The Commodity Futures Trading Commission issued an order simultaneously filing and settling charges against ICE Clear Europe Limited (ICEU) for violating regulations requiring derivatives clearing organizations (DCOs) to obtain written acknowledgment letters from a depository. Acknowledgment letters state that the depository was informed that funds deposited are customer funds being held in accordance with the Commodity Exchange Act (CEA) and restrict the use of such funds, among other things. The order requires ICEU to pay a $450,000 civil monetary penalty and to cease and desist from any further violations of the CFTC regulations, as charged.
https://twitter.com/CFTC/status/1445839657371979780
Case Background
The order finds that from February 17, 2015 through August 12, 2019, ICEU, a DCO, opened six customer segregated accounts, each clearly titled to identify them as futures customer funds, without obtaining executed acknowledgment letters from the depository prior to or contemporaneously with the opening of those accounts, or at any time thereafter, and thus failed to meet the requirements of CFTC regulations. ICEU also failed to have adequate standards and procedures designed to protect and ensure the safety and assets belonging to clearing members and their customers, as required by CFTC regulations.
Two of the accounts ICEU opened in April 2018 and May 2019 held customer funds in connection with tri-party reverse repurchase transactions pursuant to an investment services agreement. In aggregate, the two funded accounts collectively held more than $500 million at one time.
The Division of Enforcement Staff responsible for this case are Ansley Schrimpf, Bryan Hsueh, Elizabeth N. Pendleton, Scott R. Williamson, and Robert T. Howell. The Division of Clearing and Risk also assisted in the matter.
Source: CFTC
