18.                        Net Capital Requirements

Portfolio Brokerage Services, Inc. (“PBS”) is a broker-dealer subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital (“net capital ratio”), both as defined, shall not exceed 15 to 1. SEC Rule 15c3-1 also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2013, the Company had net capital of $1,000, which was $900 in excess of its required net capital of $100. At December 31, 2013, the Company’s net capital ratio was .10 to 1.

Additionally, PBS is subject to net capital requirements of certain self-regulatory organizations and at December 31, 2013, PBS was in compliance with such requirements.