Circular 90/2: Periodic Statements

Brussels, March 13, 1990.

C.G.W

CIRCULAR No 90/2

Dear Member,

WE have the honor to communicate to you the attached model of periodic statements that brokerage firms constituted as companies are invited to establish and transmit to the Guarantee Fund, according to the modalities described below.

These statements must enable the Guarantee Fund to effectively exercise its preventive control mission, namely:

• to verify their accounting;
• to exercise continuous monitoring of the financial situation of the firms as well as the risks they incur and impose.

As indispensable instruments of prudential control, their importance is highlighted in the draft law relating to financial operations and financial markets, since the obligation for stock exchange companies to provide information at least quarterly is the subject of a specific provision.

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Part 1

Since the establishment of the Guarantee Fund, stockbrokers have been invited to provide their annual accounts. This first step allowed us to become aware of the financial situation of the firms. In a second stage, the transmission of financial situations moved to a semi-annual frequency. However, as announced in Circulars 88/1 and 88/2, this was an intermediate stage towards the transmission of information on a quarterly basis.

This transition period was justified both by the need for the Guarantee Fund to develop its own organization and by the efforts required by many firms to adapt and update their administrative and accounting organization.

Unless exceptional, this adaptation and updating process must have reached its conclusion, and brokerage firms should now be able to provide the requested information without major difficulties.

However, considering that the activity of stockbroker can no longer be exercised within the framework of a stock exchange company from January 1, 1991, it did not seem appropriate to subject stockbrokers who still temporarily exercise their activity as individuals to this periodic information obligation. These stockbrokers remain however required to communicate their semi-annual situation as of June 30, 1990 within the same time limits as those provided by this circular for periodic statements.

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Part 2

The periodic statements essentially comprise two parts: on the one hand, a balance sheet and an income statement, and on the other hand, annexes. They are accompanied by detailed explanatory notes designed to guide firms in establishing the various statements. It goes without saying that the Guarantee Fund's services are available to members to provide any complementary information.

WE draw your particular attention to the following elements:

• The model of the balance sheet (active and passive) and the income statement is essentially based on the accounting plan applicable to stockbrokers (Rochette plan) in force for many years;
• It differs, however, regarding the treatment of the firms' securities portfolios and their results. Indeed, all of the firm's securities are now grouped under a single heading titled "Positions". In accordance with a widely established practice, these securities are no longer considered as cash placements but as merchant goods and are subject to periodic market valuations.

In the same spirit, the results on positions are considered to be the results of the operation of the brokerage firm and no longer as financial results;

• It also differs regarding the accounts for "securities to be received" and "securities to be delivered". The use of these accounts as provided by the "Rochette plan" posed various types of problems, and many firms had chosen not to integrate them into their general accounting, preferring to track securities flows using extra-accounting systems or securities accounting.

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Part 3

This issue relates to the organization of an accounting for off-balance sheet rights and commitments, which seemed preferable to address separately from these periodic statements. It will be the subject of a future circular;

• The annexed statements aim to inform the Guarantee Fund of the risks associated with the activities of stockbrokers which are not reflected in standard financial statements.

These are essentially risks related to:
. the holding of a portfolio of securities for own account; . speculative activity (carry operations); . operations on instruments with high risk (options); . as well as the importance and age of claims on debtors.

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Starting from the 1990 fiscal year, brokerage firms are invited to provide the Guarantee Fund, quarterly and before the 20th of the month following the end of the quarter, the requested information based on the model attached as an annex. Pre-printed copies of this model are available at the Secretariat of the Guarantee Fund as well as at the registries of the Stock Exchange Commissions of the Kingdom.

Given the date of publication of this circular and the time necessary for firms to adapt to the new procedure, the deadline for communicating the statements concerning the first quarter is extended by one month and set to May 20, 1990.

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Part 4

Firms that encounter major difficulties in establishing certain of the requested statements are invited to voluntarily contact the services of the Guarantee Fund in order to allow a case-by-case examination of these difficulties and to find appropriate solutions.

Please accept, dear Member, the expression of our distinguished sentiments.

A. NIESTEN,
Managing Director

J. REYERS,
President

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PERIODIC STATEMENTS

Firm Name ..................
Situation as of ...............

1. ASSETS

I. Establishment costs
II. Intangible fixed assets
III. Tangible fixed assets
IV. Financial fixed assets
A. Affiliated companies and companies with which there is a participation link:
1. Participations
2. Claims
B. Other financial fixed assets
C. Cash deposits as guarantees
V. Claims
A. Commercial claims
1. Private clients
2. Professional clients & counterparties
3. Partners
4. Other commercial claims
5. Doubtful claims
B. Other claims
1. Partners
2. Other claims
VI. Positions
A. Securities
1. Currencies and precious metals
VII. Cash placements and available values
A. Time deposits
1. Deposits of more than one month
2. Deposits of one month or less
B. Current accounts, cash
C. Other available values
VIII. Adjustment accounts
Total

2. LIABILITIES

I. Capital
II. Share premiums
III. Revaluation reserves
IV. Reserves
V. Retained earnings (+) or accumulated loss (-)
VI. Result at the end of the period
VII. Provisions for risks and charges
VIII. Liabilities of more than one year
A. Subordinated loans
B. Financial liabilities
C. Other liabilities
IX. Liabilities of one year or less
A. Financial liabilities
B. Commercial liabilities
1. Private clients
2. Professional clients & counterparties
3. Suppliers of goods and services
4. Other commercial liabilities
C. Tax, social, and wage liabilities
D. Other liabilities
1. Partners
2. Other liabilities
X. Positions
XI. Adjustment accounts
Total

3. INCOME STATEMENT

I. Services
A. On securities:
1. Brokerage fees
2. Commissions
3. Net results on positions
3.1 Net results
3.2 Income
4. Custody fees
5. Other income
B. On currencies and precious metals:
1. Net results on positions
2. Commissions
3. Other results
C. Other operating income:
II. Cost of services
A. Various goods and services:
B. Remuneration, social charges, and pensions:
C. Depreciations and value reductions:
D. Provisions for risks and charges:
E. Other operating expenses:
III. Operating profit (loss)
IV. Financial income
A. Income from financial fixed assets:
B. Income from cash placements:
C. Other financial income:
V. Financial charges
A. Charges on liabilities:
1. Credit institutions
2. Interest on commercial liabilities
3. Other charges
B. Other financial charges:
VI. Current profit before taxes
VII. Extraordinary results
VIII. Profit (loss) before taxes
IX. Taxes
C. Result at the end of the period

4. ANNEXED STATEMENT No 1: DETAIL BY CATEGORY OF POSITIONS IN SECURITIES

Bullish Bearish Total
(1) (2) (1) (2) (3) (4) (5)

1. SHARES
A. Listed shares
B. Unlisted shares

2. DEBT SECURITIES
A. Listed debt securities
1. State and public sector debt securities
2. Other debt securities
B. Unlisted debt securities
1. Treasury bills
2. Others

3. UNITS IN COLLECTIVE INVESTMENT UNDERTAKINGS

4. OTHERS
A. Listed instruments
B. Unlisted instruments

5. TOTAL
A. Values denominated in BEF a. Values denominated in currencies (converted to BEF) B. Foreign values
C. Total

(1) Belgian values, denominated in BEF or currencies (converted to BEF).
(2) Foreign values, denominated in BEF or currencies (converted to BEF).
(3) Total of Belgian and foreign values on the bullish side.
(4) Total of Belgian and foreign values on the bearish side.
(5) Net position (bullish positions minus bearish positions).

5. ANNEXED STATEMENT No 2: FORWARD OPERATIONS

Amounts of Operations in progress
At the end of the quarter

Stock Exchange of Brussels Other Forward Operations Forward Market in Securities To purchase To sell To purchase To sell

1. Clients/Professionals
2. Partners
3. Personnel
4. For own account
   Total

6. ANNEXED STATEMENT No 3: CARRY OPERATIONS

Q1 Q2 Q3 Q4 Q5 Q6

A. By category of carry

1. Stock exchange carry
2. Bank carry
3. Own means carry
4. Total

B. By category of order givers

1. Private and professional clients
2. Partners
3. Personnel
4. For own account
5. Total

C. Information relating to carry operations in progress.
(1) Amount of guarantees deposited at the request of the Forward Cooperative: . . . . . . . . . . . . . .
(2) a) Amount financed by banks: . . . . . . . . . . . . . . b) Amount of additional guarantees: . . . . . . . . . . . . . .

7. ANNEXED STATEMENT No 4: OPTIONS TRADED.

A. Status of received positions and coverages.

Call

1. Private clients
2. Professional clients
3. Partners
4. Personnel
5. For own account
6. Total

Put

1. Private clients
2. Professional clients
3. Partners
4. Personnel
5. For own account
6. Total

Amount of margins
Positions (1) Securities (2)

B. Status of coverages given.
(Please specify the name of the organization or depositary intermediaries of the coverages - POM, POCM, clearing member,...):

Coverages
In cash In securities (2)

1. ...................
2. ...................
3. ...................
4. ...................
5. ...................
6. Total . . . . . . . . . . . . . . . .

(1) Amount of positions: number of contracts x number of securities per contract x underlying value evaluated at market price.
(2) Securities valued at market price.
(3) Amount of positions: number of contracts x number of securities per contract x exercise price of the option.

8. ANNEXED STATEMENT No 5: COMMERCIAL CLAIMS DUE FOR MORE THAN ONE MONTH AND DOUBTFUL CLAIMS

A. Commercial claims included under sub-items V.A.1 to 4 of the assets Account number, debit balance, comments Company name 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
.
Total

a. Doubtful claims (sub-item V.A.5 of the assets) Account number, debit balance, provisions Company name, securities 1.
2.
3.
4.
Comments
.
Total

9. ANNEXED STATEMENT No 6: ONGOING LITIGATION.

1. Evolution of litigation previously reported
File date 1st communication Amount Status of coverage 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
.

2. List of insurance policies
Insurer(s) Risks covered
1. Cause (1) Procedure (2) Insurance
Maximum coverage amount Deductible amount
2.
3.
4.
5.

3. Description of new litigation
Please mention: file name; origin and nature of the litigation; amount involved; status of the procedure; insurance policy; estimation regarding the outcome and consequences of the litigation.

1) Litigious claims: positive sign.
Litigious debts & commitments: negative sign.
2) To be filled in once a year, except in case of change during the year.

10. COMMENTS RELATING TO VARIOUS ITEMS OF THE PERIODIC STATEMENTS AND TO THE ANNEXED STATEMENTS

1. GENERALITIES

The periodic statements will be established on the pre-printed model that the Guarantee Fund and the Stock Exchange Commissions will make available to members. Firms wishing to communicate the periodic statements on magnetic media are invited to contact the services of the Guarantee Fund.

The periodic statements form a whole: the balance sheet (active and passive), the income statement, as well as all annexes will be transmitted by the firms. The annexed statements that do not apply to them will bear the mention "not applicable".

The model of the balance sheet (active and passive), as well as the income statement, includes for indicative purposes next to each line, the corresponding account numbers of the "Rochette" accounting plan.

2. BALANCE SHEET (ACTIVE AND PASSIVE)

2.1. The figures to transmit for the balance sheet (active and passive) are those finalized on the last day of the concerned quarter (3X.T.19XX), on the one hand, and those finalized on the last day of the previous quarter (3X.T-1.19XX), on the other hand.

2.2. Comments

• Financial fixed assets (item IV. of the assets): this item comprises three subdivisions:
  A. "Affiliated companies and companies with which there is a participation link": participations (IV.A.1) in and claims (IV.A.2) on affiliated companies, participations (IV.A.1) in and claims (IV.A.2) on companies with which there is a participation link (within the meaning of the Royal Decree of October 8, 1976) are classified under this sub-item; B. "Other financial fixed assets": shares and units held in companies with the aim of creating a lasting link with them, and which do not fall under the participations mentioned under A, are classified under this sub-item. By lasting link, one must understand stable links of a professional (Guarantee Fund of Stockbrokers, Forward Liquidation Cooperative,...), financial, and/or commercial nature. A portfolio of securities constituted solely for the purpose of making a medium or long-term fund placement does not correspond to the criterion of a lasting link, and must therefore be classified under the item of positions in securities (item VI-A. of the assets or X. of the liabilities).

C. "Cash deposits as guarantees": cash deposits made as permanent guarantees to certain institutions and companies (RTT guarantees, rental guarantees,...) are recorded under this sub-item. Guarantees in the form of securities remain classified under the item of positions in securities (item VI-A. of the assets or X. of the liabilities).

The rules for evaluating financial fixed assets are those stated in articles 29 § 2 and 34 of the Royal Decree of October 8, 1976.

In substance:

• participations and shares are subject to value reductions in case of permanent loss of value or depreciation justified by the situation, profitability, or prospects of the company in which the participation or shares are held.
  Claims recorded under financial fixed assets are subject to value reductions if their repayment at maturity is in whole or in part uncertain or compromised;

• participations and shares may be revalued when the value of these, determined based on their utility for the company, presents a certain and permanent excess compared to their book value.
  Revaluation reserves are credited directly to item III. of the liabilities "Revaluation reserves" and are maintained there as long as the participations and shares to which they relate are not realized. These reserves may, however, be cancelled to the extent of subsequent losses, for the unamortized amount.

• claims (item V. of the assets)
  A. Commercial claims (item V. A. of the assets): this sub-item comprises five subdivisions:

• 1. "Private clients": claims of the firm on natural or legal persons and on associations in which an investment in securities generally does not have a professional character are listed under this item.
• 2. "Professional clients & counterparties": claims of the firm on institutional clients (insurance companies, pension funds, holding companies,...), on Belgian and foreign banks, on Belgian and foreign stockbrokers (1), considered either as clients or as counterparties, are listed under this item.
• 3. "Partners": claims of the firm on its partners from transactions in securities, currencies, or precious metals are recorded under this item.
• 4. "Other commercial claims": various margins (initial & variation margins), paid in cash by the stockbroker to financial intermediaries in the context of options and/or futures operations, etc., are notably listed under this item.
• 5. "Doubtful claims": any commercial claim (on private clients, on institutional and professional clients, on counterparties, and on other commercial debtors) whose repayment is considered, according to the valuation rules in force in the firm, as doubtful is classified under this item.

B. Other claims (sub-item V.B. of the assets): the following claims are recorded under this sub-item:

• "1. Partners": claims on partners in the context of withdrawals or advance payments of income tax on natural persons belonging to partners, etc...
• "2. Other claims": this item notably includes the sum of taxes recoverable from tax administrations following advance payments and recoverable withholding taxes, insofar as these payments and withholding taxes exceed the estimated amount of taxes due.

(1) In the periodic statements, the notion "stockbroker" refers to the function of the latter: it can therefore mean, depending on the case, stockbroker as a natural person, stock exchange company, brokers & dealers, etc...

• positions (item VI. of the assets)

1. The item of positions comprises two subdivisions:
   A. "Securities": this sub-item includes, with the exception of those held as financial fixed assets (see above), all of the firm's securities assets, including derivative instruments. It notably includes the accounts "Portfolio", "Applications", "Markets", "Arbitrage", etc... where securities intended to be "delivered to clients", the "house" portfolio, the trading and market-making portfolio, the error portfolio, etc... are accounted for. It also includes the firm's positions in securities qualified as investment portfolios in the circulars of the Stock Exchange Commissions regarding additional rights for "agents". Purchased options are accounted for under this sub-item to the extent of the premium paid. Issued options are considered as bearish positions and are accounted for to the extent of the premium received. In the balance sheet (active and passive), the position in securities is presented as a net amount (bullish positions minus bearish positions): it will be recorded in the assets (item VI. A) or in the liabilities (item X) depending on whether this net amount is positive or negative. The annexed statement No 1 provides the detail of bullish and bearish positions in securities.

B. "Currencies and precious metals": under this item is recorded the center-value in BEF of the stock allocated to the trade of currencies and precious metals.

14.
2. Evaluation of positions.
Positions in securities, currencies, and precious metals are valued at the rate of the last day of the quarter.
The results on securities (results of exchange and results of the conversion into BEF of the currency in which these values are expressed) are included under the item “I.A.3. Net results on positions” of the income statement. The results on currencies and precious metals are included under the item “I.B.1. Net results on positions” of the income statement. To the extent that the firm has adopted a method of accounting for its securities operations allowing it to distinguish, operation by operation, the realized results from the unrealized results, the firm is authorized to record the positive revaluation results of its positions in regularization accounts, rather than in the income account. In this accounting method, the acquisition value of the securities will be fixed in accordance with the provisions of Article 33 of the Royal Decree of October 8, 1976 determining the authorized valuation methods. A specific regularization account entitled “Unrealized capital gains on positions” will be listed separately in the active and passive situation of the periodic statements. Entries relating to the recording of unrealized capital gains will be reversed on the first day of the following period.

• cash placements and available values (item VII. of the asset): the item comprises three subdivisions:
  A. “Term deposits”: this item comprises deposits for more than one month, on the one hand, and deposits for one month or less, on the other hand. a. “Demand accounts, cash”: this item comprises account balances with credit institutions, the Postal Checks Office, and other financial institutions, as well as available cash in the vault.
  C. “Other available values”: this item comprises values due for collection, internal transfers, etc...

b
15.

• commercial debts (item IX. B. of the liability): the item of commercial debts comprises four subdivisions:

• 1. "Privileged clients": debts of the firm towards privileged clients and associates arising from transactions in securities, currencies, and precious metals are classified under this sub-item (see comments under items V.A.1. and V.A.3. of the asset).
• 2. "Professional clients and counterparties": debts of the firm towards institutional clients, Belgian or foreign banks, and Belgian or foreign stockbrokers, considered either as clients or as counterparties, are classified under this sub-item (see comments under item V.A.2 of the asset).
• 3. "Suppliers of goods and services".
• 4. "Other commercial debts".

• other debts (sub-item IX. D. of the liability): this sub-item comprises the following two items:

• 1. "Associates": the credit balances of current accounts of associates are listed under this item.
• 2. "Other debts".

• regularization accounts (item XI. of the liability): this item notably includes unrealized capital gains on positions, in the case where the firm does not record these revaluation results in the income account (see above).

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16.
3. INCOME STATEMENT
3.1. The figures to be transmitted for the income statement are the cumulative figures as of the closing date of the quarter (3X.T.19XX), on the one hand, and those relating to the corresponding quarter of the previous accounting year (3X.T.19XX-1), on the other hand.
3.2. Comments

• services: a distinction is made between three categories of operating income:
  A. Products relating to operations and services in securities (services on securities); B. Products relating to operations and services in currencies and precious metals (services on currencies and precious metals);
  C. Other operating income.
  These three categories of income are classified in the income statement of the periodic statements as follows:
  A. Services on securities (item I.A. of the income statement): this item comprises five sub-items:

1. "Brokerage fees": brokerage fees received on securities operations as well as brokerage fees retroceded to the firm are classified under this sub-item (2).
2. “Commissions”: subscription commissions, as well as any other commission received in the context of intermediary activities in the field of securities, are classified under this sub-item (3).
   (2) In the firm's accounting plan, distinct accounts will be created to record gross brokerage fees and retrocessions of brokerage fees by category of order givers.
   (3) See note 2.

17.
3. "Net results on positions": this sub-item comprises two subdivisions:

• item 3.1 includes all results, including exchange differences on securities denominated in currencies, both realized and unrealized, on positions in securities (4).
• item 3.2 includes the amount of financial income (coupons, interest, ...) of securities accounted for under the item of positions in securities.
  4. "Custody fees": this sub-item includes custody fees received by the firm.
  5. "Other income": this sub-item includes various income realized from services provided in securities in the broad sense (investment advice, coupon service, "financial engineering" services, rental of safe deposit boxes,...).

B. Services on currencies and precious metals (item I.B. of the income statement): this item is subdivided into three sub-items:
1. "Net results on currencies and precious metals": these are the net results - that is to say the difference between purchases and sales, taking into account the variation in stock - of the currency dealer (banknotes) and precious metals, as well as the results accrued upon the revaluation of stocks.
2. "Commissions": this refers to the remuneration that the stockbroker receives for his activities as a broker in currencies and/or precious metals. In this type of transaction, the role of the stockbroker is to bring the parties together in exchange for a commission.
3. "Other results".
C. Other operating income (item I.C. of the income statement): this refers to income that has no link with the activity of the stockbroker in securities, currencies, or precious metals (insurance recoveries, rental income from real estate,...).
(4) We recall the possibility of recording - under certain conditions - unrealized capital gains in a regularization account (see page 14).

18.

• financial income (item IV. of the income statement): these income items are broken down into:
  A.
  B.
  C.
  "Income from financial fixed assets"
  "Income from cash placements": this sub-item includes income from cash placements, notably income from term accounts with credit institutions, as well as income from financing of carry-over operations carried out by the stockbroker... "Other financial income": other financial income is listed under this sub-item, notably interest income that the firm receives on commercial receivables (e.g. customer accounts).
• financial expenses (item V. of the income statement): financial expenses include the following expenses:
  A. "Debt expenses": this sub-item includes financial expenses paid to credit institutions (item V.A.1.), interest on commercial debts (item V.A.2.) and other expenses (item V.A.3). Under this last item will appear financing costs by carry-over. B. "Other financial expenses": notably value reductions on cash placements are listed under this item.

19.
4. ANNEXED STATEMENTS
4.1. Annexed statement no 1 relating to positions in securities
Annexed statement no 1 includes the detail of the firm's long and short positions (items VI.A. of the asset or X. of the liability) by category of securities.
For each category of value, the total amount of values with a long position and the total amount with a short position will be indicated. These amounts will be subdivided into Belgian values [columns (1)] and foreign values [columns (2)]. In the "Total" columns, it is necessary to make, by category, the total of Belgian and foreign values long [column (3)] and the total of Belgian and foreign values short [column (4)]. In column (5), it is necessary to include by category, the net position (long positions minus short positions). It is therefore not requested a complete list of listed shares, unlisted shares, etc..., but totals by category. Regarding the classification of securities to be included in the categories mentioned in the annexed statement, listed values are to be considered as those admitted to the listing of an officially recognized stock exchange for securities. The following categories of securities are:

1. "Shares": shares, warrants and rights, convertible bonds,... are included under this category.
2. "Debt securities": under this label are included in particular public funds, that is to say bonds issued by the State (Rentes), provinces, cities and municipalities, autonomous funds, intercommunals, public credit institutions and other institutions of public utility.
   Also debt securities are bonds of the private sector, eurobonds, treasury bills,...

r
.
3.
20.
"Units in collective investment undertakings": this item includes any form of unit or certificate issued by collective investment undertakings in securities and derivatives, currencies, precious metals, short-term investment instruments, real estate, or a combination of these instruments, without regard to the legal qualification of the undertaking or the manner of formation of the price of these units or certificates. This includes in particular certificates representing units in common investment funds, variable or fixed capital investment companies, market index funds, real estate certificates,... The social shares of portfolio companies whose activity is based mainly on the holding of participations in one or more subsidiaries, conferring on them, in law or in fact, the power to direct the activity of these subsidiaries, and/or which are recognized as such by the supervisory authorities, are to be considered for this annex as shares.
4. "Divers": this item includes positions in other instruments than those enumerated above, notably options.
Purchased options are considered as long positions, issued options as short positions.
Positions in financial futures and new financial instruments are not included in Annexed statement no 1.
In row 5. "Total", the distinction by column is made between (A) the total amount of values denominated in BEF and (B) the total of those denominated in foreign currencies (converted into BEF). The values included in this annex are valued at the rate of the last day of the quarter (see comments under item "VI. Positions" of the asset).

21.
4.2. Annexed statement no 2 relating to forward transactions.
Annexed statement no 2 concerns the record of forward transactions in securities at the rate on the last day of the quarter concerned.
It is the total amount - on the last day of the quarter - of purchases and sales carried out by the stockbroker during the current fortnight, and reported according to the quality of the order givers. It should be noted that transactions at the rate for the account of staff members also include the positions that they have taken for the account of clients for whom they personally have a mandate to carry out operations (let us mention client accounts in the name of the spouse of this member or his family, etc...). Forward transactions in securities at the rate carried out on foreign exchanges, as well as transactions in securities carried out off-exchange, the settlement (payment and delivery) of which will take place only after a period agreed between parties, are listed under "Other forward transactions in securities at the rate". Operations in new financial instruments (financial futures, options, swaps, FRA, etc...) are not included in this table.

22.
4.3. Annexed statement no 3 relating to carry-over operations.
Annexed statement no 3 concerns, for each end of fortnight of the quarter (Q1 to Q6), the detail of carry-over operations long and short, on the one hand, by category of carry-over (carry-over on exchange, carry-over at bank, carry-over by own means), and on the other hand, by category of order givers (private and professional clients, associates, staff or for the account of the firm itself). Carry-over positions for the account of staff members also include the positions that they have taken for the account of clients for whom they personally have a mandate to carry out operations (for example, client accounts in the name of the spouse, members of their family, etc...). Item C. of Annexed statement concerns additional information relating to carry-over operations of the fortnight at the rate (Q6). It is necessary to mention:
a) for what concerns carry-overs carried out on exchange, the amount of guarantees deposited at the request of the Forward Cooperative; b) for what concerns carry-overs at bank:

• under item a), the amount financed by the bank in cases where this amount is lower than the amount of securities carried over. In this hypothesis, the firm must provide part of the necessary capital to lift the securities;
• under item b), the amount of guarantees in the case where the amount financed by the bank is equal to the amount of securities carried over and where it demands additional guarantees.

23.
4.4. Annexed statement no 4 relating to issued options.
Annexed statement no 4 concerns the detail of options negotiated (limited to issued options) by the firm, for the account of various categories of order givers.
The first part of Annexed statement concerns the amount of positions and hedges, according to various categories of order givers.
A distinction is made between call and put.
For the first category, issued call options, the amount of positions is calculated as follows: number of contracts x number of securities per contract x underlying value evaluated at the market rate. For the second category, issued put options, the amount of positions is calculated as follows: number of contracts x number of securities per contract x exercise price of the option. The second part of the table concerns the status of hedges given, by the stockbroker himself, to intermediaries involved in the execution and/or settlement of operations in options (e.g. POCM, POM, POCL for options negotiated on the Bourse).

24.
4.5. Annexed statement no 5 relating to commercial receivables due for more than one month and doubtful receivables.
Annexed statement no 5 comprises two parts.
The first part concerns receivables (5) from clients and counterparties who are debtors in cash for an amount equal to or greater than 5% of equity (the sum of items I. to VI. of the liability), with a minimum of one million BEF, and which are in whole or in part due for more than one month. The second part concerns doubtful receivables included under item V.A.5. of the asset, the amount of which is equal to or greater than 5% of equity (the sum of items I. to VI. of the liability), with a minimum of one million BEF. The receivables will be arranged in descending order; they will be identified by their internal number to the firm for what concerns private clients and by their company name for any other creditor (institutional clients, bankers, agents, correspondents,...). The firm will add the comments it deems useful for the appreciation of risk (real and personal securities, debits authorized by the firm (remunerated or not), repayment plans ...). (5) This refers to the set of cash accounts in the name of a client or a counterparty. I

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4.6. Annexed statement no 6 relating to litigation at the rate.
Annexed statement no 6 of litigation at the rate concerns an overview of the litigation with which the firm is confronted.
This includes in particular litigation with staff members, clients, suppliers, insurers or public administrations involving an amount exceeding 5% of the firm's equity (the sum of items I. to VI. of the liability), with a minimum of one million BEF. Litigation relating to opposition procedures will be considered as a single litigation: the amount to be communicated is the sum of the amounts of the individual litigations involved. Annexed statement no 6 comprises three parts:

• 1st part: evolution of litigations already reported to the Guarantee Fund. It is necessary to mention the name of the case, the date of the first report, the amount involved, the status of the procedure and the sums covered by an insurance policy.
  With regard to the amounts involved, it is necessary to mention the firm's litigious receivables with a positive sign and litigious debts with a negative sign.
  With regard to the status of the procedure, comments can be limited to the following codes:
  code (1): no recovery measures have yet been taken; code (2): the parties are negotiating; code (3): there is an official formal notice; code (4): judicial procedure in first instance; code (5): ' 11 ,I appeal; code (6): an agreement/judgment has been reached and is executed according to the agreed/adjudicated modalities; code (7): litigation settled during the period; code (8): other (to be specified).
• 2nd part: list of insurance policies taken out by the firm to cover risks of fire, theft, staff fault/fraud, professional liability,...
  Insurance policies relating to cars, medical expenses, group insurance,...etc. should not be mentioned.
  This list will be communicated once a year, unless there are changes during the year to report.

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• 3rd part: the description of new litigations includes the name of the case and the parties involved (the plaintiff and the defendant), the origin and nature of the litigation, the amount involved, the status of the procedure, the insurance policies likely to cover the loss as well as an estimate regarding the outcome and consequences of the litigation.
  The following quarter, the litigations included in this part will be mentioned under the first part.

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