UBS Securities LLC
CBOT RULE VIOLATIONS:
538.A. Nature of an EFRP
An EFRP consists of two discrete but related simultaneous transactions. One party to the EFRP must be the buyer of (or holder of the long market exposure associated with) the related position and the seller of the corresponding Exchange contract. The other party to the EFRP must be the seller of (or the holder of the short market exposure associated with) the related position and the buyers of the corresponding Exchange contract.
Pursuant to an offer of settlement in which UBS Securities LLC (“UBS”) neither admitted nor denied the rule violations upon which the penalty is based, on June 2, 2015, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that it has jurisdiction over UBS pursuant to Rules 400 and 402 as the conduct occurred while UBS was a clearing member of the Exchange, and that on August 3, 2012, UBS, through an employee, entered into three EFRP transactions that did not contain documentation of the corresponding cash positions and, thus, were not bona fide EFRP transactions.
The Panel found that as a result, UBS violated Rule 538.A.
In accordance with the settlement offer, the Panel ordered UBS to pay a fine of $35,000.
June 4, 2015
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