NFA fines Sigma Broking $150,000 for AML and ANC failures

Rick Steves

The NFA found in March 2023 that Sigma Broking failed to properly conduct its AML and ANC requirements.

The Chicago branch of the National Futures Association has ordered Sigma Broking Limited to pay a $150,000 fine.

According to the regulator, the brokerage failed to conduct annual anti-money laundering audits, failed to keep written pre-trade communications readily accessible, and failed to supervise.

NFA said Sigma Broking has a history of failed AML audits

Sigma Broking is a UK-based financial services firm that provides brokerage services. It operates as an interdealer broker, facilitating transactions between financial institutions. The firm offers a range of services, including trading in derivatives, foreign exchange, and commodities.

The brokerage firm is known for its expertise in options and other derivative products, providing liquidity and market-making services. It also offers bespoke trading solutions tailored to the needs of its clients, which include banks, hedge funds, and other financial institutions.

Sigma Broking operates as an execution only IB in the United States and specializes in providing block futures and options cleared on US and non-US institutional clients.

The NFA’s Business Conduct Committee, which reminded that the broker has a history of failing to conduct its required AML audits and miscalculating its adjusted net capital (ANC), found in March 2023 that Sigma failed its AML and ANC obligations once again.

The decision, issued by an NFA Hearing Panel, is based on the committee’s complaint. Sigma Broking settled with the NFA while neither admitting nor denying the allegations in the complaint.

In its Decision, the Hearing Panel found that Sigma Broking failed to conduct annual anti-money laundering audits, in violation of NFA Compliance Rule 2-9(c); failed to keep written pre-trade communications readily accessible, in violation of NFA Compliance Rule 2-10(a); and failed to supervise, in violation of NFA Compliance Rule 2-9(a).

Sigma Broking now leverages ION’s XTP Execution suite

Sigma Broking recently enhanced its partnership with ION, enabling its customers to route orders to the London Metal Exchange (LME) more efficiently. Sigma, known for its brokerage services to institutional clients, has incorporated ION’s XTP Execution suite (XTP-E) into its offerings. This suite is recognized for its effectiveness in executing listed derivatives trades.

Established in 2008, Sigma has expanded into multiple asset classes, including commodities and global equity execution. It became a Category 1 Ring Dealing member of the LME in 2022, marking a significant milestone in its growth.

Sigma’s clientele includes investment banks, base metals producers and consumers, hedge funds, and portfolio managers. The company prides itself on providing access to major exchanges and products, along with custom hedging strategies and execution services.

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