• NOTICE OF DISCIPLINARY ACTION

      • #
      • 16-CH-1608
      • Notice Date
      • 27 January 2017
      • Effective Date
      • 27 January 2017
    • CHICAGO MERCANTILE EXCHANGE INC.

      NOTICE OF DISCIPLINARY ACTION

      FILE NO.: 16-CH-1608   

      MEMBER FIRM: Nanhua USA LLC     

      CME RULE: 983. DISASTER RECOVERY AND BUSINESS CONTINUITY

      All clearing members must have written disaster recovery and business continuity policies and procedures in place to ensure they are able to perform certain basic operational functions in the event of a significant internal or external interruption to their operations. At a minimum, the following areas must be considered in the firm’s policies and procedures, depending on the firm’s size and its business and product mix:

      A. Clearing members must have procedures in place to allow them to continue to operate during periods of stress or to transfer accounts to another fully operational clearing member with minimal disruption to either the Exchange or their customers. In order to satisfy this requirement, clearing members must perform:

      1.  Periodic testing of disaster recovery and business continuity plans.

      2.  Duplication of critical systems at back up sites.

      3.  Periodic back-up of critical information.

      B. Key Staff Contacts. Clearing members must maintain and, at the request of the Exchange, provide accurate and complete information for their key personnel. Clearing members must inform the Exchange in a timely manner whenever a change to their key personnel is made.

      C. Additional and/or Alternative Requirements. Exchange staff may prescribe additional and/or alternative requirements in order for clearing members to comply with this Rule.

      FINDINGS: Pursuant to an offer of settlement in which Nanhua USA LLC neither admitted nor denied the rule violation upon which the penalty is based, on January 26, 2017, the Clearing House Risk Committee found that Nanhua USA LLC violated CME Rule 983.

      PENALTY: In accordance with the settlement offer, the Committee imposed a $50,000 fine. In accepting this settlement offer, the Committee agreed to waive the fine if no similar violation of such rule occurs during the course of the next examination.

      EFFECTIVE DATE:   January 27, 2017