NOTICE OF DISCIPLINARY ACTION

FILE NO.:

COMEX 11-08131-BC 

MEMBER BY AFFILIATION:

HSBC Bank USA National Association 

COMEX RULE VIOLATION:

Rule 562. Position Limit Violations

Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. 

FINDINGS:

Pursuant to an offer of settlement in which HSBC Bank USA National Association (“HSBC”), a corporate affiliate of Exchange clearing member firm HSBC Securities USA Inc. , neither admitted nor denied the findings or any rule violation upon which the penalty is based , on August 24, 2011, a Panel of the COMEX Business Conduct Committee (the “Panel”) found that on January 31, 2011, a date subject to a spot month speculative position limit for the February 2011 Gold futures contract, HSBC inadvertently maintained a long Gold futures position that exceeded the approved expiration month hedge exemption of 5,000 contracts granted by the Exchange on August 11, 2010, by 153 contracts (3%). HSBC immediately liquidated its overage position resulting in profits of $7,250.

The Panel found that in so doing, HSBC violated COMEX Rule 562. 

PENALTY:

In accordance with the settlement offer and its findings, the Panel ordered HSBC to: 1) pay a fine to the Exchange in the amount of $10,000; and 2) disgorge profits in the amount of $7,250. 

EFFECTIVE DATE:

August 26, 2011