JPMorgan Fined By CTFC For Large Trader Reporting Inaccuracies

The U.S. Commodity Futures Trading Commission (CFTC) today simultaneously filed and settled charges against JPMorgan Ventures Energy Corp. (JPMVE) and JPMorgan Chase Bank, N.A. (JPMCB) for failing to comply with their obligations to submit accurate large trader reports (LTRs) for physical commodity swap positions, in violation of the Commodity Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Act (CEA).

The CFTC order requires that JPMorgan pays a $225,000 civil monetary penalty and ceases committing further violations of the CEA and CFTC regulations.

Large trader reporting for physical commodity Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term is essential to the CFTC’s ability to conduct effective surveillance of markets in U.S. physical commodity futures and economically equivalent swaps. The order states that from March 2013, swap dealers who are required to submit LTRs are expected to fully comply with their governing requirements in conjunction with further instructions laid out by the CFTC.

The order found that from the period between March 1, 2013 and April 30, 2014, JPMorgan filed LTRs that routinely contained errors. These included (1) reporting the underlying commodity, futures equivalent months, and currency value strike price in the wrong data fields; (2) reporting futures contract equivalents, commodity units, and notional values that were incorrect or missing; (3) providing identifying information for principals that attributed positions to the wrong entities; and (4) incorrectly reporting counterparty names. JPMorgan also failed to submit LTRs on two days.

JPMorgan has since made modifications to its data processing and reporting systems to comply with their LTR reporting requirements, correcting errors as they were identified, and have submitted corrected historical LTRs.