Quadra Commodities SA
CBOT RULE VIOLATIONS:
562. (“Position Limit Violations”) (in part):
Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivative, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.
Pursuant to an offer of settlement in which Quadra Commodities SA (“Quadra”) neither admitted or denied the rule violations upon which the penalty is based, on November 4, 2015, a Panel of the CBOT Business Conduct Committee (“Panel”) found that it had jurisdiction over Quadra pursuant to CBOT Rules 402 and 418. The Panel also found that on June 27, 2013, Quadra held 875 contracts long in July 2013 Soybean (“July 13 Soybean”) futures, which exceeded the spot month speculative position limit of 600 contracts by 275 contracts, or approximately 45.8%. On June 28, 2013, Quadra increased its position and held an intraday high position of 1,080 contracts, which exceeded the spot month speculative position limit by 480 contracts, or approximately 80%. On June 28, 2013, Quadra sold 1,164 contracts via three Exchange for Physical (“EFP”) transactions to bring its position back into compliance with Exchange Rules. Moreover, the Panel found that Quadra failed to ensure that proper documentation existed for two of the EFPs and, thus, the two EFP transactions were not bona fide.
The Panel concluded that Quadra thereby violated CBOT Rules 562 and 538.H.
In accordance with the settlement offer, the Panel ordered Quadra to pay a fine of $40,000.
November 6, 2015
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