1. (1) Income to a registered securities broker or dealer from repurchase agreements or securities lending agreements, as described in section 3-3.2(g) of this Title, is included in determining gross income from principal transactions for the purchase or sale of stocks, bonds, and other securities and is allocated to New York State pursuant to the provisions of section 210.3(a)(9)(A)(iii) of the Tax Law.

2. (2) Under section 210.3(a)(9)(A)(iii) of the Tax Law, gross income from principal transactions is determined after the deduction of any cost of the taxpayer to acquire securities or commodities. Interest expense from repurchase agreements in which the taxpayer is the seller/borrower and from securities lending agreements in which the taxpayer is the securities lender is a cost to acquire the securities in those repurchase agreements where the taxpayer is the purchaser/lender and securities lending agreements where the taxpayer is the securities borrower. The amount of such interest expense is the interest expense associated with the sum of the value of the taxpayer's repurchase agreements where it is the seller/borrower plus the value of the taxpayer's securities lending agreements where it is the securities lender, provided such sum is limited to the sum of the value of the taxpayer's repurchase agreements where it is the purchaser/lender plus the value of the taxpayer's securities lending agreements where it is the securities borrower. Such interest expense must not exceed the sum of the interest income from the taxpayer's repurchase agreements where it is the purchaser/lender plus the interest income from the taxpayer's securities lending agreements where it is the securities borrower. For purposes of item (II) of section 210.3(a)(9)(A)(iii) of the Tax Law, gross income from repurchase agreements and securities lending agreements is considered to be from the same type of security and the taxpayer shall not separately calculate such gross income from such agreements.

   (c) Corporate partners.

   In the case of a taxpayer that is a partner in a partnership using the aggregate method pursuant to section 3-13.3 of this Title or is a foreign corporate limited partner that has made an election with respect to such partnership to the provisions of section 3-13.5 of this Title, where such partnership is a registered securities or commodities broker or dealer, the allocation rules of section 210.3(a)(9) of the Tax Law shall apply with respect to the taxpayer's distributive share (see section 3-13.3[a][1] of this Title) of such receipts from such partnership for purposes of computing the taxpayer's receipts factor pursuant to section 4-6.5 of this Part.

(a) General.

Section 210.3(a)(9) of the Tax Law provides rules for allocating receipts of registered securities or commodities brokers or dealers. Subdivision (b) of this section explains the application of the special rules to receipts of registered securities brokers or dealers from repurchase agreements and securities lending agreements.

(b) Repurchase agreements and securities lending agreements.