CHICAGO BOARD OF TRADE
NOTICE OF DISCIPLINARY ACTION
FILE NO.: 13-CH-1303
MEMBER FIRM: Nomura Securities International, Inc.
CBOT RULES: 971. SEGREGATION, SECURED AND CLEARED SWAPS CUSTOMER ACCOUNT REQUIREMENTS
E. All disbursements not made for the benefit of a customer from a segregated, secured 30.7 or Cleared Swaps Customer account which exceed 25% of the FCM clearing members excess segregated, secured 30.7 or Cleared Swaps Customer of the respective origin must be pre-approved in writing by the clearing member’s Chief Executive Officer, Chief Financial Officer or their authorized representative with knowledge of the firm’s financial requirements and position.
1. In determining if a disbursement exceeds the 25% level, such disbursement must be:
a. Compared to the most recent calculation of excess segregated, secured 30.7 and sequestered amounts; and
b. A single disbursement must be reviewed individually and in the aggregated with all other disbursements not made for the benefit of a customer of the respective segregated, secured 30.7 or Cleared Swaps Customer origin since the last calculation of excess funds.
2. Upon approval of a single disbursement or the disbursement which in the aggregated exceeds the 25% level as defined in Rule 971.E.1., the FCM clearing member must provide immediate notification to the Audit Department through Exchange-approved electronic transmissions. Such notification shall include:
a. Confirmation that the FCM clearing member’s Chief Executive Officer, Chief Financial Officer or their authorized representative with knowledge of the firm’s financial requirements and position pre-approved in writing the disbursement(s);
b. The amount(s) and recipient(s) of such disbursement(s); and
c. A description of the reasons for the single or multiple transaction(s) that resulted in the disbursement(s).
3. The FCM clearing member’s Chief Executive Officer and Chief Financial Officer will remain responsible for the pre-approvals by their authorized representative and for compliance with this rule.
FINDINGS: Pursuant to an offer of settlement in which Nomura Securities International, 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 Nomura Securities International, Inc. violated CBOT Rule 971.E.
PENALTY: In accordance with the settlement offer, the Committee fined Nomura Securities International, Inc. $25,000.
EFFECTIVE DATE: February 18, 2014
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