• NOTICE OF DISCIPLINARY ACTION

      • #
      • 19-CH-1904
      • Notice Date
      • 23 August 2019
      • Effective Date
      • 23 August 2019
    • Board of Trade of the City of Chicago, Inc.
      NOTICE OF DISCIPLINARY ACTION

      FILE NO.: 19-CH-1904

      MEMBER FIRM: Credit Suisse Securities (USA) LLC

      CBOT Rules: 930.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 part.

      930.F. RELEASE OF EXCESS PERFORMANCE BOND

      Subject to exceptions granted by Clearing House 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. This includes, but is not limited to, the following:

      980. REQUIRED RECORDS AND REPORTS

      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 records for all accounts;
      2. Resolution of reconciling items in a timely manner; and
      3. Prevention of a material inadequacy as defined in CFTC Regulation 1.16(d)(2).

      FINDINGS: Pursuant to an offer of settlement in which Credit Suisse Securities (USA) LLC neither admitted nor denied the rule violations upon which the penalty is based, on August 22, 2019, the Clearing House Risk Committee found that Credit Suisse Securities (USA) LLC violated CBOT Rules 930.E., 930.F., 971.A. and 980.B.

      PENALTY: In accordance with the settlement offer, the Committee imposed a $150,000 fine

      EFFECTIVE DATE: August 23, 2019