NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 11-8572-BC

MEMBER FIRM:

HSBC Securities (USA) Inc.

CBOT RULE VIOLATIONS:

Rule 526 Block Trades (in part)

F. The seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution; except that block trades in interest rate futures and options executed outside of Regular Trading Hours (7:00 a.m. – 4:00 p.m. Central Time, Monday – Friday on regular business days) must be reported within fifteen minutes of the time of execution.

FINDINGS:

Pursuant to an offer of settlement in which HSBC Securities (USA) Inc. (“HSBC”), neither admitted nor denied the Rule violations upon which the penalty is based, on March 25, 2014, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that on June 3, 2011, HSBC executed a block trade in the September 2011 Five-Year US Treasury Note futures contracts, and failed to report the trade to the Exchange within five minutes. The Panel concluded that HSBC thereby violated CBOT Rule 526.F.

PENALTY:                           

In accordance with the settlement offer, the Panel fined HSBC $25,000.

EFFECTIVE DATE:                                   

March 27, 2014