The international derivatives market CME Group published a notice of disciplinary measures against BNP Paribas Securities Corp.
According to a settlement offer in which BNP Paribas Securities Corp (BNPPSC) neither admitted nor denied the rule violations or the factual findings underlying the penalty, a panel of the Chicago Board of Trade (CBOT) Business Conduct Committee found that BNPPSC made excessive disbursements on performance bonds.
The panel concluded that BNPPSC thus violated CBOT Rule 930.F.
In addition, BNPPSC accepted letters of credit as performance security from customers that were not unconditional or payable on demand. As a result, the performance bond status of the affected customer accounts was not correctly calculated and reflected in the company’s records and reports.
The panel concluded that BNPPSC violated CBOT Rules 930.C., 970.A.4., 971.A. and 980.B.3.
Finally, BNPPSC contractually agreed to a period of time during which the company’s full discretion to determine when and under what conditions the positions could be liquidated was limited.
The panel concluded that BNPPSC thus violated CBOT Rule 930.K.
The committee also found that BNPPSC has since received fresh credit under the Exchange rules to replace the reported credit. In addition, BNPPSC has since amended the relevant customer agreement language and the referenced customer agreements now comply with the Exchange rules.
Under the settlement offer, the commission ordered BNPPSC to pay a $200,000 fine.