ICE Futures U.S. settled a disciplinary action against UBS Securities LLC last week, claiming the firm may have misreported open interest in the December 2014 cocoa futures contracts on trade dates November 12 and 13, 2014. Under IFUS rules, clearing members are obligated to report open positions and adjust previously reported positions (as necessary) in accordance with specific timeframes. To settle this matter, UBS agreed to pay a fine of US $20,000. Separately, Twin Eagle Resource Management, LLC consented to payment of a fine of US $7,500 for allegedly violating a spot month position limit in the July 2014 Henry LD1 futures contract intra-day on June 24, 2014. As part of its settlement, Twin Eagle also agreed to disgorge profits of US $154,180 related to the disputed positions.
Compliance Weeds: Under ICE Clear rules, clearing members must report by 7:30 p.m. ET each business day (or such other time as the exchange may direct) their open interest in all futures contracts. They are obligated to report any adjustments by 9 a.m. the next business day. (Click here to access ICUS rule 403.) ICE Futures U.S.’s rules also expressly provide that position limits must be complied with both on an end of day and intra-day basis. (Click here to access IFUS rule 6.13.) CME Group has similar rules regarding reporting open positions and compliance with position limits. (Click here to access CME Group rules 561 and 562, respectively.)