• NOTICE OF DISCIPLINARY ACTION

      • #
      • 19-CH-1903
      • Notice Date
      • 28 June 2019
      • Effective Date
      • 28 June 2019
    • FILE NO.:                   19-CH-1903   

      MEMBER FIRM:         UBS Securities LLC   

      CBOT RULES:           930. PERFORMANCE BOND REQUIREMENTS: ACCOUNT HOLDER LEVEL

      E.  Calls for Performance Bond

      1.      Clearing members must issue calls for performance bond that would bring an account up to the initial performance bond requirement: a) when performance bond equity in an account initially falls below the maintenance performance bond requirement; and b) subsequently, when performance bond equity plus existing performance bond calls in an account is less than the maintenance performance bond requirement.

      Such calls must be made within one business day after the occurrence of the event giving rise to the call. Clearing members may call for additional performance bond at their discretion. Notwithstanding the foregoing, a clearing member is not required to call for or collect performance bond for day trades.

      2.      Clearing members shall only reduce a call for performance bond through the receipt of performance bond deposits permitted under subsection C. of this rule. Clearing members may cancel a call for performance bond through: a) the receipt of performance bond deposits permitted under subsection C. of this rule only if such deposits equal or exceed the amount of the total performance bond call; or b) inter-day favorable market movements and/or the liquidation of positions only if performance bond equity in the account is equal to or greater than the initial performance bond requirement. Clearing members shall reduce an account holder's oldest outstanding performance bond call first.

      3.      Clearing members must maintain written records of all performance bond calls issued and satisfied in whole or in part.

      F.  Release of Excess Performance Bond

      Subject to exceptions granted by Exchange staff, clearing members may only release performance bond deposits from an account if such deposits are in excess of initial performance bond requirements.

      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.

       

      980. REQUIRED RECORDS AND REPORTS

      A.     Each clearing member shall prepare, maintain and keep current those books and records required by the rules of the Exchange, the Commodity Exchange Act and the Regulations thereunder. Such books and records shall be open to inspection and promptly provided to the Exchange upon request.       

      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:

                                                                       *****

         

      FINDINGS:                  Pursuant to an offer of settlement in which UBS Securities LLC neither admitted nor denied the rule violations upon which the penalty is based, on June 27, 2019, the Clearing House Risk Committee found that UBS Securities LLC violated CBOT Rules 930.E., 930.F., 971.A., 980.A. and 980.B.

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

      EFFECTIVE DATE:    June 28, 2019