CITIGROUP GLOBAL MARKETS, INC.
CBOT RULE VIOLATIONS:
Rule 526.F. BLOCK TRADES (in part)
Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, he broker handling the block trade, must ensure that each block trade is reported to the Exchange within five minutes of the time of execution; except that block trades in interest rate futures and options executed outside of Regular Trading Hours (7:00 a.m. – 4:00 p.m. Central Time, Monday – Friday on regular business days) must be reported within fifteen minutes of the time of execution. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
Rule 536. RECORDKEEPING REQUIREMENTS FOR PIT, GLOBEX, AND NEGOTIATED TRADES (in part)
A.1. Customer Orders
At the time of execution, every order received from a customer must be in the form of a written or electronic record and include an electronic timestamp reflecting the date and time such order was received on the floor of the Exchange and, except as provided in Section C, must identify the specific account(s) for which the order was placed. Such record shall also include an electronic timestamp reflecting the date and time such order was modified, returned, confirmed or cancelled.
Market Regulation Advisory Notice RA1203-3 Block Trades
5. Block Trade Price Reporting Requirements
b) Reporting Obligation (in part)
The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action.
Pursuant to an offer of settlement in which Citigroup Global Markets, Inc. (“Citi”) neither admitted nor denied the rule violations upon which the penalty is based, on November 18, 2014, a Panel of the CBOT Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over Citi pursuant to CBOT Rules 400 and 402 as the conduct occurred while Citi was a CBOT member. The Panel also found that during the time period from November 2009 through August 2013, Citi, through its employees, executed multiple block trades in various CBOT interest rate futures contracts that were not reported to the Exchange within the applicable time limit following execution. The Panel concluded that Citi thereby violated CBOT Rule 526.F.
Additionally, the Panel found that during the same timeframe, Citi, through its employees, reported to the Exchange inaccurate execution times of block trades and failed to maintain accurate written or electronic records with respect to block trade executions. The Panel concluded that Citi thereby violated CBOT Rule 536.A.
In accordance with the settlement offer, the Panel fined Citi $100,000.
November 20, 2014
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