PVM FUTURES, INC.
EXCHANGE RULE 526. BLOCK TRADES
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
F. The seller must ensure that each block trade is reported to the Exchange within five 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.
EXCHANGE RULE 536. RECORDKEEPING REQUIREMENTS FOR PIT, GLOBEX, AND NEGOTIATED TRADES
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.
EXCHANGE RULE 432. GENERAL OFFENSES
It shall be an offense:
I. to make a verbal or written material misstatement to the Board, a committee, or Exchange employees;
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Pursuant to an offer of settlement that PVM Futures, Inc. (“PVM”) presented at a hearing on April 29, 2014, in which PVM neither admitted nor denied the factual allegations or rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that PVM voluntarily submitted itself to the jurisdiction of the BCC for purposes of settling this matter and that during the time period from February 2012 to January 2013, PVM executed multiple block trades for customers in various Exchange contracts that were not reported to the Exchange within the applicable time limit following execution and also misreported to the Exchange the true and accurate time of execution of multiple block trades. PVM also failed to maintain accurate written or electronic records of the block trade transactions. Specifically, the order tickets and other records PVM employed to record block trades contained inaccurate timing information and PVM did not have accurate and reliable time-keeping mechanisms in place to base the time of execution. In connection with this conduct, PVM failed to diligently supervise its employees or agents in its reporting of block trades to the Exchange.
The Panel concluded that PVM violated Exchange Rules 526.F. (“Block Trades”), 536 (“Recordkeeping Requirements for Pit, Globex, and Negotiated Trades”), 432.I. (“General Offenses – Misstatement”) and 432.W (“General Offenses—Supervision”).
In accordance with the settlement offer, the Panel ordered PVM to pay a fine to the Exchange in the amount of $20,000.
May 1, 2014
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