NOTICE OF DISCIPLINARY ACTION

FILE NO.:                     23-CH-2325

MEMBER FIRM:           Nanhua USA LLC       

CME Rule:                   971. SEGREGATION, SECURED AND CLEARED SWAPS CUSTOMER ACCOUNTS REQUIREMENTS (in part)

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.

FINDINGS:                   Pursuant to an offer of settlement in which Nanhua USA LLC (“Nanhua”) neither admitted nor denied the rule violation upon which the penalty is based, on January 18, 2024, the Clearing House Risk Committee (“CHRC”) found that Nanhua held customer invested funds in excess of CFTC Regulation 1.25 concentration limits on multiple occasions in August 2023.  The CHRC thereby concluded that Nanhua violated CME Rule 971.A.

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

EFFECTIVE DATE:      January 19, 2024