Northern Trust Global Investments Ltd

Status: Final Sanction Detail: THE FINE WAS PAID IN FULL ON JULY 7, 2021. Summary: THE NORTHERN TRUST COMPANY ("NORTHERN TRUST"), ACTING IN ITS CAPACITY AS A SWAP DEALER, WAS ORDERED TO PAY A $999,000 FINE BYTHE NATIONAL FUTURES ASSOCIATION ("NFA"). THE DECISION BY THE NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") WAS BASED ON ACOMPLAINT AND A SETTLEMENT OFFER SUBMITTED BY NORTHERN TRUST, IN WHICH IT NEITHER ADMITTED NOR DENIED THE ALLEGATIONS. THEBCC FOUND THAT NORTHERN TRUST COMMITTED THE ALLEGED RULE VIOLATIONS AND CONSIDERED RECENT NORTHERN TRUST REMEDIATIONEFFORTS IN ACCEPTING THE SETTLEMENT OFFER. GENERALLY, IT WAS ALLEGED THAT NORTHERN TRUST DID NOT ESTABLISH AND IMPLEMENTADEQUATE WRITTEN PROCEDURES REASONABLY DESIGNED TO ENSURE THAT NORTHERN TRUST PROVIDED COUNTERPARTIES WITH APPROPRIATEDOCUMENTATION AND DISCLOSURES PRIOR TO OR CONTEMPORANEOUSLY WITH ENTERING INTO SWAP TRANSACTIONS AND DID NOT ESTABLISH ASYSTEM TO DILIGENTLY SUPERVISE ITS SWAP DEALER ACTIVITIES, INCLUDING THE REMEDIATION, RETESTING AND RESOLUTION OF NON-COMPLIANCE ISSUES.

Allegations: ON JUNE 18, 2015, THE SECURITIES AND EXCHANGE COMMISSION (SEC) BROUGHT ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS AGAINST 36 MUNICIPAL SECURITIES DEALERS, INCLUDING THE NORTHERN TRUST COMPANY (NORTHERN TRUST), IN WHICH THE SEC ALLEGED THAT THE MUNICIPAL SECURITIES DEALERS CONDUCTED INADEQUATE DUE DILIGENCE EFFORTS IN THE ISSUANCE OF SECURITIES BY CERTAIN MUNICIPAL ISSUERS, AND THEREFORE VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT OF 1933. NORTHERN TRUST, WITHOUT ADMITTING OR DENYING ANY FINDINGS, CONSENTED TO A $60,000 CIVIL PENALTY IN CONNECTION WITH THREE MUNICIPAL SECURITIES OFFERING THAT TOOK PLACE IN 2010. THE SEC FURTHER ORDERED NORTHERN TRUST AND THE OTHER DEALERS TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO MUNICIPAL SECURITIES UNDERWRITING DUE DILIGENCE AND TO ADOPT RECOMMENDATIONS MADE BY THE INDEPENDENT CONSULTANT WITHIN NINE MONTHS OF THE ISSUANCE OF THE ORDER. Status: Final Sanction Detail: THE FINE WAS PAID IN FULL ON JUNE 19, 2015. Summary: ON JUNE 18, 2015, THE SECURITIES AND EXCHANGE COMMISSION (SEC) BROUGHT ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS AGAINST 36 MUNICIPAL SECURITIES DEALERS, INCLUDING THE NORTHERN TRUST COMPANY (NORTHERN TRUST), IN WHICH THE SEC ALLEGED THAT THE MUNICIPAL SECURITIES DEALERS CONDUCTED INADEQUATE DUE DILIGENCE EFFORTS IN THE ISSUANCE OF SECURITIES BY CERTAIN MUNICIPAL ISSUERS, AND THEREFORE VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT OF 1933. NORTHERN TRUST, WITHOUT ADMITTING OR DENYING ANY FINDINGS, CONSENTED TO A $60,000 CIVIL PENALTY IN CONNECTION WITH THREE MUNICIPAL SECURITIES OFFERING THAT TOOK PLACE IN 2010. THE SEC FURTHER ORDERED NORTHERN TRUST AND THE OTHER DEALERS TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO MUNICIPAL SECURITIES UNDERWRITING DUE DILIGENCE AND TO ADOPT RECOMMENDATIONS MADE BY THE INDEPENDENT CONSULTANT WITHIN NINE MONTHS OF THE ISSUANCE OF THE ORDER.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"), THE NORTHERN TRUST COMPANY ("TNTC") CONSENTED TO ENTRY OF AN ORDER ISSUED ON SEPTEMBER 30, 2019 FINDING THAT FROM 2013 THROUGH AT LEAST 2018 TNTC FAILED TO REPORT CERTAIN SWAPS TO A SWAP DATA REPOSITORY CONSISTENT WITH THE REQUIREMENTS OF THE COMMODITY EXCHANGE ACT AND CFTC REGULATIONS, AND THAT THOSE SWAP REPORTING FAILURES WERE A DIRECT RESULT OF TNTC'S FAILURE TO ADEQUATELY SUPERVISE ITS SWAP DEALER, INCLUDING FAILING TO HIRE QUALIFIED SUBJECT MATTER EXPERTS TO ENSURE SWAP DEALER COMPLIANCE. THE CFTC'S ORDER REQUIRES THAT TNTC PAY A CIVIL MONETARY PENALTY OF $1 MILLION, AND THAT IT ENHANCE ITS SUPERVISORY PROGRAM, POLICIES, PROCEDURES AND CONTROLS, AND PROVIDE ADDITIONAL TRAINING TO RELEVANT PERSONNEL. TNTC WILL PROVIDE STATUS REPORTS TO THE CFTC CONCERNING ITS REMEDIATION PROGRESS. ADDITIONALLY, TNTC HAS RETAINED OUTSIDE CONSULTANTS TO REVIEW ITS SWAP DEALER PROCESSES AND PROCEDURES, HAS HIRED NEW PERSONNEL TO OVERSEE COMPLIANCE AT ITS SWAP DEALER AND HAS TAKEN SUBSTANTIAL STEPS TO IMPROVE ITS PROCESSES FOR SWAP REPORTING GOING FORWARD. Status: Final Sanction Detail: THE FINE WAS PAID IN FULL ON 10/7/2019. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"), THE NORTHERN TRUST COMPANY ("TNTC") CONSENTED TO ENTRY OF AN ORDER ISSUED ON SEPTEMBER 30, 2019 FINDING THAT FROM 2013 THROUGH AT LEAST 2018 TNTC FAILED TO REPORT CERTAIN SWAPS TO A SWAP DATA REPOSITORY CONSISTENT WITH THE REQUIREMENTS OF THE COMMODITY EXCHANGE ACT AND CFTC REGULATIONS, AND THAT THOSE SWAP REPORTING FAILURES WERE A DIRECT RESULT OF TNTC'S FAILURE TO ADEQUATELY SUPERVISE ITS SWAP DEALER, INCLUDING FAILING TO HIRE QUALIFIED SUBJECT MATTER EXPERTS TO ENSURE SWAP DEALER COMPLIANCE. THE CFTC'S ORDER REQUIRES THAT TNTC PAY A CIVIL MONETARY PENALTY OF $1 MILLION, AND THAT IT ENHANCE ITS SUPERVISORY PROGRAM, POLICIES, PROCEDURES AND CONTROLS, AND PROVIDE ADDITIONAL TRAINING TO RELEVANT PERSONNEL. TNTC WILL PROVIDE STATUS REPORTS TO THE CFTC CONCERNING ITS REMEDIATION PROGRESS. ADDITIONALLY, TNTC HAS RETAINED OUTSIDE CONSULTANTS TO REVIEW ITS SWAP DEALER PROCESSES AND PROCEDURES, HAS HIRED NEW PERSONNEL TO OVERSEE COMPLIANCE AT ITS SWAP DEALER AND HAS TAKEN SUBSTANTIAL STEPS TO IMPROVE ITS PROCESSES FOR SWAP REPORTING GOING FORWARD.