J.P. MORGAN SECURITIES LTD.
CME RULE VIOLATION:
561.A. REPORTS OF LARGE POSITIONS (in part)
Clearing members, omnibus accounts and foreign brokers shall submit to the Exchange a daily report of all positions required to be reported as set forth in the Position Limit, Position Accountability and Reportable Level Table….
Notwithstanding the above, clearing members carrying such accounts remain responsible for obtaining and providing to the Exchange information regarding ownership and control of positions in circumstances where an omnibus account or foreign broker has failed to provide the information to the Exchange…
Clearing members, omnibus accounts and foreign brokers must provide the Market Regulation Department with the required CFTC Form 102 (“Identification of Special Accounts”) identifying the owner, any controlling parties and any additional required information for each reportable account. The form must be submitted to the Market Regulation Department no later than the business day following the date on which the account becomes reportable. Additionally, any material changes to the information previously provided to the Market Regulation Department will require the submission of a revised form within three business days of such changes becoming effective.
Pursuant to an offer of settlement in which J.P. Morgan Securities Ltd. (“JPMS”), a corporate affiliate of clearing member firm J.P. Morgan Futures, neither admitted nor denied the findings and conclusions herein, on June 15, 2011, a Panel of the CME Business Conduct Committee (“Panel”) found that on January 8, 2009, JPMS provided a completed CFTC Form 102 with the Exchange incorrectly identifying a client account as a proprietary account of the client, instead of a customer omnibus account of the client.
Due to its failure to provide a correct and accurate CFTC Form 102, the Panel found that JPMS violated CME Rule 561.A.
In accordance with the settlement offer, JPMS has agreed to pay $10,000.
June 17, 2011
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