NOTICE OF SUMMARY ACTION

FILE NO.:                  

DQA-18-9774                      

MEMBER FIRM:                                        

J.P. MORGAN SECURITIES LLC

RULE VIOLATION:

Rule 536.B.2 Electronic Audit Trail Requirements for Electronic Order Routing/Front-End Systems

Entities certified by the Exchange to connect an order routing/front-end system to the Globex platform through the CME iLink® gateway are responsible for creating an audit trail of each message entered into Globex. Clearing members guaranteeing a connection to Globex are responsible for maintaining or causing to be maintained the electronic audit trail for such systems. This electronic audit trail must be maintained for a minimum of 5 years, and clearing members must have the ability to produce this data in a standard format upon request of Market Regulation.

Each such electronic audit trail must be complete and accurate and account for every electronic communication such system receives or generates, including any electronic communication such system receives from Globex.

FINDINGS:

J.P. Morgan Securities LLC failed to maintain a complete and accurate electronic audit trail for dates ranging from 2013 to July 7, 2017.

PENALTY:

On December 5, 2018, J.P. Morgan Securities LLC was collectively issued a $15,000 fine by the 512 committee for its violation of Rule 536.B.2, as follows:  CME - $5,000; CBOT - $5,000; NYMEX - $2,500; COMEX - $2,500.  The allocation of the fine across exchanges is based on the activity at each Designated Contract Market.

EFFECTIVE DATE:  

December 24, 2018