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.
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.
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.
August 26, 2011