• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME-16-0377-BC
      • Effective Date
      • 21 December 2017
    • FILE NO.:

      CME 16-0377-BC

      MEMBER:

      Volant Liquidity, LLC

      CBOT RULE VIOLATION:

      Rule 432 (“General Offenses”) (in part)

      It shall be an offense:

      Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

      W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

      FINDINGS:

      Pursuant to an offer of settlement in which Volant Liquidity, LLC (“Volant”), neither admitted nor denied the rule violations upon which the penalty is based, on December 19, 2017, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that on December 14, 2015, an automated trading system (“ATS”) deployed by Volant in the E-Mini and E-Mini NASDAQ 100 futures contract markets malfunctioned as a result of the ATS’s logic for executing hedge transactions, which had been changed by Volant. The malfunction caused sharp price movements and volume aberrations in both E- mini products. The Panel also found that although Volant disabled the ATS upon recognizing the malfunction, the firm subsequently re-deployed the ATS in the same markets after misdiagnosing the cause of the malfunction. The redeployment of the ATS resulted in a second episode of price and volume aberrations.

      The Panel concluded that Volant thereby violated CME Rules 432.Q. and 432.W.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Volant to pay a fine of $75,000.

      EFFECTIVE DATE:

      December 21, 2017