FC Stone LLC
CME RULE VIOLATIONS:
Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivative, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.
Pursuant to an offer of settlement in which FC Stone LLC (“FC Stone”) neither admitted nor denied the rule violations upon which the penalty is based, on July 16, 2015, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel or BCC”) found that it has jurisdiction over FC Stone pursuant to Rules 400 and 402 as the conduct occurred while FC Stone was a clearing member of the Exchange, and that between July, 2013, and February, 2014, FC Stone entered into nine transitory EFRP transactions in CME foreign exchange (“FX”) products that did not contain documentation of the corresponding cash positions and, thus, were not bona fide EFRP transactions.
The Panel concluded that FC Stone thereby violated CME Rule 538.H.
In accordance with the settlement offer, the Panel ordered FC Stone to pay a fine of $50,000.
July 20, 2015