$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

Binance executives sue Nigerian authorities over rights violation

Two senior executives from Binance have filed a lawsuit against against Nigeria’s national security adviser’s office and its anti-corruption agency, alleging violations of their fundamental rights.

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

<