An international derivatives marketplace has recently announced disciplinary actions against SG Americas Securities LLC. This decision came following a settlement offer where SG Americas Securities neither admitted nor denied the violations. The Business Conduct Committee of the Chicago Mercantile Exchange (CME) determined that from December 26, 2023, to January 2, 2024, SG Americas Securities engaged in Exchange of Futures for Physical (EFP) trades related to Australian Dollar, Canadian Dollar, and Japanese Yen futures.
These trades were found to lack legitimate ownership transfer of the underlying assets, as they were primarily executed for the purpose of moving futures positions between accounts that had common beneficial ownership. As a result, the company’s actions were deemed a violation of specific CME rules—namely Rule 538.C. and Rule 534.
In light of these findings, the CME imposed a penalty of $40,000 on SG Americas Securities. The decision to accept the settlement offer took into account the company’s prior voluntary disclosure of the trades to the Market Regulation Department before formal proceedings began. This information was considered significant in the committee’s review, influencing the final penalty imposed.