UNITED STATES OF AMERICA

Before the

COMMODITY FUTURES TRADING COMMISSION

In the Matter of:

JPMORGAN CHASE BANK, 

N.A., J.P. MORGAN

SECURITIES LLC, and J.P.

MORGAN SECURITIES, plc,

Respondents.

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) CFTC Docket No. 22-20

ORDER INSTITUTING PROCEEDINGS PURSUANT TO

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission”) has reason to believe that 

from at least September 22, 2015, until at least February 14, 2020 (“Relevant Period”), 

JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Securities, plc 

(collectively, “Respondents”) violated Sections 2(a)(13)(G) and 4r(a)(3) of the Commodity 

Exchange Act (“Act”), 7 U.S.C. §§ 2(a)(13)(G), 6r(a)(3), and Regulation 45.3, 17 C.F.R. § 45.3 

(2020), of the Commission Regulations (“Regulation”) promulgated thereunder. Therefore, the 

Commission deems it appropriate and in the public interest that public administrative

proceedings be, and hereby are, instituted to determine whether Respondents engaged in the 

violations set forth herein and to determine whether any order should be issued imposing 

remedial sanctions.

In anticipation of the institution of an administrative proceeding, Respondents have 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Respondents consent to 

the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Act, 

Making Findings, and Imposing Remedial Sanctions (“Order”), and acknowledge service of this 

Order.1

1 Respondents consent to the use of the findings of fact and conclusions of law in this Order in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party or claimant, and agree 

that they shall be taken as true and correct and be given preclusive effect therein, without further proof. 

Respondents do not consent, however, to the use of this Order, or the findings or conclusions herein, as the sole 

basis for any other proceeding brought by the Commission or to which the Commission is a party or claimant, other 
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II. FINDINGS

The Commission finds the following: 

A. SUMMARY

Reporting is at the heart of the Commission’s market and financial surveillance 

programs, which are critical to the Commission’s mission to protect market participants and 

promote market integrity. Accurate swap data is essential to effective fulfillment of the 

regulatory functions of the Commission, including meaningful surveillance and enforcement 

programs. 

As provisionally registered swap dealers, Respondents are required to comply with 

certain reporting requirements related to their swap transactions. During the Relevant Period, 

Respondents failed to report 2,184,520 short-dated foreign exchange (“FX”) swap transactions. 

This conduct violated Sections 2(a)(13)(G) and 4r(a)(3) of the Act, 7 U.S.C. §§ 2(a)(13)(G), 

6r(a)(3), and Regulation 45.3, 17 C.F.R. § 45.3 (2020). 

B. RESPONDENTS

JPMorgan Chase Bank, N.A. became a provisionally registered swap dealer on December 

31, 2012. JPMorgan Chase Bank, N.A. is a wholly-owned indirect U.S. subsidiary of JPMorgan 

Chase & Co.

J.P. Morgan Securities LLC became a provisionally registered swap dealer on December 

31, 2012. J.P. Morgan Securities LLC is a wholly-owned indirect U.S. subsidiary of JPMorgan 

Chase & Co.

J.P. Morgan Securities, plc became a provisionally registered non-U.S. swap dealer on 

October 9, 2013. J.P. Morgan Securities, plc is a wholly owned indirect subsidiary of JPMorgan 

Chase & Co. 

C. FACTS

Short-dated FX swap transactions, sometimes referred to as “tomorrow-next” 

transactions, are transactions in which the parties exchange two currencies the day after 

execution (i.e., “tomorrow”), and then reverse that exchange at a predetermined rate on the 

following business day (i.e., the “next” day). Short-dated FX swaps are reportable transactions 

under the Act. 

During the Relevant Period, Respondents erroneously believed that short-dated FX swap 

transactions did not meet the definition of a “foreign exchange swap” under the Act as 

interpreted in the CFTC’s 2012 guidance regarding the definition of a swap, and therefore were 

 

than: a proceeding in bankruptcy or receivership; or a proceeding to enforce the terms of this Order. Respondents 

do not consent to the use of the Offer or this Order, or the findings or conclusions in this Order, by any other party in 

any other proceeding.
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not required to be reported.2 As a result, Respondents did not report 2,184,520 short-dated FX 

swap transactions they executed during the Relevant Period. These unreported short-dated FX 

swap transactions represented approximately fifty-one percent of the total number of FX swaps 

that Respondents executed during that same period. 

Respondents began reporting short-dated FX swaps in February 2020. Respondents have 

represented that they have reported all of the previously-unreported FX swaps transactions they 

were obligated to report. 

III. LEGAL DISCUSSION

A. Respondents’ Conduct Violated Sections 2(a)(13)(G) and 4r(a)(3) of the Act and 

Regulation 45.3.

Sections 2(a)(13)(G) and 4r(a)(1) of the Act, 7 U.S.C. §§ 2(a)(13)(G), 6r(a)(1), require that 

all swaps, both cleared and uncleared, be reported to a registered swap data repository (“SDR”). 

Section 4r(a)(3) of the Act, 7 U.S.C. § 6r(a)(3), sets forth which swap counterparty is required to 

report the swap to a SDR. These reporting requirements apply to short-dated FX swaps. Further 

Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap Agreement;” Mixed 

Swaps; Security-Based Swap Agreement Recordkeeping, 77 Fed. Reg. 48208, 48254 n.522 (Aug. 

13, 2012); see also Determination of Foreign Exchange Swaps and Foreign Exchange Forwards 

Under the Commodity Exchange Act, 77 Fed. Reg. 69694, 69703 (Nov. 20, 2012) (stating that 

notwithstanding a determination by the Department of the Treasury to exempt foreign exchange 

swaps from regulation as “swaps” under the CEA, such swaps would remain subject to the 

Commission’s reporting requirements). Part 45 of the Regulations, 17 C.F.R. pt. 45 (2020), 

implements the Act’s swaps data reporting requirement. Regulation 45.3, 17 C.F.R. § 45.3, 

requires swap dealers to report swap creation data electronically to a swap data repository, 

specifies that a swap dealer is to report all primary economic terms data, and sets forth the 

manner in which this data shall be reported, including FX swaps. 

 Short-dated FX swaps constitute “foreign exchange swaps” under the Act because they 

involve an exchange of currencies and a reversal of that exchange on specific dates and at rates 

fixed at the inception of the contract. See Section 1a(25) of the Act, 7 U.S.C. § 1a(25). 

Therefore, Respondents were required by the Act and Regulations to report their short-dated FX 

swaps, which they failed to do during the Relevant Period. As a result, Respondents violated 

Sections 2(a)(13)(G) and 4r(a)(3) of the Act and Regulation 45.3. 

 

2 This guidance was published in Further Definition of “Swap,” “Security-Based Swap,” and “Security-Based Swap 

Agreement;” Mixed Swaps; Security-Based Swap Agreement Recordkeeping, 77 Fed. Reg. 48208, 48256-58 (Aug. 

13, 2012). 
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IV. FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that, during the Relevant Period, 

Respondents violated Sections 2(a)(13)(G) and 4r(a)(3) of the Act, 7 U.S.C. §§ 2(a)(13)(G), 

6r(a)(3), and Regulation 45.3, 17 C.F.R. § 45.3 (2020). 

V. OFFER OF SETTLEMENT

Respondents have submitted the Offer in which they, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledge service of this Order;

B. Admit the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waive: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing;

3. All post-hearing procedures;

4. Judicial review by any court;

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 

6. Any and all claims that they may possess under the Equal Access to Justice Act, 

5 U.S.C. § 504 and 28 U.S.C. § 2412, and/or the rules promulgated by the 

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148 (2019), relating to, or arising from, this proceeding; 

7. Any and all claims that they may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Stipulate that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondents have consented in the Offer; 
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E. Consent, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondents violated Sections 2(a)(13)(G) 

and 4r(a)(3) of the Act, 7 U.S.C. §§ 2(a)(13)(G), 6r(a)(3), and Regulation 45.3, 

17 C.F.R. § 45.3 (2020); 

2. Orders Respondents to cease and desist from violating Sections 2(a)(13)(G) and 

4r(a)(3) of the Act and Regulation 45.3; 

3. Orders Respondents to pay, jointly and severally, a civil monetary penalty in the 

amount of eight hundred fifty thousand dollars ($850,000), plus post-judgment 

interest; and

4. Orders Respondents and their successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order; 

and

F. Represent that they have remediated these violations, including, but not limited to, backreporting all previously unreported short-dated FX swap transactions executed during the 

Relevant Period.

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER

Accordingly, IT IS HEREBY ORDERED THAT:

1. Respondents and their successors and assigns shall cease and desist from violating

Sections 2(a)(13)(G) and 4r(a)(3) of the Act, 7 U.S.C. §§ 2(a)(13)(G), 6r(a)(3), and 

Regulation 45.3, 17 C.F.R. § 45.3 (2021). 

2. Respondents shall pay, jointly and severally, a civil monetary penalty in the amount of 

eight hundred fifty thousand dollars ($850,000) (“CMP Obligation”). If the CMP 

Obligation is not paid immediately, then post-judgment interest shall accrue on the CMP 

Obligation beginning on the date of entry of this Order and shall be determined by using 

the Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 U.S.C. 

§ 1961. 

Respondents shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below:

MMAC/ESC/AMK326

Commodity Futures Trading Commission

Division of Enforcement 

6500 S. MacArthur Blvd. 
6 

HQ Room 181 

Oklahoma City, OK 73169 

(405) 954-6569 office 

(405) 954-1620 fax 

9-AMC-AR-CFTC@faa.gov 

 If payment is to be made by electronic funds transfer, Respondents shall contact Tonia 

King or her successor at the above address to receive payment instructions and shall fully 

comply with those instructions. Respondents shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

3. Respondents and their successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer:

1. Public Statements: Respondents agree that neither they nor any of their

successors and assigns, agents or employees under their authority or control shall 

take any action or make any public statement denying, directly or indirectly, any 

findings or conclusions in this Order or creating, or tending to create, the 

impression that this Order is without a factual basis; provided, however, that 

nothing in this provision shall affect Respondents’: (i) testimonial obligations; or 

(ii) right to take legal positions in other proceedings to which the Commission is 

not a party. Respondents and their successors and assigns shall comply with this 

agreement, and shall undertake all steps necessary to ensure that all of their agents 

and/or employees under their authority or control understand and comply with 

this agreement. 

2. Partial Satisfaction: Respondents understand and agree that any acceptance by 

the Commission of any partial payment of Respondents’ CMP Obligation shall 

not be deemed a waiver of their obligation to make further payments pursuant to 

this Order, or a waiver of the Commission’s right to seek to compel payment of 

any remaining balance.

3. Change of Address/Phone: Until such time as Respondents satisfy in full their 

CMP Obligation as set forth in this Order, Respondents shall provide written 

notice to the Commission by certified mail of any change to their telephone 

number and mailing address within ten calendar days of the change. 

The provisions of this Order shall be effective as of this date.
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By the Commission.

_________________________________ 

Robert N. Sidman 

Deputy Secretary of the Commission

Commodity Futures Trading Commission

Dated: July 5, 2022