historical data, the Company considers receivables due from related parties fully collectible.
For both individual and institutional brokerage clients, we may enter into arrangements for securities financing transactions in respect of financial instruments held by us on behalf of the client or may use such financial instruments for our own account or the account of another client. We maintain omnibus brokerage accounts for certain institutional brokerage clients, in which transactions of the underlying clients of such institutional clients are combined in a single account with us. As noted above, we may use the assets within the omnibus accounts to finance, lend, provide credit or provide debt financing or otherwise use and direct the order or manner of assets for financing of other clients of ours.
As of March 31, 2023, margin lending receivable balance from FST Belize was fully collateralized by its customer-owned cash and market securities held by the Company, including $37.1 million margin lending receivable collateralized by FRHC securities. Customers’ required margin levels and established credit limits are monitored continuously by risk management staff. Pursuant to the Company’s policy, customers are required to deposit additional collateral or reduce positions, when necessary, to avoid liquidation of their positions.
As of March 31, 2023 and March 31, 2022 using historical and statistical data, the Company recorded an allowance for brokerage receivables in the amounts of $12,507, $2,107 respectively.
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