Annual report pursuant to Section 13 and 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
 12 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Year ended
March 31, 2024
Year ended
March 31, 2023
Related party balances Total category as per financial statements captions Related party balances Total category as per financial statements captions
ASSETS
Cash and cash equivalents $ 203  $ 545,084  $ 35,549  $ 581,417 
Companies controlled by management
 203  35,549 
Restricted cash $ —  $ 462,637  $ 114,885  $ 445,528 
Companies controlled by management
 —  114,885 
Trading securities $ 1,326  $ 3,688,620  $ 556  $ 2,412,556 
Companies controlled by management
 1,326  556 
Margin lending, brokerage and other receivables, net
 $ 22,039  $ 1,660,275  $ 295,611  $ 376,329 
Management 8,849  4,209 
Companies controlled by management
 13,190  291,402 
Loans issued $ 147,440  $ 1,381,715  $ 121,316  $ 826,258 
Management 117  139 
Companies controlled by management
 147,323  121,177 
Other assets, net $ 5,257  $ 102,414  $ 16,102  $ 73,463 
Companies controlled by management
 5,257  16,102 
LIABILITIES
Customer liabilities $ 44,127  $ 2,273,830  $ 130,210  $ 1,925,247 
Management 12,604  19,789 
Companies controlled by management
 31,253  110,253 
Other
 270  168 
Margin lending and trade payables $ 507  $ 867,880  $ 3,721  $ 122,900 
Management 226  227 
Companies controlled by management
 281  3,494 
Liabilities from insurance activity $ 470  $ 297,180  $ 34  $ 182,502 
Companies controlled by management
 470  34 
Other liabilities $ 9,854  $ 81,560  $ 46  $ 30,060 
Management 7,947  — 
Companies controlled by management
 1,907  46 
Year ended
March 31, 2024
Year ended
March 31, 2023
Year ended
March 31, 2022
Related party amounts
 Total category as per financial statements captions
Related party amounts
 Total category as per financial statements captions
Related party amounts
 Total category as per financial statements captions
Revenue:
Fee and commission income $ 65,972  $ 440,333  $ 199,235  $ 327,215  $ 291,163  $ 335,211 
Management 935  806  729 
Companies controlled by management
 65,035  198,428  290,434 
Other
 2  1  — 
Interest income $ 24,941  $ 828,224  $ 23,191  $ 294,695  $ 10,191  $ 121,609 
Management 665  18  — 
Companies controlled by management
 24,276  23,173  10,191 
Expense:
Fee and commission expense $ 127  $ 154,351  $ 2,988  $ 65,660  $ 16,307  $ 85,909 
Companies controlled by management
 127  2,988  16,307 
Interest expense $ 955  $ 501,111  $ 1,578  $ 208,947  $ 217  $ 76,947 
Management 307  431  1 
Companies controlled by management
 642  1,146  216 
Other
 6  1  — 
General and administrative expenses $ 10,341  $ 120,888  $ 2,953  $ 59,971  $ 790  $ 23,533 
Management 587  808  — 
Companies controlled by management
 9,754  2,145  790 
During the years ended March 31, 2024 and 2023, 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 accounts 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. For the year ended March 31, 2024 and 2023 fee and commission income from FST Belize accounted for approximately 93% and 99% of the Group's total related party fee and commission income. The decrease in fee and commission income generated from FST Belize as a percentage of our total fee and commission income between the year ended March 31, 2024 and 2023 was due to a decrease in the volume of trading activity by FST Belize through its omnibus accounts with us between the respective periods, as a result of ongoing joint efforts by us and FST Belize to encourage clients of FST Belize to open accounts at Freedom Global and Freedom Armenia and conduct ongoing trading through such accounts, consistent with our strategy to reduce the volume of business that was being conducted involving FST Belize.
Interest income earned from related parties is comprised entirely of interest income from FST Belize, principally interest income from margin lending. During the years ended March 31, 2024 and 2023, the Group earned interest income generated from FST Belize accounted for approximately 93% and 100% of the Company's total related party interest income for the years ended March 31, 2024 and 2023.
Margin lending, brokerage and other receivables from related parties principally represent margin lending receivables in respect of margin loans granted by Freedom EU to FST Belize. As of March 31, 2024 and March 31, 2023, the Group's margin lending receivables from FST Belize accounted for —% and 98% of the Group's total margin lending, brokerage and other receivables from related parties. The decrease in margin lending and brokerage receivables due from FST Belize was attributable to a significant reduction in the volume of business we conducted involving FST Belize between the two dates, consistent with our plan to ultimately eliminate our omnibus brokerage arrangement with FST Belize.

As of March 31, 2024 and March 31, 2023, 2% and 18%, respectively, of the Group's customer liabilities were deposits from FST Belize held by Freedom EU related to brokerage services provided by Freedom EU to FST Belize. Part of these deposits as of March 31, 2024 represent funds retained as proceeds following the closing of margin lending and short positions by FST Belize in connection with FST Belize closing its positions in its omnibus accounts of Freedom EU, consistent with our plan to ultimately eliminate our omnibus brokerage arrangement with FST Belize.
As of March 31, 2024, and March 31, 2023 the Group had loans issued which included uncollateralized bank customer loans purchased from a related party, FFIN Credit a company outside of the FRHC group which is controlled by Timur Turlov.
Margin lending, brokerage and related banking services were provided to related parties pursuant to standard client account agreements and at standard market rates.