FCStone Ordered to Pay Civil Monetary Penalty by CFTC
- FCStone found itself on the hook for a $140,000 civil monetary penalty for failing to provide an adequate program of supervision.
The U.S. Commodity Futures Trading Commission (CFTC) has entered an Order filing as well as settling charges against FCStone, LLC, according to a CFTC statement.
FCStone, LLC is a CFTC-registered Futures Commission Merchant (FCM) whose base of operations is in New York. The order called for FCStone to pay a civil monetary penalty of 140,000 for failing to provide and maintain an adequate program of supervision as well as failing to diligently supervise its employees on one occasion in violation of CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 166.3.
In particular, the CFTC order finds that, between a period from 2008 until May 2013, FCStone did not administer adequate policies and procedures dictating the transfer of positions between customers’ accounts. In addition, the order found that FCStone adhered to no set written policy governing a request by a customer to transfer positions between accounts.
Rather than rely on more concrete measures, FCStone relied on an unwritten policy for its employees, who understood that they were to seek guidance if a transfer was requested between two accounts that were not under common control.
Under CFTC regulation, an FCM, such as FCStone, may transfer positions among customers’ commodity accounts held at the firm:
- As long as the transfer merely constitutes a change from one account to another account
- The underlying beneficial ownership in the two accounts remains the same, according to the Order
The CFTC Order also found that on one occasion FCStone’s employees transferred positions between two accounts that did not yield the same underlying beneficial ownership.
Specifically, this resulted in the transfer of approximately $20 million in gold and silver positions from an individual’s personal account to a corporate account (the individual was a 98.95% owner).
As a result of the transgression, FCStone cooperated fully with the CFTC’s investigation into the matter and that FCStone, on its own accord, revised its written procedures concerning the transfer of positions accordingly.
Earlier this week, INTL FCStone Markets, LLC, a subsidiary of INTL FCStone Inc. (Nasdaq:INTL), launched a new capability for trading Over the Counter (OTC) foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) products to select users of CQG.
The U.S. Commodity Futures Trading Commission (CFTC) has entered an Order filing as well as settling charges against FCStone, LLC, according to a CFTC statement.
FCStone, LLC is a CFTC-registered Futures Commission Merchant (FCM) whose base of operations is in New York. The order called for FCStone to pay a civil monetary penalty of 140,000 for failing to provide and maintain an adequate program of supervision as well as failing to diligently supervise its employees on one occasion in violation of CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 166.3.
In particular, the CFTC order finds that, between a period from 2008 until May 2013, FCStone did not administer adequate policies and procedures dictating the transfer of positions between customers’ accounts. In addition, the order found that FCStone adhered to no set written policy governing a request by a customer to transfer positions between accounts.
Rather than rely on more concrete measures, FCStone relied on an unwritten policy for its employees, who understood that they were to seek guidance if a transfer was requested between two accounts that were not under common control.
Under CFTC regulation, an FCM, such as FCStone, may transfer positions among customers’ commodity accounts held at the firm:
- As long as the transfer merely constitutes a change from one account to another account
- The underlying beneficial ownership in the two accounts remains the same, according to the Order
The CFTC Order also found that on one occasion FCStone’s employees transferred positions between two accounts that did not yield the same underlying beneficial ownership.
Specifically, this resulted in the transfer of approximately $20 million in gold and silver positions from an individual’s personal account to a corporate account (the individual was a 98.95% owner).
As a result of the transgression, FCStone cooperated fully with the CFTC’s investigation into the matter and that FCStone, on its own accord, revised its written procedures concerning the transfer of positions accordingly.
Earlier this week, INTL FCStone Markets, LLC, a subsidiary of INTL FCStone Inc. (Nasdaq:INTL), launched a new capability for trading Over the Counter (OTC) foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) products to select users of CQG.