DCM speaks frequently about the differences between European and US enforcement regimes. Case in point is a summary judgement from ICE Futures Europe today. The circular is here. The broker got fined over $30,000.
The issue was that a customer of the broker held positions in excess of the limits for three consecutive days. The rule (Rule P.3) for ICE Futures Europe reads:
"A Member shall not carry a position that exceeds the limits on behalf of any Person unless the Member has confirmed that such Person has received an exemption from the Exchange."
In Europe is the broker cannot "carry" the position. In the US , the CME rule (Rule 562 for Violations of Position Limits) reads:
"Any positions, including positions established intraday, in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. If a position exceeds position limits as a result of an option assignment, the person who owns or controls such position shall be allowed one business day to liquidate the excess position without being considered in violation of the limits"
It references the owner, not the broker. The broker obligation in the US (same Rule 562) is:
"A clearing member carrying such positions shall not be in violation of this rule if, upon notification by the Market Regulation Department, it liquidates its pro-rata share of the position in excess of the limits or otherwise ensures the customer is in compliance with the limits within a reasonable period of time. For purposes of this rule, a reasonable period of time shall generally not exceed one business day."
The European rule places the obligation and responsibility on the Member (Broker) to not allow the position and th broker has an affirmative obilgation to confirm the customer hedge exemption.
In the US, the borker has an obligation to confirm after the fact and within a reasonable time period they have the right to hold the position. The customer, on the other hand, is in violation the minute they exceed the position. By the way, in the US, if you exceed the limit and then trade below the limit and then back above, each time yoou cross below the limit you reset and each time you cross is a new violation.
You should keep in the mind the jurisdiction you are trading in - not necessarily where you are located - for assuring you compliance program is appropriate. DM has worked with many non-US firms to assist them in aligning their global, non-US based compliance programs to the US specific regulatory regime.