NOTICE OF DISCIPLINARY ACTION

CHICAGO MERCANTILE EXCHANGE INC.

NOTICE OF DISCIPLINARY ACTION

FILE NO.: 16-CH-1605               

MEMBER FIRM: R.J. O’Brien & Associates, LLC     

CME RULE: 971. SEGREGATION, SECURED AND CLEARED SWAPS CUSTOMER ACCOUNT REQUIREMENTS

1. 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. This includes, but is not limited to, the following:

2.  Computing, recording and reporting completely and accurately the balances in the:

b. Statement of Secured Amounts and Funds Held in Separate Accounts; and

4.  Preparing complete and materially accurate daily segregation, secured 30.7 and Cleared Swaps Customer amount computations in a timely manner.

D.    All FCM clearing members must submit a report of investments in a manner as prescribed through Exchange-approved electronic transmissions as of the 15th of the month (or the following business day if the 15th is a holiday or weekend) and last business day of the month by the close of business on the following business day. The report of investments shall be prepared and shall identify separately for segregated and secured 30.7 funds and Cleared Swaps Customer Collateral held:

2.  The identity of each depository holding funds and the dollar amount held at each depository.                                                           

FINDINGS: Pursuant to an offer of settlement in which R.J. O’Brien & Associates, LLC neither admitted nor denied the rule violations upon which the penalty is based, on January 26, 2017, the Clearing House Risk Committee found that R.J. O’Brien & Associates, LLC violated CME Rules 971.A.2.b., 971.A.4., and 971.D.2.

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

EFFECTIVE DATE:   January 27, 2017