WASHINGTON, D.C. – BNP Paribas Securities Corp. has been penalized $140,000 by the U.S. Commodity Futures Trading Commission (CFTC) for violations of regulations governing how segregated commodity customer funds are invested, the agency announced October 20, 2015.
The CFTC issued an order detailing that the New York-based Futures Commission Merchant (FCM) exceeded concentration limits on three occasions in November and December 2014. The violations involved investments in money market mutual funds.
According to the order, BNP Paribas invested more than 10 percent of segregated customer funds in a single money market fund on two days, breaching Regulation 1.25(b)(3)(ii)(D). Additionally, on two days, the company invested over 50 percent of these funds in money market mutual funds, violating Regulation 1.25(b)(3)(i)(F).
The CFTC noted that despite the regulatory breaches, no customer losses occurred as a result of these violations. BNP Paribas self-reported two of the violations, and a third was discovered by the CME Group Inc., a Self-Regulatory Organization.
The settlement requires BNP Paribas to cease and desist from further violations of CFTC regulations. The company is also mandated to review and strengthen its policies and procedures, and provide training to employees to ensure future compliance. The CFTC acknowledged BNP Paribas’s cooperation during the investigation and its proactive steps to address the issues.
The CFTC expressed its appreciation for the assistance provided by the CME Group Inc. in this matter.
Source: CFTC.gov
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