EXCHANGE RULE: 443. POSITION LIMIT VIOLATIONS
The Market Regulation Department and the BCC shall have the authority to enforce the position limit rules of the Exchange. For purposes of this rule, any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. Additionally, any person making a bid or offer that would, if accepted, cause such person to exceed the applicable position limits shall be in violation of this rule….
Pursuant to an offer of settlement in which Macquarie Inc. (“Macquarie”) neither admitted nor denied the findings, the Business Conduct Committee of the New York Mercantile Exchange, Inc. (“BCC Panel”) finds that on November 20, 2009, Macquarie maintained a December 2009 Natural Gas futures (“NG”) position 1,008 contracts (100.8%) in excess of the applicable speculative position limit; and upon notice of this speculative limit violation, Macquarie entered orders and executed trades to reverse its NG contract overage throughout the trading day. Macquarie’s reversal of the firm’s NG contract overage resulted in profits of $259,470. The Panel found that in so doing Macquarie Inc. violated Rule 443. On September 21, 2010, Macquarie presented a settlement offer to the BCC Panel that was supported by the Market Regulation Department, with respect to violations of Exchange Rules. The BCC Panel accepted the settlement offer.
In accordance with the settlement offer and its findings, the BCC Panel hereby orders that Macquarie: (1) pay a fine to the Exchange in the amount of $30,000; (2) pay disgorgement to the Exchange in the amount of $259,470; and (3) cease and desist from subsequent similar rule violations. This decision became final on September 21, 2010 and effective on September 23, 2010.
September 23, 2010