A commodity exchange settled CFTC charges for failing to meet stress testing requirements pursuant to a derivatives clearing organization registration exemption.
In its Order, the CFTC stated that while Korea Exchange Inc. ("KRX") conducted the required daily stress tests of its total financial resources, it failed to use the tests in assessing and adjusting its financial resources as required. The CFTC found that KRX was made aware of this and changed its policies to pursue remedial measures. The CFTC stated that KRX made a false report to the FTC by not disclosing the exchange's failure to use the tests in evaluating financial resources. The CFTC found that KRX falsely certified that it was adhering to certain international financial management standards, known as "Principles of Financial Market Infrastructures."
KRX settled for $150,000 and agreed to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations.
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