ADM INVESTOR SERVICES, INC.
COMEX RULE VIOLATIONS: (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 current 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 COMEX Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over ADMIS pursuant to COMEX Rules 400 and 402 as the conduct occurred while ADMIS was a COMEX member. The Panel also found that for trade date June 27, 2013, ADMIS submitted position adjustments to open interest in the July 2013 Copper futures contract, which resulted in the overstatement of open interest by 6.9%. The Panel concluded that ADMIS thereby violated COMEX (Legacy) Rule 854.B.
In accordance with the settlement offer, the Panel fined ADMIS $15,000.
September 25, 2014
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