RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the three months ended September 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 September 30, 2023 and 2022, the Group earned fee and commission income from related parties in the amounts of $20,022 and $61,149, respectively. Fee and commission income generated from FST Belize accounted for approximately 97% and 100% of the Company's total related party fee and commission income for the three months ended September 30, 2023 and 2022. For the three months ended September 30, 2023, 1% of fee and commission income relates to management, and 2% to companies controlled by management. During the six months ended September 30, 2023 and 2022, the Group earned fee and commission income from related parties in the amounts of $35,917 and $136,749, respectively. Fee and commission income generated from FST Belize accounted for approximately 95% and 100% of the Company's total related party fee and commission income for the six months ended September 30, 2023 and 2022. For the six months ended September 30, 2023, 1% of fee and commission income relates to management, 4% to companies controlled by management.
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 September 30, 2023 and 2022, the Group earned interest income from related parties in the amounts of $9,731 and $7,392, respectively. Interest income generated from FST Belize accounted for approximately 97% and 100% of the Company's total related party interest income for the three months ended September 30, 2023 and 2022. During the six months ended September 30, 2023 and 2022, the Group earned interest income from related parties in the amounts of $15,084 and $10,920, respectively. Interest income generated from FST Belize accounted for approximately 98% and 99% of the Company's total related party interest income for the six months ended September 30, 2023 and 2022.
During the three months ended September 30, 2023 and 2022, the Group paid fee and commission expense for brokerage services to FST Belize in the amount of $81 and $196, respectively. During the six months ended September 30, 2023 and 2022, the Group paid fee and commission expense for brokerage services to FST Belize in the amount of $179 and 353, respectively.
During the three months ended September 30, 2023 and 2022, the Group had general and administrative expense in the amount of $5,229 and $0. General and administrative expense to Chess Federation of the Republic of Kazakhstan accounted approximately 92% and 0% of the Company's total related party general and administrative expense for the three months ended September 30, 2023 and 2022. During the six months ended September 30, 2023 and 2022, the Group had general and administrative expense in the amount of $7,561 and $0. General and administrative expense to Chess Federation of the Republic of Kazakhstan accounted approximately 88% and 0% of the Company's total related party general and administrative expense for the six months ended September 30, 2023 and 2022.
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 September 30, 2023 and March 31, 2023, the Group had margin lending receivables with related parties totaling $413,560 and $294,985, respectively. 96% 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 September 30, 2023, 2% of margin lending, brokerage and other receivables relates to management, and 2% to companies controlled by management. As of March 31, 2023, 1.5% of margin lending, brokerage and other receivables relates to management, and 0.5% to companies controlled by management. As of
September 30, 2023 and March 31, 2023, the Group had bank commission receivables and receivables from brokerage clients from related parties totaling $154 and $626, respectively.
As of September 30, 2023 and March 31, 2023, the Group had a prepayment on acquisition of Internet Tourism LLP and Aviata LLP in the amount of $0 and $16,089, respectively.
As of September 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 $0, respectively.
As of September 30, 2023 and March 31, 2023, the Group had customer liabilities to related parties totaling $121,974 and $130,210, respectively. As of September 30, 2023 and March 31, 2023, 81% 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 1% and 37%, 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 September 30, 2023, 5% of customer liabilities relates to management, and 13% to companies controlled by management. As of March 31, 2023, 11% of customer liabilities relates to management, and 34% to companies controlled by management.
As of September 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 $62,965 and $114,885. As of September 30, 2023 and March 31, 2023, 100% and 40%, respectively, of these balances were from FST Belize.
As of September 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 $135,132 and $121,177, respectively.
As of September 30, 2023 and March 31, 2023, the Group had loans received in the amount of $7,621 and $0, respectively. As of September 30, 2023 and March 31, 2023, 97% and 0%, respectively, of these balances were loans from Timur Turlov. The proceeds of such loans were contributed by the Group to the capital of its Arbuz subsidiary.
As of September 30, 2023 and March 31, 2023, the Group had other liabilities in the amount of $4,108 and $46, respectively. As of September 30, 2023 and March 31, 2023, 63% and 0%, respectively, of these balances were to FST Belize.
As of September 30, 2023 and March 31, 2023, the Group had trading securities in the amount of $15,816 and $556, respectively. As of September 30, 2023 and March 31, 2023, 100% and 0%, respectively, of these balances were from Chocofamily Holding Ltd.
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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