RBC Capital Markets, LLC
CBOT RULE VIOLATION:
Rule 526 Block Trades
F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of the 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.
Pursuant to an offer of settlement in which RBC Capital Markets LLC (“RBC”) neither admitted nor denied the Rule violations upon which the penalty is based, on July 27, 2016, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that it had jurisdiction over RBC pursuant to Rules 400 and 402 as the conduct occurred while RBC was a CBOT member. The Panel also found that on January 13, 2014, RBC executed a block trade in the March 2014 5-Year Note contract that was not reported to the Exchange within the applicable time limit following execution. The Panel further found that RBC reported an inaccurate time of execution of the block trade. Moreover, the Panel found that after RBC agreed to sell to the customer at one price, RBC reported that the block trade was executed at a different, lower price to the Exchange. The Panel concluded that RBC thereby violated CBOT Rule 526.F.
In accordance with the settlement offer, the Panel ordered RBC to pay a fine of $30,000.
July 29, 2016
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