$450,000: CFTC fines ICE Clear Europe for derivatives clearing violations

Rick Steves

The derivatives clearing organization also failed to have adequate standards and procedures designed to protect and ensure the safety and assets belonging to clearing members and their customers, the CFTC stated.

The Commodity Futures Trading Commission issued an order simultaneously filing and settling charges against ICE Clear Europe Limited, which will pay a  $450,000 civil monetary penalty.

ICE Clear Europe was charged 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.

According to the order, from February 2015 to August 2019, ICE Clear Europe 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.

The derivatives clearing organization also failed to have adequate standards and procedures designed to protect and ensure the safety and assets belonging to clearing members and their customers, the CFTC stated.

Two of the accounts ICEU opened in April 2018 and May 2019 held customer funds in connection with tri-party reverse repurchase transactions, collectively holding more than $500 million at one time.

With over 5 million contracts cleared every day across multiple asset classes, ICE Clear Europe is one of the world’s most diverse and leading clearing houses. It provides central counterparty clearing and risk management services for interest rate, equity index, agricultural and energy derivatives, as well as European credit default swaps (CDS).

ICE Clear Europe is the London-based derivatives clearing house for the Intercontinental Exchange (ICE). ICE Clear Europe began operations in November 2008, clearing for the futures markets of ICE Futures Europe and ICE’s OTC energy markets, which were previously cleared by LCH. Clearnet.

Financial resources held at the clearing house, including margin and clearing member guaranty funds, total more than $64 billion.

ESMA, the EU’s financial watchdog, has recognized ICE Clear Europe as a third country CCP in January 2021 in the context of Brexit. This made the firm eligible to operate in the European Union.

Read this next

Digital Assets

Zumo launches B2B ‘Crypto-as-a-Service’ solution for brokers

The new product, Zumo Enterprise, also features an embedded ESG and net zero strategy.

Technology

Top Tools to Add to Your Trading Platform to Delight and Retain Traders

The online trading boom that started during the pandemic-led lockdowns is abating. This is in part due to sustained market volatility which seems to be discouraging new investors. For example, day trading volumes in the US for retail investors declined in the last 2 quarters of 2021.  

Technology

Embedded finance platform Alviere taps Marqeta for branded card issuance in Europe and UK

Alviere has recently raised $70 million to fuel the ongoing expansion across the European region and the United Kingdom.

Retail FX

Overcharts partners with dxFeed for CME Group Market Depth

“More and more traders are using Market Depth while conducting volume analysis. Its primary function is to help traders identify potential support and resistance levels.”

Digital Assets

CoinGecko expands collaboration with CER.live security rating

CoinGecko, one of the earliest crypto data aggregators, has integrated the security score data from the CER.live rating. The trust assessments given to crypto projects will be integrated into their pages on CoinGecko website to draw users’ attention to the importance of security.

Metaverse Gaming NFT

Klaytn taps Parity Technologies to build infrastructure for Klaytn-Substrate

Klaytn has initiated a collaboration with blockchain infrastructure company Parity Technologies to strengthen its tech stack and meet the demands of enterprises looking to harness the crypto technology.

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

<