The US Commodity Futures Trading Commission (CFTC) has issued an order, filing and settling charges against ABN AMRO Clearing Chicago for failing to segregate or secure sufficient customer funds, not meeting the minimum net capital requirements, and not maintaining accurate books and records or supervising its employees.
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The order also stated that during a CME Group routine audit of ABN AMRO’s books and records as they were on the close of business on 31 May 2011, the CME Group found that ABN AMRO had improperly used a customer’s withdrawn warehouse receipts as collateral for margining purposes. Without these warehouse receipts, the customer’s accounts were under-margined on several occasions, and ABN AMRO had to reduce its adjusted net capital by an amount equal to the margin deficits. Once these reductions were calculated, it was determined that ABN AMRO failed to meet the minimum net capital requirements for a single month-end.
Also, the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) Examination staff conducted a limited review of ABN AMRO beginning 27 January 2012. According to the order, at that time, ABN AMRO was unable to produce a complete and accurate margin report listing for a very limited number of certain types of accounts.
The order found that each of these violations was a result of ABN AMRO’s insufficient controls, reflecting a lack of supervisory controls over commodity interest accounts and/or other activities of its partners, employees, and agents relating to its business as a Commission registrant.
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By GlobalData
