ADM INVESTOR SERVICES, INC.
CBOT RULE VIOLATIONS:
Rule 811. POSITION CHANGE DATA
Position change data must be submitted to the Clearing House each trading day not later than the time specified by the Clearing House. When requested, the identification of accounts will be made available to the Audit Department.
(Legacy) Rule 854.B. CONCURRENT LONG AND SHORT POSITIONS (in part)
Concurrent long and short positions in physically delivered contracts that are held by the same owner during the delivery month and two business days prior to the delivery month 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 transferred for offset if the trade date of the position being transferred is the same as the transfer date. Such positions may not be offset via netting, transfer, or position adjustment except to correct a bona fide clerical or operational error on the day the error is identified and provided that the quantity of the offset does not represent more than one percent of the reported open interest in the affected futures contract month.
Pursuant to an offer of settlement in which ADM Investor Services, Inc. (“ADMIS”) neither admitted nor denied the rule violations upon which the penalty is based, on September 23, 2014, a Panel of the CBOT Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over ADMIS pursuant to CBOT Rules 400 and 402 as the conduct occurred while ADMIS was a CBOT member. The Panel also found that for trade dates July 30, 2012, and April 29, 2013, ADMIS submitted position adjustments to open interest in the August 2012 Soybean and May 2013 Soybean Oil futures contracts, which resulted in the overstatement of open interest by 2.8% and 1.78%. The Panel concluded that ADMIS thereby violated CBOT (Legacy) Rule 854.B.
The Panel further found that for trade date May 13, 2013, ADMIS reported inaccurate open interest positions in the June 2013 UREA FOB Yuzhny swap contract, which resulted in the understatement of open interest. The Panel concluded that ADMIS thereby violated CBOT Rule 811.
In accordance with the settlement offer, the Panel fined ADMIS $35,000.
September 25, 2014
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