The Commodity Futures Trading Commission (Commission) requires each futures commission merchant (FCM), including Citigroup Global Markets Inc. (CGMI), to provide the following information to a customer prior to the time the customer first enters into an account agreement with the FCM or deposits money or securities (funds) with the FCM. Except as otherwise noted below, the information set out is the most recent available data as of August 2023. CGMI will update this information annually and as necessary to take account of any material change to its business operations, financial condition or other factors that CGMI believes may be material to a customer’s decision to do business with CGMI. Nonetheless, CGMI’s business activities and financial data are not static and will change in non-material ways frequently throughout any 12-month period.
NOTE: CGMI is a subsidiary of Citigroup Inc. Information that may be material with respect to CGMI for purposes of the Commission's disclosure requirements may not be material to Citigroup Inc. for purposes of applicable securities laws.
Firm and its Principals
FCM’s name, address of its principal place of business, phone number, fax number and email address.
Citigroup Global Markets Inc.
388 Greenwich Street, Trading Floor 3
New York, NY 10013
(212) 723-5560 (phone)
(212) 723-8977 (fax)
FCM’s designated self-regulatory organization (DSRO) and DSRO’s website address.
Chicago Board of Trade, CME Group
Firm’s Business (Ref 4.0)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of February 29, 2024)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of January 31, 2024)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of December 31, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of November 30, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of October 31, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of September 30, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of August 31, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of July 30, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of June 30, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of May 31, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of April 28, 2023)
Percentage of Assets and Capital for significant types of business activities and product lines engaged in by the FCM (as of March 31, 2023)
FCM Customer Business
FCM’s business on behalf of its customers, in its capacity as such, including:
Futures Exchange & Clearing Memberships:
|
Exchange |
Membership Type |
Clearing Firm |
Clearing House |
|---|---|---|---|
|
Chicago Board Options Exchange |
Clearing Member |
Citigroup Global Markets Inc. |
Options Clearing Corp. |
|
Chicago Mercantile Exchange - CME |
Clearing Member |
Citigroup Global Markets Inc. |
CME |
|
Chicago Board of Trade - CBOT |
Clearing Member |
Citigroup Global Markets Inc. |
CME |
|
New York Mercantile Exchange - NYMEX |
Clearing Member |
Citigroup Global Markets Inc. |
CME |
|
Commodity Exchange Inc. - COMEX |
Clearing Member |
Citigroup Global Markets Inc. |
CME |
|
Dubai Mercantile Exchange - DME |
Clearing Member |
Citigroup Global Markets Inc. |
CME |
|
ICE Futures Europe |
Clearing Member |
Citigroup Global Markets Inc. |
ICE Clear Europe |
|
ICE Futures US |
Clearing Member |
Citigroup Global Markets Inc. |
ICE Clear US |
|
Nodal Exchange |
Clearing Member |
Citigroup Global Markets Inc. |
Nodal Clear |
OTC Clearing Memberships:
|
LCH.Clearnet Limited |
|
ICE Clear Credit |
|
Chicago Mercantile Exchange |
|
Eurex Clearing AG |
OTC SEF Memberships
|
Bloomberg |
|
BGC Derivatives Markets |
|
DW SEF |
|
Tradeweb |
|
LatAm SEF |
|
ICE Swap |
|
ICAP IGDL |
|
NEX SEF |
|
Tullet Prebon |
|
GFI |
|
Tradition |
|
Carry Broker Arrangements |
Affiliate |
|
ADM Investor Services |
N |
|
Banco Santander (Mexico), S.A. |
N |
|
Citigroup Global Markets Asia Ltd. |
Y |
|
Citigroup Global Markets Australia Pty Limited |
Y |
|
Citigroup Global Markets Canada |
Y |
|
Citigroup Global Markets Hong Kong |
Y |
|
Citigroup Global Markets Japan Inc. |
Y |
|
Citigroup Global Markets Limited |
Y |
|
Citigroup Global Markets Singapore Securities Pte. Ltd. |
Y |
|
Citigroup Global Markets Europe AG |
Y |
|
Citigroup Global Markets Brazil CCTVM S.A. |
Y |
|
Citigroup Global Markets Korea Securities Ltd. |
Y |
Permitted Depositories and Counterparties
FCM’s policies and procedures concerning the choice of bank depositories, custodians and counterparties to permitted transactions under § 1.25.
Citigroup’s Global Network Management Team is responsible for establishing, monitoring, and reviewing policy and procedures concerning the choice and ongoing maintenance of banks, depositories and custodians that operate under Rule 1.25. The process for choosing a provider involves a formal RFP to ensure the appropriate levels of service, control, and financial stability are satisfied. Annual diligence reviews are conducted to ensure compliance with regulatory requirements.
Disclosure Statement Regarding Separate Accounts
CGMI permits certain customers to establish and maintain separate accounts with the FCM. Such separate accounts may be: (i) managed by different asset management firms, introducing brokers or associated persons; (ii) managed as separate investment portfolios by the same asset management firm, introducing broker or associated person; (iii) subject to liens in connection with operating loans that contractually obligate an FCM to treat the accounts separately; or (iv) otherwise required for regulatory or appropriate business purposes. Subject to the terms and conditions of CFTC Letter No. 19-17, CGMI treats such separate accounts as accounts of separate entities. Among other things, CGMI may calculate the margin requirements for each separate account independently from all other separate accounts of the same customer and may disburse excess funds from one separate account notwithstanding that another separate account is undermargined. However, under certain conditions an FCM may, or may be required to, margin such accounts as a single account and would not be able to disburse excess funds from one separate account if another separate account is undermargined.
Among other terms and conditions set out in CFTC Letter No. 19-17, CGMI is required to advise its customers that are permitted to maintain separate accounts that, in the unlikely event of CGMI’s bankruptcy, the customer will be treated no differently from other customers, as a result of having maintained separate accounts with the FCM. In particular, all separate accounts maintained for or on behalf of any such customer will be combined in determining such customer’s rights and obligations under the applicable provisions of the U.S. Bankruptcy Code and Part 190 of the Commodity Futures Trading Commission’s Regulations.
Material Risks
The material risks, accompanied by an explanation of how such risks may be material to its customers, of entrusting funds to FCM, including, without limitation:Principal Liabilities(Ref. 6.3). Total liabilities for CGMI were approximately $460 billion as of February 2024. CGMI primarily funds itself through secured financing transactions ($305 billion or approximately 66% of total liabilities as of February 2024). Secured financing transactions (securities loaned or sold under agreements to repurchase, or repos) is conducted to facilitate customer matched-book activity and to efficiently fund a portion of the trading inventory. Generally, changes in the level of secured financing are primarily due to fluctuations in trading inventory and in the finance desk matched book.
CGMI also funds itself through short-term and long-term borrowings, which totaled approximately $9.5 billion and $36.0 billion, respectively, as of February 2024. The long-term borrowings are primarily with affiliates, which totaled approximately $35.6 billion as of February 2024. The short term and long-term borrowings needs of CGMI are based on changes in the overall size and composition of the balance sheet as well as maintaining sufficient liquidity to meet contingent stress outflows. The overall composition of liquidity reserves held on CGMI, which are held in the form of highly liquid Class A securities, and cash held on affiliates, can also influence the amount of short term and long term borrowings. Included in long-term borrowings as of February 2024 were $15.9 billion of subordinated debt with affiliates that qualifies as capital for Regulatory purposes.
CGMI also has liabilities to customers of approximately $50.8 billion as of February 2024. The Company is subject to customer protection segregation requirements under securities laws and regulations, including those of the SEC and CFTC, whereby assets are segregated or held in separate accounts under Rule 15c3-3 of the SEC or the Commodity Exchange Act for the exclusive benefit of customers.
Material Complaints or Actions
Customer Funds Segregation.
A basic overview of customer fund segregation, FCM management and investments, FCMs and joint FCM/broker dealers.Customer Accounts. FCMs may maintain up to three different types of accounts for customers, depending on the products a customer trades:
The requirement to maintain these separate accounts reflects the different risks posed by the different products. Cash, securities and other collateral (collectively, Customer Funds) required to be held in one type of account, e.g., the Customer Segregated Account, may not be commingled with funds required to be held in another type of account, e.g., the 30.7 Account, except as the Commission may permit by order. For example, the Commission has issued orders authorizing ICE Clear Europe Limited, which is registered with the Commission as a DCO, and its FCM clearing members: (i) to hold in Cleared Swaps Customer Accounts Customer Funds used to margin both (a) Cleared Swaps and (b) foreign futures and foreign options traded on ICE Futures Europe, and to provide for portfolio margining of such Cleared Swaps and foreign futures and foreign options; and (ii) to hold in Customer Segregated Accounts Customer Funds used to margin both (c) futures and options on futures traded on ICE Futures US and (d) foreign futures and foreign options traded on ICE Futures Europe, and to provide for portfolio margining of such transactions.
Customer Segregated Account. Funds that customers deposit with an FCM, or that are otherwise required to be held for the benefit of customers, to margin futures and options on futures contracts traded on futures exchanges located in the US, i.e., designated contract markets, are held in a Customer Segregated Account in accordance with section 4d(a)(2) of the Commodity Exchange Act and Commission Rule 1.20. Customer Segregated Funds held in the Customer Segregated Account may not be used to meet the obligations of the FCM or any other person, including another customer.
All Customer Segregated Funds may be commingled in a single account, i.e., a customer omnibus account, and held with: (i) a bank or trust company located in the US; (ii) a bank or trust company located outside of the US that has in excess of $1 billion of regulatory capital; (iii) an FCM; or (iv) a DCO. Such commingled account must be properly titled to make clear that the funds belong to, and are being held for the benefit of, the FCM’s customers. Unless a customer provides instructions to the contrary, an FCM may hold Customer Segregated Funds only: (i) in the US; (ii) in a money center country1; or (iii) in the country of origin of the currency.
An FCM must hold sufficient US dollars in the US to meet all US dollar obligations and sufficient funds in each other currency to meet obligations in such currency. Notwithstanding the foregoing, assets denominated in a currency may be held to meet obligations denominated in another currency (other than the US dollar) as follows: (i) US dollars may be held in the US or in money center countries to meet obligations denominated in any other currency; and (ii) funds in money center currencies2; may be held in the US or in money center countries to meet obligations denominated in currencies other than the US dollar.
30.7 Account. Funds that 30.7 Customers deposit with an FCM, or that are otherwise required to be held for the benefit of customers, to margin futures and options on futures contracts traded on foreign boards of trade, i.e., 30.7 Customer Funds, and sometimes referred to as the foreign futures and foreign options secured amount, are held in a 30.7 Account in accordance with Commission Rule 30.7.
Funds required to be held in the 30.7 Account for or on behalf of 30.7 Customers may be commingled in an omnibus account and held with: (i) a bank or trust company located in the US; (ii) a bank or trust company located outside the US that has in excess of $1 billion in regulatory capital; (iii) an FCM; (iv) a DCO; (v) the clearing organization of any foreign board of trade; (vi) a foreign broker; or (vii) such clearing organization’s or foreign broker’s designated depositories. Such commingled account must be properly titled to make clear that the funds belong to, and are being held for the benefit of, the FCM’s 30.7 Customers. As explained below, Commission Rule 30.7 restricts the amount of such funds that may be held outside of the US.
Customers trading on foreign markets assume additional risks. Laws or regulations will vary depending on the foreign jurisdiction in which the transaction occurs, and funds held in a 30.7 Account outside of the US may not receive the same level of protection as Customer Segregated Funds. If the foreign broker carrying 30.7 Customer positions fails, the broker will be liquidated in accordance with the laws of the jurisdiction in which it is organized, which laws may differ significantly from the US Bankruptcy Code. Return of 30.7 Customer Funds to the US will be delayed and likely will be subject to the costs of administration of the failed foreign broker in accordance with the law of the applicable jurisdiction, as well as possible other intervening foreign brokers, if multiple foreign brokers were used to process the US customers’ transactions on foreign markets.
If the foreign broker does not fail but the 30.7 Customers’ US FCM fails, the foreign broker may want to assure that appropriate authorization has been obtained before returning the 30.7 Customer Funds to the FCM’s trustee, which may delay their return. If both the foreign broker and the US FCM were to fail, potential differences between the trustee for the US FCM and the administrator for the foreign broker, each with independent fiduciary obligations under applicable law, may result in significant delays and additional administrative expenses. Use of other intervening foreign brokers by the US FCM to process the trades of 30.7 Customers on foreign markets may cause additional delays and administrative expenses.
To reduce the potential risk to 30.7 Customer Funds held outside of the US, Commission Rule 30.7 generally provides that an FCM may not deposit or hold 30.7 Customer Funds in permitted accounts outside of the US except as necessary to meet margin requirements, including prefunding margin requirements, established by rule, regulation, or order of the relevant foreign boards of trade or foreign clearing organizations, or to meet margin calls issued by foreign brokers carrying the 30.7 Customers’ positions. The rule further provides, however, that, in order to avoid the daily transfer of funds from accounts in the US, an FCM may maintain in accounts located outside of the US an additional amount of up to 20 percent of the total amount of funds necessary to meet margin and prefunding margin requirements to avoid daily transfers of funds.
Cleared Swaps Customer Account. Funds deposited with an FCM, or otherwise required to be held for the benefit of customers, to margin swaps cleared through a registered DCO, i.e., Cleared Swaps Customer Collateral, are held in a Cleared Swaps Customer Account in accordance with the provisions of section 4d(f) of the Act and Part 22 of the Commission’s rules. Cleared Swaps Customer Accounts are sometimes referred to as LSOC Accounts. LSOC is an acronym for “legally separated, operationally commingled.” Funds required to be held in a Cleared Swaps Customer Account may be commingled in an omnibus account and held with: (i) a bank or trust company located in the US; (ii) a bank or trust company located outside of the US that has in excess of $1 billion of regulatory capital; (iii) a DCO; or (iv) another FCM. Such commingled account must be properly titled to make clear that the funds belong to, and are being held for the benefit of, the FCM’s Cleared Swaps Customers.
Investment of Customer Funds. Section 4d(a)(2) of the Act authorizes FCMs to invest Customer Segregated Funds in obligations of the United States, in general obligations of any State or of any political subdivision thereof, and in obligations fully guaranteed as to principal and interest by the United States. Section 4d(f) authorizes FCMs to invest Cleared Swaps Customer Collateral in similar instruments.
Commission Rule 1.25 authorizes FCMs to invest Customer Segregated Funds, Cleared Swaps Customer Collateral and 30.7 Customer Funds in instruments of a similar nature. Commission rules further provide that the FCM may retain all gains earned and is responsible for investment losses incurred in connection with the investment of Customer Funds. However, the FCM and customer may agree that the FCM will pay the customer interest on the funds deposited.
Permitted investments include:
The duration of the securities in which an FCM invests Customer Funds cannot exceed, on average, two years.
An FCM may also engage in repurchase and reverse repurchase transactions with non-affiliated registered broker-dealers, provided such transactions are made on a delivery versus payment basis and involve only permitted investments. All funds or securities received in repurchase and reverse repurchase transactions with Customer Funds must be held in the appropriate Customer Account, i.e., Customer Segregated Account, 30.7 Account or Cleared Swaps Customer Account. Further, in accordance with the provisions of Commission Rule 1.25, all such funds or collateral must be received in the appropriate Customer Account on a delivery versus payment basis in immediately available funds.4
No SIPC Protection. Although CGMI is a registered broker-dealer, it is important to understand that the funds you deposit with CGMI for trading futures and options on futures contracts on either US or foreign markets or cleared swaps are not protected by the Securities Investor Protection Corporation.
Further, Commission rules require CGMI to hold funds deposited to margin futures and options on futures contracts traded on US designated contract markets in Customer Segregated Accounts. Similarly, CGMI must hold funds deposited to margin cleared swaps and futures and options on futures contracts traded on foreign boards of trade in a Cleared Swaps Customer Account or a 30.7 Account, respectively. In computing its Customer Funds requirements under relevant Commission rules, CGMI may only consider those Customer Funds actually held in the applicable Customer Accounts and may not apply free funds in an account under identical ownership but of a different classification or account type (e.g., securities, Customer Segregated, 30.7) to an account's margin deficiency. In order to be used for margin purposes, the funds must actually transfer to the identically-owned under margined account.
For additional information on the protection of customer funds, please see the Futures Industry Association’s “Protection of Customer Funds Frequently Asked Questions” located at https://www.fiadocumentation.org/fia/regulatory-guidance_1/protection-of-customer-funds-faq_2.
Filing a Complaint
Information on how a customer may obtain information regarding filing a complaint about FCM with the Commission or with FCM’s DSRO.A customer that wishes to file a complaint about CGMI or one of its employees with the Commission can contact the Division of Enforcement either electronically at https://forms.cftc.gov/fp/complaintform.aspx or by calling the Division of Enforcement toll-free at 866-FON-CFTC (866-366-2382).
A customer that may file a complaint about the CGMI or one of its employees with the National Futures Association electronically at http://www.nfa.futures.org/basicnet/Complaint.aspx or by calling NFA directly at 800-621-3570.
A customer that wishes to file a complaint about the CGMI or one of its employees with the Chicago Mercantile Exchange electronically at: http://www.cmegroup.com/market-regulation/file-complaint.html or by calling the CME at 312.341.3286.
Relevant Financial Data
CGMI's annual audited financial statement can be found here. (Ref 10.1)As a registered Futures Commission Merchant (FCM), CGMI has an established risk management program (RMP) consistent with Dodd-Frank regulatory requirements to monitor and manage risks associated with the FCM’s activities. The RMP includes written policies and procedures which is defined by a risk management function which is independent of the FCM’s business unit, as well as by senior management governance charged with oversight of the RMP. Elements of the RMP include, but are not limited to, identification of risks, establishing risk tolerance limits, risk reporting, compliance with margin and capital requirements and ongoing monitoring and compliance of the RMP. Risk management aspects covered in the RMP include identifying, measuring and monitoring credit, market and operational risks across CGMI’s business activities including, but not limited to, FCM activities.
The RMP policy also requires business units to have established in-business procedures consistent with regulatory and industry standards for business conduct including, but not limited to, safeguarding of money, securities or other property deposited by customers with an FCM.
The FCM is also subject to oversight by the FCM’s Governing Body. The Governing Body oversees activities of the FCM including but not limited to business activities of the FCM. The Governing Body convenes quarterly and reviews, amongst other business, risk exposure reporting as well as FCM’s risk tolerance limits.
This Disclosure Document was first used on July 12, 2014.