• NOTICE OF DISCIPLINARY ACTION

      • #
      • 16-CH-1602
      • Effective Date
      • 26 August 2016
    • CHICAGO MERCANTILE EXCHANGE INC.

       

      NOTICE OF DISCIPLINARY ACTION

       

      FILE NO.: 16-CH-1602

      MEMBER FIRM: SG Americas Securities LLC

      CME 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.

              4. Completely and accurately computing and recording the balances in the net capital computation including capital requirements.

      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.

      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 reconciliations for all accounts.

              2. Resolution of reconciling items in a timely manner.       

      982. RISK MANAGEMENT

      All clearing members must have written risk management policies and procedures in place to ensure they are able to perform certain basic risk and operational functions at all times.

      * * *

      In addition, all FCM clearing members must comply with the risk management requirements set forth in CFTC Regulation 1.11: Risk Management Program for futures commission merchants.                                                          

      FINDINGS: Pursuant to an offer of settlement in which SG Americas Securities LLC neither admitted nor denied the rule violations upon which the penalty is based, on August 25, 2016, the Clearing House Risk Committee found that SG Americas Securities LLC violated CME Rules 970.A.4., 971.A.2.a., b., and c., 980.A., 980.B.1 and 2. and 982.

      PENALTY: In accordance with the settlement offer, the Committee imposed a $50,000 fine.

      EFFECTIVE DATE: August 26, 2016