UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

StoneX Markets LLC, 

Respondent.

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CFTC Docket No. 23-44

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 in or about March 2016 to at least June 2022 (“Relevant Period”), StoneX Markets LLC 

(“StoneX” or “Respondent”) violated Section 4s(h)(1) of the Commodity Exchange Act (the 

“Act”), 7 U.S.C. § 6s(h)(1), and Commission Regulations (“Regulation”) 23.431(a) and 

23.602(a), 17 C.F.R. §§ 23.431(a) and 23.602(a) (2022). Therefore, the Commission deems it 

appropriate and in the public interest that public administrative proceedings be, and hereby are, 

instituted to determine whether Respondent 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, Respondent has 

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

Respondent makes the admissions set forth in Section V.A and otherwise neither admits nor 

denies the findings of fact and conclusions of law herein. Respondent consents to the entry of 

this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity Exchange 

Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and acknowledges service 

of this Order.1

1 Respondent agrees that the findings of fact and conclusions of law in this Order shall be taken as true and 

correct and be given preclusive effect without further proof in this proceeding and any other proceeding brought by 

the Commission or to which the Commission is a party or claimant, including but not limited to, a proceeding in 

bankruptcy or receivership. Respondent does 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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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

During the six-year Relevant Period, StoneX, a registered swap dealer, failed to diligently 

supervise its mid-market mark disclosure process, resulting in StoneX’s failure to comply with 

mid-market mark disclosure requirements for thousands of swap transactions. Specifically, 

StoneX failed to implement procedures to ensure that its pre-trade mid-market marks 

(“PTMMMs”)2 were accurate (i.e., consistent with StoneX’s internal pricing methodologies), 

failed to adequately train and monitor its associated persons (“APs”) regarding PTMMM 

disclosure requirements, and failed to timely provide PTMMMs to counterparties on numerous 

occasions throughout the Relevant Period. 

In accepting Respondent’s offer, the Commission recognizes the cooperation of StoneX 

with the Division of Enforcement’s investigation of this matter. The Commission also 

acknowledges Respondent’s representations concerning its remediation in connection with this 

matter. 

B. RESPONDENT 

StoneX Markets LLC is headquartered in Chicago, Illinois and was provisionally 

registered with the Commission as a swap dealer beginning on December 31, 2012, and has been 

fully registered as a swap dealer since August 15, 2023. 

C. FACTS 

 For at least six years, StoneX experienced significant PTMMM-related compliance and 

disclosure failures. Specifically, StoneX failed to implement procedures to confirm that the 

PTMMMs provided to counterparties were calculated in accordance with StoneX’s internal 

pricing methodologies. StoneX also failed to provide sufficient training to its APs regarding 

PTMMM disclosure requirements such that certain APs did not understand the complete 

universe of products that required PTMMM disclosures. StoneX also failed to have a system in 

place to adequately monitor whether its APs were actually providing PTMMMs to counterparties 

when required and in a timely manner. StoneX’s PTMMM monitoring randomly selected one 

AP and one transaction per day to confirm that a PTMMM was sent to a counterparty before the 

swap was executed, without ensuring that transactions from each AP were tested at regular 

intervals. Throughout the Relevant Period, StoneX had hundreds of APs at any given time who 

were entering transactions that required the calculation and disclosure of PTMMMs. The 

foregoing deficiencies led to StoneX failing to provide PTMMMs before the swaps were 

executed and failing to provide any PTMMMs at all on thousands of occasions during the 

Relevant Period. 

StoneX represented to the Division of Enforcement that it has begun implementing 

 

2

 Regulation 23.431(a)(3)(i), 17 C.F.R. § 23.431(a)(3)(i), requires swap dealers to disclose to counterparties the 

“mid-market mark” of the swap “prior to entering into” the swap, hence the term “pre-trade mid-market mark.” 
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enhanced procedures to prevent PTMMM failures going forward. For example, StoneX has 

(1) adopted a trade surveillance and monitoring process which will house PTMMM failure alerts 

in a central location and allow StoneX to identify trends in PTMMM disclosure failures over 

time; (2) provided additional training to APs regarding the circumstances under which PTMMMs 

must be disclosed to counterparties and potential counterparties; (3) enhanced annual review of 

each AP’s PTMMM disclosures; and (4) automated PTMMM disclosures for certain swaps. 

III. LEGAL DISCUSSION 

Title VII of the Dodd-Frank Act amended the Commodity Exchange Act to establish a 

comprehensive regulatory framework for swaps in order to reduce risk, increase transparency, 

and promote market integrity within the financial system. Business Conduct Standards for Swap 

Dealers and Major Swap Participants with Counterparties, 77 Fed. Reg. 9734, 9735, 2012 WL 

506203 (Feb. 17, 2012) (adopting final rules to implement Section 4s(h) of the Act, 7 U.S.C. § 

6s(h)). To achieve these goals, Subpart H of Part 23 of the Commission’s Regulations sets forth 

a number of business conduct standards for swap dealers dealing with counterparties. In 

particular, Regulation 23.431(a)(3)(i), 17 C.F.R. 23.431(a)(3)(i) (2022), requires swap dealers to 

disclose to counterparties the material incentives and conflicts of interest the swap dealer may 

have in connection with a particular swap. Such disclosures include the PTMMM of the swap. 

These disclosure rules “are intended to level the information playing field . . . to enable 

counterparties to make their own informed decisions about the appropriateness of entering into 

the swap.” 77 Fed. Reg. at 9759. The PTMMM should represent “an objective value,” 

providing counterparties with “a baseline to assess swap valuations . . . .” Id. at 9768. 

As a registered swap dealer, StoneX is subject to certain business conduct standards, 

pursuant to Section 4s(h) of the Act, 7 U.S.C. § 6s(h), and the Regulations promulgated 

thereunder. Specifically, Section 4s(h)(1) requires swap dealers to “conform with such business 

conduct standards as prescribed in paragraph [(h)](3) and as may be prescribed by the 

Commission by rule or regulation.” Subparagraph (h)(3) provides that business conduct 

standards adopted by the Commission shall include required disclosure of “the material risks and 

characteristics of the swap” and “the daily mark.” Subparagraph (h)(1)(B) refers to standards 

prescribed by the Commission related to the “diligent supervision of the business.” 

Regulations 23.431(a) and 23.602(a), 17 C.F.R. §§ 23.431(a), 23.602(a) (2022), 

implement the disclosure and supervision requirements, respectively, of Section 4s(h)(1) of the 

Act. As mentioned above, Regulation 23.431(a)(3)(i) requires swap dealers to disclose to 

counterparties “[a]t a reasonably sufficient time prior to entering into a swap,” the “material 

incentives and conflicts of interest” the swap dealer may have in connection with the swap, 

which includes “the [pre-trade] mid-market mark of the swap.” 

Regulation 23.602(a) requires swap dealers to establish and maintain a system to 

supervise, and to diligently supervise, all activities relating to its business performed by its 

employees and agents, and further requires that such system shall be “reasonably designed to 

achieve compliance with the requirements of the Commodity Exchange Act and Commission 

regulations.” 
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A. StoneX Failed to Comply with PTMMM Requirements in Violation of 

Section 4s(h)(1) of the Act and Regulation 23.431(a) 

Regulation 23.431(a)(3)(i) requires swap dealers to disclose a PTMMM to counterparties 

prior to entering into a swap. As described above, during the Relevant Period, StoneX failed to 

provide PTMMMs, or provided them late (i.e., post-entry of the swap), on thousands of 

occasions. As a result, StoneX violated Section 4s(h)(1) of the Act and Regulation 

23.431(a)(3)(i). See In re ED&F Man Capital Mkts. Ltd., CFTC No. 22-13, 2022 WL 827785, at 

**6-7 (Mar. 15, 2022) (consent order); In re Société Générale S.A., CFTC No. 21-36, 2021 WL 

4501471, at **6-7 (Sept. 29, 2021) (consent order). 

B. StoneX Failed to Diligently Supervise its PTMMM Compliance Process in 

Violation of Section 4s(h)(1) of the Act and Regulation 23.602(a) 

 A violation of Regulation 23.602(a) is demonstrated by showing either that: (1) the 

registrant’s supervisory system was generally inadequate; and/or (2) the registrant failed to 

perform its supervisory duties diligently. In re INTL FCStone Mkts., LLC, CFTC No. 15-27, 

2015 WL 4980321, at *3 (Aug. 19, 2015) (consent order). Evidence of violations that “‘should 

be detected by a diligent system of supervision, either because of the nature of the violations or 

because the violations have occurred repeatedly’ is probative of a failure to supervise.” In re

Société Générale Int’l Ltd., CFTC No. 19-38, 2019 WL 4915485, at *7 (Sept. 30, 2019) (consent 

order) (quoting INTL FCStone Mkts., 2015 WL 4980321, at *3). 

As described above, during the Relevant Period, StoneX failed to maintain an adequate 

supervisory system and failed to perform its supervisory obligations diligently with respect to 

PTMMM disclosures by (1) failing to implement procedures to confirm that the PTMMMs 

provided to counterparties were calculated in accordance with StoneX’s internal pricing 

methodologies; (2) failing to provide sufficient training to its APs regarding PTMMM disclosure 

requirements; (3) failing to have a system in place to adequately monitor whether its APs were 

actually providing PTMMMs to counterparties when required and in a timely manner; and (4) 

failing to provide numerous PTMMMs at all or providing them late. Accordingly, StoneX 

violated Section 4s(h)(1) of the Act and Regulation 23.602(a). See, e.g., In re ED&F Man 

Capital Mkts. Ltd., 2022 WL 827785, at *6-7; In re Société Générale S.A., 2021 WL 4501471, at 

*6-7. 

IV. FINDINGS OF VIOLATIONS 

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

violated Section 4s(h)(1) of the Act, 7 U.S.C. § 6s(h)(1), and Regulations 23.431(a) and 

23.602(a), 17 C.F.R. §§ 23.431(a) and 23.602(a) (2022). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it: 

A. Admits that, for numerous transactions during the Relevant Period, it failed to provide 

PTMMMs or failed to provide PTMMMs prior to entering into a swap, that this conduct 
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violated Regulation 23.431, 17 C.F.R. § 23.431 (2022), and that there were deficiencies 

in its supervision of PTMMM compliance during the Relevant Period; 

B. Acknowledges service of this Order; 

C. Admits 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; 

D. Waives: 

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 it 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 (2022), relating to, or arising from, this proceeding; 

7. Any and all claims that it 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; 

E. Acknowledges that the Commission is the prevailing party in this action for purposes of 

the waiver of any and all rights under the Equal Access to Justice Act and the Small 

Business Regulatory Enforcement Fairness Act of 1996, specified in subparts 6 and 7 of 

Paragraph D of this Section; 

F. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondent has consented in the Offer; 
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G. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondent violated Section 4s(h)(1) of 

the Act, 7 U.S.C. § 6s(h)(1), and Regulations 23.431(a) and 23.602(a), 17 C.F.R. 

§§ 23.431(a) ad 23.602(a) (2022); 

2. Orders Respondent to cease and desist from violating Section 4s(h)(1) of the Act 

and Regulations 23.431(a) and 23.602(a); 

3. Orders Respondent to pay a civil monetary penalty in the amount of six-hundred 

fifty thousand dollars ($650,000), plus post-judgment interest; 

4. Orders Respondent and its 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 

H. Represents that it has begun implementing enhanced procedures to prevent pre-trade midmarket mark (“PTMMM”) failures in the future by, among other things, (1) adopting a 

trade surveillance and monitoring process which will house PTMMM failure alerts in a 

central location and allow Respondent to identify trends in PTMMM disclosure failures 

over time; (2) providing additional training to Respondent’s APs regarding the 

circumstances under which PTMMMs must be disclosed to counterparties and potential 

counterparties; (3) enhancing annual review of each AP’s PTMMM disclosures; and (4) 

automating PTMMM disclosures for certain swaps. 

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

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent and its successors and assigns shall cease and desist from violating Section 

4s(h)(1) of the Act, 7 U.S.C. § 6s(h)(1), and Regulations 23.431(a) and 23.602(a), 17 

C.F.R. §§ 23.431(a) and 23.602(a) (2022); 

B. Respondent shall pay a civil monetary penalty in the amount of six-hundred fifty 

thousand dollars ($650,000) (“CMP Obligation”), within ten (10) days of the date of 

entry of this Order. If the CMP Obligation is not paid in full within ten (10) days of the 

date of entry of this Order, then post-judgment interest shall accrue on the unpaid portion 

of 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. 

Respondent 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:
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MMAC/ESC/AMK326 

Commodity Futures Trading Commission 

Division of Enforcement 

6500 S. MacArthur Blvd. 

HQ Room 266 

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, Respondent shall contact Tonia 

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

comply with those instructions. Respondent 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. 

C. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither it nor any of its agents or 

employees under its 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 Respondent’s 

and/or its agents’ and/or employees’: (i) testimonial obligations; or (ii) right to 

take legal positions in other proceedings to which the Commission is not a party. 

Respondent shall comply with this agreement, and shall undertake all steps 

necessary to ensure that all of its agents and/or employees under its authority or 

control understand and comply with this agreement. 

2. Cooperation, in General: Respondent shall cooperate fully and expeditiously with 

the Commission, including the Commission’s Division of Enforcement, in this 

action, and in any current or future Commission investigation or action related 

thereto. Respondent shall also cooperate in any investigation, civil litigation, or 

administrative matter related to, or arising from, this action. 

3. Partial Satisfaction: Respondent understands and agrees that any acceptance by 

the Commission of any partial payment of Respondent’s CMP Obligation shall 

not be deemed a waiver of its 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. 

4. Change of Address/Phone: Until such time as Respondent satisfies in full its 

CMP Obligation as set forth in this Order, Respondent shall provide written 
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notice to the Commission by certified mail of any change to its telephone number 

and mailing address within ten calendar days of the change. 

5. Notices: Until such time as Respondent satisfies in full its CMP Obligation, upon 

the commencement by or against Respondent of insolvency, receivership or 

bankruptcy proceedings or any other proceedings for the settlement of 

Respondent’s debts, all notices to creditors required to be furnished to the 

Commission under Title 11 of the United States Code or other applicable law with 

respect to such insolvency, receivership bankruptcy or other proceedings, shall be 

sent to the address below: 

Secretary of the Commission 

Office of General Counsel 

Commodity Futures Trading Commission 

Three Lafayette Centre 

1155 21st Street N.W. 

Washington, D.C. 20581 

6. Remediation: Respondent will continue to implement specific remediation 

efforts, in relation to the supervision and PTMMM disclosure deficiencies that are 

the subject of the Order. Such remediation efforts shall, at a minimum, be 

designed to confirm that PTMMM disclosures are: 

a. Consistently provided to appropriate counterparties; 

b. Provided prior to entering into a swap; and 

c. Developed and provided to counterparties consistent with 

Respondent’s internal policies and procedures addressing 

reasonable pricing methodologies. 

Furthermore, Respondent shall implement adequate policies, procedures, and 

controls to confirm compliance with Regulation 23.431. These policies, 

procedures, and controls shall, among other things, include: 

a. Respondent’s testing program for monitoring compliance with the 

supervision and PTMMM requirements; and 

b. Requirements for the training of staff responsible for compliance 

with Respondent’s PTMMM disclosures. 

Within sixty (60) days of the entry of this Order, Respondent shall make a written 

report to the Commission, through the Division of Enforcement (“DOE”) and the 

Market Participants Division (“MPD”), providing Respondent’s updated 

remediation plan since the entry of this Order. Within 365 days of the entry of 

this Order, Respondent shall submit a final written report to the Commission, 

through the DOE and MPD. The final written report shall explain how 

Respondent has complied with the undertakings provided for in Section VI.C.6 of 

this Order and provide an update on the status of Respondent’s remedial efforts 

including, but not limited to, discussion of: the policies, procedures and controls