Regulatory Requirements |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Regulatory Requirements [Abstract] | |
| Regulatory Requirements |
Note 16. Regulatory Requirements
As a wholly-owned subsidiary of Bank of America, a bank holding
company that is also a financial holding company, Merrill Lynch
is subject to the oversight of, and inspection by, the Board of
Governors of the Federal Reserve System.
Certain U.S. and
non-U.S. subsidiaries
are subject to various securities and banking regulations and
capital adequacy requirements promulgated by the regulatory and
exchange authorities of the countries in which they operate.
These regulatory restrictions may impose regulatory capital
requirements and
limit the amounts that these subsidiaries can pay in dividends
or advance to ML & Co. The principal regulated
subsidiaries of ML & Co. are discussed below.
Securities
Regulation
As a registered broker-dealer and futures commission merchant,
MLPF&S is subject to the uniform net capital requirements
of SEC
Rule 15c3-1,
and the Commodity Futures Trading Commission’s
(“CFTC”) Regulation 1.17. MLPF&S has elected
to compute the minimum capital requirement in accordance with
the “Alternative Net Capital Requirement” as permitted
by SEC
Rule 15c3-1.
At September 30, 2011, MLPF&S’s regulatory net
capital as defined by
Rule 15c3-1
was $10.8 billion and exceeded the minimum requirement of
$864 million by $9.9 billion.
In accordance with the Alternative Net Capital Requirement,
MLPF&S is required to maintain tentative net capital in
excess of $1 billion, net capital in excess of
$500 million, and notify the SEC in the event its tentative
net capital is less than $5 billion. As of
September 30, 2011, MLPF&S had tentative net capital
and net capital in excess of the minimum and notification
requirements.
Merrill Lynch International (“MLI”), a U.K. regulated
investment firm, is subject to capital requirements of the
U.K.’s FSA. Financial resources, as defined, must exceed
the total financial resources requirement set by the FSA. At
September 30, 2011, MLI’s financial resources were
$19.8 billion, exceeding the minimum requirement by
$3.2 billion.
Merrill Lynch Japan Securities Co., Ltd. (“MLJS”), a
Japan-based regulated broker-dealer, is subject to capital
requirements of the Japanese Financial Services Agency
(“JFSA”). Net capital, as defined, must exceed 120% of
the total risk equivalents requirement of the JFSA. At
September 30, 2011, MLJS’s net capital was
$1.7 billion, exceeding the minimum requirement by
$0.9 billion.
Banking
Regulation
Merrill Lynch International Bank Limited (“MLIB”), an
Ireland-based regulated bank, is subject to the capital
requirements of the Central Bank of Ireland. MLIB is required to
meet minimum regulatory capital requirements under the European
Union (“EU”) banking law as implemented in Ireland by
the Central Bank of Ireland. At September 30, 2011,
MLIB’s financial resources were $14.1 billion,
exceeding the minimum requirement by $4.2 billion.
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