• 17-CH-1701

      • #
      • 17-CH-1701
      • Notice Date
      • 31 March 2017
      • Effective Date
      • 31 March 2017
    •  

      CHICAGO MERCANTILE EXCHANGE INC.

      NOTICE OF DISCIPLINARY ACTION

       

      FILE NO.:                     17-CH-1701                              

       

       

      MEMBER FIRM:           HSBC Securities (USA) Inc.                

       

      CME RULES:                930. PERFORMANCE BOND REQUIREMENTS: ACCOUNT HOLDER LEVEL

       

      E. Calls for Performance Bond

      1.  Clearing members must issue calls for performance bond that would bring an account up to the initial performance bond requirement: a) when performance bond equity in an account initially falls below the maintenance performance bond requirement; and b) subsequently, when performance bond equity plus existing performance bond calls in an account is less than the maintenance performance bond requirement. Such calls must be made within one business day after the occurrence of the event giving rise to the call. Clearing members may call for additional performance bond at their discretion. Notwithstanding the foregoing, a clearing member is not required to call for or collect performance bond for day trades.

       

      F. Release of Excess Performance Bond

       

      Subject to exceptions granted by Exchange staff, clearing members may only release performance bond deposits from an account if such deposits are in excess of initial performance bond requirements.

       

      970. FINANCIAL REQUIREMENTS

       

      A.    Subject to exemptions granted by Exchange staff, all clearing members, including nonFCMs, must comply with the requirements set forth in CFTC Regulations 1.10, 1.12, 1.17 and 1.18. This includes, but is not limited to, the following:

      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.

       

       

      FINDINGS:                    Pursuant to an offer of settlement in which HSBC Securities (USA) Inc. neither admitted nor denied the rule violations upon which the penalty is based, on March 30, 2017, the Clearing House Risk Committee found that HSBC Securities (USA) Inc. violated CME Rules 930.E.1., 930.F., 970.A.4. and 971.A. 

       

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

       

      EFFECTIVE DATE:       March 31, 2017