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June 29, 2021
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NFA orders Chicago, Ill. swap dealer The Northern Trust Company to pay a $999,000 fine
June 29, Chicago—NFA has ordered Chicago, Ill. swap dealer (SD) The Northern Trust Company (Northern Trust) to pay a $999,000 fine.
The Decision, issued by NFA's Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by Northern Trust, in which it neither admitted nor denied the allegations. The Complaint alleged that Northern Trust failed to establish adequate written procedures reasonably designed to ensure the firm executed written swap trading relationship documentation with counterparties prior to or contemporaneously with entering into a swap transaction. The Complaint also alleged that Northern Trust failed to provide swap counterparties with certain material disclosures prior to entering into a swap transaction and failed to provide required pre-trade mid-market marks and daily marks to some counterparties. The Complaint also alleged that Northern Trust failed to sufficiently implement procedures designed to ensure compliance with CFTC business conduct standards and failed to establish and implement procedures reasonably designed for the handling, management response, remediation, retesting and resolution of non-compliance issues. Finally, the Complaint alleged that Northern Trust failed to establish and implement an adequate system to diligently supervise its SD activities.
In its Decision, the BCC found that Northern Trust committed the alleged rule violations and considered Northern Trust's recent remediation efforts in accepting the settlement offer.