EXCHANGE RULE: 538.H. Documentation
Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivatives, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.
Pursuant to an offer of settlement UBS AG (“UBS”) presented at hearing on February 18, 2015, in which UBS neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that it had jurisdiction over UBS because it was a COMEX member pursuant to Exchange Rules 400 and 402, and that on trade date May 8, 2013, UBS entered into an EFRP transaction that did not contain documentation of the corresponding cash position, and therefore was not a bona fide EFRP.
The Panel found that as a result, UBS violated Legacy Rule 538.H.
In accordance with the settlement offer, the Panel ordered UBS to pay a fine to the Exchange in the amount of $15,000.
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