Notice of Disciplinary Action

FILE NO.:                     23-CH-2315

MEMBER FIRM:           HSBC Securities (USA) Inc.    

CME Rule:                   930. PERFORMANCE BOND REQUIREMENTS: ACCOUNT HOLDER LEVEL

K. Liquidation of Accounts

1.     Non-Security Futures and OTC Derivatives

If an account holder fails to comply with a performance bond call within a reasonable time (the clearing member may deem one hour to be a reasonable time), the clearing member may close out the account holder's trades or sufficient contracts thereof to restore the account holder's account to required performance bond status. Clearing members shall maintain full discretion to determine when and under what circumstances positions in any account shall be liquidated.

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FINDINGS:                   Pursuant to an offer of settlement in which HSBC Securities (USA) Inc. (“HSBC”) neither admitted nor denied the finding or the rule violation upon which the penalty is based, on June 6, 2024, the Clearing House Risk Committee (“CHRC”) found that HSBC contractually agreed to a period of time during which the firm’s full discretion to determine when and under what circumstances positions could be liquidated was restricted. The CHRC thereby concluded that HSBC violated CME Rule 930.K.1.  The CHRC also found that HSBC has since corrected the finding and the cited customer agreement is now in compliance with Exchange rules.

PENALTY:                    In accordance with the settlement offer, the CHRC imposed a $25,000 fine.

EFFECTIVE DATE:       June 7, 2024