Nomura Securities International, Inc got a fine of $50,000 as a part of a settlement with CME Group.
According to a notice of disciplinary action, Nomura violated CBOT Rule 980.B.3. Let’s note that the firm neither admitted nor denied the rule violation.
CBOT Rule 980 says:
“REQUIRED RECORDS AND REPORTS
B. Each clearing member shall maintain an adequate accounting system, internal accounting controls, and procedures for safeguarding customer and firm assets. This includes, but is not limited to, the following:
3. Prevention of a material inadequacy as defined in CFTC Regulation 1.16(d)(2)”.
According to the CFTC regulations:
(2) A material inadequacy in the accounting system, the internal accounting controls, the procedures for safeguarding customer and firm assets, and the practices and procedures referred to in paragraph (d)(1) of this section which is to be reported in accordance with paragraph (e)(2) of this section includes any conditions which contributed substantially to or, if appropriate corrective action is not taken, could reasonably be expected to:
(i) Inhibit an applicant or registrant from promptly completing transactions or promptly discharging his responsibilities to customers or other creditors;
(ii) Result in material financial loss;
(iii) Result in material misstatement of the applicant’s or registrant’s financial statements and schedules; or
(iv) Result in violations of the Commission’s segregation or secured amount (in the case of a futures commission merchant), recordkeeping or financial reporting requirements to the extent that could reasonably be expected to result in the conditions de- scribed in paragraph (d)(2) (i), (ii), or (iii) of this section.
The disciplinary notice got into effect on August 20, 2021.
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