Washington, D.C. – StoneX Markets LLC has been slapped with a $650,000 penalty by the Commodity Futures Trading Commission (CFTC) for failing to disclose thousands of Pre-Trade Mid-Market Marks (PTMMM) and for lax oversight of its compliance process. The order, issued and settled on September 20, 2023, cites violations of CFTC Business Conduct Standards for swap dealers.
According to the CFTC, StoneX failed to meet requirements outlined in CFTC Regulation 23.431 regarding PTMMM disclosure. The firm also violated CFTC Regulation 23.602 by failing to diligently supervise its PTMMM compliance procedures.
The investigation revealed that between 2016 and 2022, StoneX repeatedly failed to accurately disclose PTMMMs for thousands of swap transactions. The CFTC found the company didn’t implement adequate procedures to guarantee the accuracy of its marks, consistent with internal pricing methodologies. Furthermore, StoneX allegedly failed to properly train and monitor its employees on PTMMM disclosure requirements and didn’t provide timely disclosures to counterparties.
As part of the settlement, StoneX is required to complete ongoing remediation efforts and submit regular reports to the CFTC’s Division of Enforcement detailing its compliance progress. The case was led by Daniel C. Jordan, Rick Glaser, and former staff member Amanda Burks.
This action underscores the CFTC’s commitment to enforcing transparency and diligent supervision within the swaps market, ensuring fair practices for all participants.
Source: CFTC.gov
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