• NOTICE OF DISCIPLINARY ACTION

      • #
      • 13-CH-1302
      • Effective Date
      • 18 February 2014
    • CHICAGO BOARD OF TRADE

      NOTICE OF DISCIPLINARY ACTION

      FILE NO.: 13-CH-1302

      MEMBER FIRM: Deutsche Bank Securities Inc.

      CBOT RULES:     

      970. FINANCIAL REQUIREMENTS

      A. Subject to exemptions granted by Exchange staff, all clearing members, including non-FCMs, must comply with the requirements set forth in CFTC Regulations 1.10, 1.12, 1.17 and 1.18.

      971. SEGREGATION, SECURED AND CLEARED SWAPS CUSTOMER ACCOUNT REQUIREMENTS

      A. All clearing members must comply with the requirements set forth in CFTC Regulations 1.20 through 1.30, 1.32, 1.49 and 30.7, and Part 22 of the CFTC Regulations. This includes, but is not limited to, the following:

      2. Computing, recording and reporting completely and accurately the balances in the:

      a. Statement of Segregation Requirements and Funds in Segregation;

      b. Statement of Secured Amounts and Funds Held in Separate Accounts; and

      c. Statement of Segregation Requirements and Cleared Swaps Customer Collateral Held in Cleared Swaps Customer Accounts; and

      3. Obtaining satisfactory segregation, secured 30.7 and Cleared Swaps Customer account acknowledgment letters and identifying segregated, secured 30.7 and Cleared Swaps Customer accounts.

      980. REQUIRED RECORDS AND REPORTS

      A. Each clearing member shall prepare, maintain and keep current those books and records required by the rules of the Exchange, the Commodity Exchange Act and the Regulations thereunder. Such books and records shall be open to inspection and promptly provided to the Exchange upon request.

      B. Each clearing member shall maintain an adequate accounting system, internal accounting controls, and procedures for safeguarding customer and firm assets. This includes, but is not limited to, the following:

      1. Preparation and maintenance of complete and accurate records for all accounts;

      2. Resolution of reconciling items in a timely manner; and

      3. Prevention of a material inadequacy as defined in CFTC Regulation1.16(d)(2). 

      FINDINGS: Pursuant to an offer of settlement in which Deutsche Bank Securities Inc. neither admitted nor denied the rule violations upon which the penalty is based, on February 14, 2014, the Clearing House Risk Committee found that Deutsche Bank Securities Inc. violated CBOT Rules 970.A., 971.A.2., 971.A.3., 980.A., and 980.B.

      PENALTY: In accordance with the settlement offer, the Committee fined Deutsche Bank Securities Inc. $900,000.

      EFFECTIVE DATE: February 18, 2014