RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Jun. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the three months ended June 30, 2023 and 2022, the Group engaged in various related party transactions, a substantial amount of which were conducted with FST Belize, a Belize company which is wholly owned personally by the Company’s chief executive officer, chairman and majority shareholder, Timur Turlov, and is not part of the FRHC group of companies. FST Belize has its own brokerage customers, which include individuals and market-maker institutions and conducts business with the Group through a client omnibus account at Freedom EU.
Fee and commission income earned from related parties is comprised primarily of brokerage commissions principally FST Belize. Fee and commission income earned from FST Belize principally consists of fees and commissions paid by FST Belize to Freedom EU to execute trades requested by brokerage customers of FST Belize, as well as commissions paid by FST Belize for order flow, which is net compensation received from firms to which the Company's broker-dealer subsidiaries send equity and options orders, and fees for outstanding short sale positions. During the three months ended June 30, 2023 and 2022, the Group earned fee and commission income from related parties in the amounts of $15,896 and $75,604, respectively. Fee and commission income generated from FST Belize accounted for approximately 92% and 100% of the Company's total related party fee and commission income for the three months ended June 30, 2023 and 2022.
Interest income earned from related parties is comprised entirely of interest income from FST Belize, principally interest income from margin lending. During the three months ended June 30, 2023 and 2022, the Group earned interest income from related parties in the amounts of $5,352 and $3,528, respectively. Interest income generated from FST Belize accounted for approximately 99% and 100% of the Company's total related party interest income for the three months ended June 30, 2023 and 2022.
During the three months ended June 30, 2023 and 2022, the Group paid fee and commission expense for brokerage services to FST Belize in the amount of $99 and $156, respectively.
Margin lending, brokerage and other receivables from related parties result principally from borrowings made under margin loans by related parties, principally FST Belize. As of June 30, 2023 and March 31, 2023, the Group had margin lending receivables with related parties totaling $384,688 and $294,985, respectively. 97% and 98% of these balances were due from FST Belize. Margin lending receivables from FST Belize principally represent margin loans granted by Freedom EU to FST Belize. As of June 30, 2023 and March 31, 2023, the Group had bank commission receivables and receivables from brokerage clients from related parties totaling $640 and $626, respectively.
As of June 30, 2023 and March 31, 2023, the Group had a prepayment on acquisition of Internet Tourism LLP and Aviata LLP in the amount of $— and $16,089, respectively.
As of June 30, 2023 and March 31, 2023, the Group had a payable for acquisition of Internet Tourism LLP and Aviata LLP from Chocofamily Holding Ltd in the amount of $15,769 and $—, respectively.
As of June 30, 2023 and March 31, 2023, the Group had customer liabilities to related parties totaling $79,679 and $130,210, respectively. As of June 30, 2023 and March 31, 2023, 71% and 18%, respectively, of these balances were deposits from FST Belize held by Freedom EU related to brokerage services provided by Freedom EU to FST Belize, whereas 3% and 36%, respectively, were from Fresh Start Trading LTD, a company outside of the FRHC group which is primarily owned by Denis Matafonov, who is an executive director and board member of Freedom EU.
As of June 30, 2023 and March 31, 2023, the Group had restricted customer cash deposited in current and brokerage accounts with related parties in the amounts of $59,914 and $114,885. As of June 30, 2023 and March 31, 2023, 100% and 40%, respectively, of these balances were from FST Belize.
As of June 30, 2023 and March 31, 2023, the Group had loans issued which includes uncollateralized bank customer loans purchased from a related party, FFIN Credit a company outside of the FRHC group which is controlled by Timur Turlov, in the amount of $142,336 and $121,177, respectively.
As of June 30, 2023 and March 31, 2023, the Group had loans received from Timur Turlov in the amount of $7,735 and $—, respectively. The proceeds of such loans were contributed by the Group to the capital of its Arbuz subsidiary.
Margin lending, brokerage and related banking services were provided to related parties pursuant to standard client account agreements and at standard market rates.
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