International derivatives marketplace CME Group has posted a notice of disciplinary action against DRW Execution Services, LLC.
Pursuant to an offer of settlement in which DRW Execution Services, LLC (“DEX”) neither admitted nor denied the rule violation or factual finding upon which the penalty is based, a Panel of the Chicago Mercantile Exchange (CME) Business Conduct Committee found that on certain dates from May 2023 through September 2024, DEX did not maintain capital in excess of the minimum required due to a capital charge resulting from the failure to collect required margin from affiliates.
The Panel concluded that DEX thereby violated CME Rule 970.A.1.
CME Rule 970. Financial Requirements (in part) states:
“A. Subject to exemptions granted by Exchange staff, all clearing members, including non-FCMs, must comply with the requirements set forth in CFTC Regulations 1.10, 1.12, 1.17 and 1.18. This includes, but is not limited to, the following:
- Maintenance of minimum capital requirements of at least $5 million except that a clearing member that is a bank must maintain minimum Tier I Capital (as defined in accordance with regulation applicable to the relevant bank) of at least $5 billion.”
In accordance with the settlement offer, the Panel ordered DEX to pay a $50,000 fine.
