• NOTICE OF SUMMARY ACTION

      • #
      • NYMEX-RSRH-17-4966
      • Effective Date
      • 01 February 2018
    • FILE NO.:

      NYMEX- RSRH-17-4966

      MEMBER FIRM:

      INTL FCSTONE FINANCIAL INC

      RULE VIOLATION:

      Set forth below are the procedures that must be followed for concurrent long and short positions and hold-open accounts.

      A. Concurrent long and short positions in the same commodity and month may be held by a clearing member at the direction of a customer or on behalf of an omnibus account; however it shall be the duty of the clearing member to ascertain whether such positions are intended for offset or to be held open prior to final transmission of position data to the Clearing House.

      B. Concurrent long and short positions in physically delivered contracts subject to spot month position limits that are held by the same owner during the time that spot month position limits are in effect must be offset by transactions executed in the market, by allowable privately negotiated transactions, or fulfilled through the normal delivery process, provided however that trades may be offset via netting, transfer or position adjustment to correct a bona fide clerical or operational error on the day the error is identified and the quantity of the offset does not represent more than two percent of the reported open interest in the affected futures contract month. Permissible Exceptions Notwithstanding the foregoing:

      1. Trades may be transferred for offset if the trade date of the position being transferred is the same as the transfer date;

      2. An account that becomes concurrently long and short as a result of a futures position that results from an option assignment will be allowed one business day to net such positions; or,

      3. Where the Chief Regulatory Officer or his designee determines, in their respective sole discretion, that permitting an offset via netting, transfer or position adjustment in excess of two percent of the reported open interest will not adversely impact either the affected market or any persons holding open positions in the affected market.

      C. Clearing members which, pursuant to this rule, carry concurrent long and short positions, must report to the Exchange both sides as open positions. When either side or both sides are reduced in accordance with Section B. of this rule, the open positions as reported to the Exchange must be reduced accordingly. Once such positions have been reduced, those positions may not subsequently be re-established as concurrent long and short positions at the Exchange.

      D. The Exchange takes no position regarding the internal bookkeeping procedures of its clearing members which, for the convenience of a customer, may "hold open" a position only on their books. However, the clearing member must accurately report to the Exchange and the Clearing House, as appropriate, large trader positions, long positions eligible for delivery and open interest.

      E. Violations of this Rule may result in summary sanctions in accordance with the provisions of Rule 512 or the matter may be referred to the Probable Cause Committee for the consideration of charges.

      FINDINGS:

      On December 27, 2017, INTL FCStone Financial Inc. offset positions in the physically delivered January 2018 NYMEX Natural Gas Henry Hub (NG) futures contract.

      PENALTY:

      On January 11, 2018, the Rule 512 Committee, pursuant to Rule 512, assessed a fine in the amount of $10,000 against INTL FCStone Financial Inc. for its violation of Rule 854.

      EFFECTIVE DATE:

      February 1, 2018