NOTICE OF DISCIPLINARY ACTION

FILE NO.:                   19-CH-1901   

MEMBER FIRM:        INTL FCStone Financial Inc.

CME RULES:             Rule 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. This includes, but is not limited to, the following:

1.    Maintaining sufficient funds at all times in segregation, secured 30.7 and Cleared Swaps Customer accounts;

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      B.  All FCM clearing members must submit a daily segregated, secured 30.7 and Cleared Swaps Customer amount statement, as applicable, through Exchange-approved electronic transmissions by 12:00 noon on the following business day

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         E. All disbursements not made for the benefit of a customer from a segregated, secured 30.7 or Cleared Swaps Customer account which exceed 25% of the FCM clearing members excess segregated, secured 30.7 or Cleared Swaps Customer of the respective origin must be pre-approved in writing by the clearing member’s Chief Executive Officer, Chief Financial Officer or their authorized representative with knowledge of the firm’s financial requirements and position.

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               2.    Upon approval of a single disbursement or the disbursement which in the aggregated exceeds the 25% level as defined in Rule 971.E.1., the FCM clearing member must provide immediate notification to the Financial and Regulatory Surveillance Department through Exchange approved electronic transmissions. Such notification shall include:

a. Confirmation that the FCM clearing member’s Chief Executive    Officer, Chief Financial Officer or authorized representative with knowledge of the firm’s financial requirements and position pre-approved in writing the disbursement(s);

     b. The amount(s) and recipient(s) of such disbursement(s); and

     c. A description of the reasons for the single or multiple  transaction(s) that resulted in the disbursement(s).

Rule 980.        REQUIRED RECORDS AND REPORTS

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B. Each clearing member shall maintain an adequate accounting system, internal accounting controls, and procedures for safeguarding customer and firm assets. This includes, but is not limited to, the following:

    1. Preparation and maintenance of complete and accurate reconciliations for all accounts;  

    2. Resolution of reconciling items in a timely manner; and                              

FINDINGS:                 Pursuant to an offer of settlement in which INTL FCStone Financial Inc. neither admitted nor denied the rule violations upon which the penalty is based, on April 11, 2019, the Clearing House Risk Committee found that INTL FCStone Financial Inc. violated CME Rules 971.A., 971.A.1., 971.B., 971.E.2., 980.B.1. and 980.B.2.

PENALTY:                 In accordance with the settlement offer, the Committee imposed a $100,000 fine.

EFFECTIVE DATE:   April 12, 2019