The US Commodity Futures Trading Commission (CFTC) has issued an order filing and settling charges against Agrocorp International Pte Ltd, a commodities trading and distribution company headquartered in Singapore, for failing to file CFTC Form 304 Reports reporting its call cotton purchases and sales when it held or controlled at least 100 cotton futures positions.
The order requires Agrocorp to pay a USD150,000 civil monetary penalty and prohibits it from committing future violations of CFTC Regulation 19.02.
The order also states that Agrocorp will undertake to adopt and maintain internal controls that are reasonably designed to ensure that the agents and employees under Agrocorp’s authority and control comply fully with the CFTC cotton reporting regulations, including but not limited to designating a specific individual or individuals with responsibility for filing CFTC Form 304. The order further states that Agrocorp will provide its employees with training to ensure further compliance with CFTC requirements.
Specifically, the order finds that, on approximately 22 occasions in late 2012 and between 7 October 2014 and 13 February 2015, Agrocorp held or controlled at least 100 cotton futures but failed to file weekly Form 304 Reports as required. Cotton merchants and dealers that hold or control at least 100 cotton futures positions, the reportable level for cotton futures contracts under CFTC Regulations, are required to file CFTC Form 304 Reports that show their call cotton purchases and sales as of the close of business Friday, and no later than two business days following the date of the report.
According to regulations cited in the order, call cotton refers to physical cotton bought or sold, or contracted for purchase or sale, at a price to be fixed later based on a specified delivery month’s futures price.
