NOTICE OF DISCIPLINARY ACTION

FILE NO.:                   20-CH-2011

MEMBER FIRM:         Credit Suisse Securities (USA) LLC          

CBOT Rules:              930.D. ACCEPTANCE OF ORDERS

Clearing members may accept orders for an account provided sufficient performance bond is on deposit in the account or is forthcoming within a reasonable time. For an account which has been subject to calls for performance bond for an unreasonable time, clearing members may only accept orders that reduce the performance bond requirements of existing positions in the account. Clearing members may not accept orders for an account that has been in debit an unreasonable time.

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.

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.

982. RISK MANAGEMENT

All clearing members must have written risk management policies and procedures in place to ensure they are able to perform certain basic risk and operational functions at all times. At a minimum, the following areas must be considered in the firm’s policies and procedures, depending on the firm’s size and its business and product mix:

. . . . .

In addition, all FCM clearing members must comply with the risk management requirements set forth in CFTC Regulation 1.11: Risk Management Program for futures commission merchants.                                                     

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 October 15, 2020, the Clearing House Risk Committee found that Credit Suisse Securities (USA) LLC violated CBOT Rules 930.D., 930.E.1., 930.E.2., 930.F. and 982.

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

EFFECTIVE DATE:    October 16, 2020