### Question
How does the law define adjusted net capital?


### Answer
Under *17 CFR § 1.12*, **adjusted net capital** is defined as:

> net capital less:

(i) The amount by which any advances paid by the applicant or registrant on cash commodity contracts and used in computing net capital exceeds 95 percent of the market value of the commodities covered by such contracts;

#### Citation:
  - *17 CFR § 1.12*
