Morgan Stanley Capital Group, Inc.
NYMEX RULE VIOLATIONS: Rule 526. Block Trades (in part)
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 five minutes of the time of execution in the following futures products: Brent Crude Financial, Brent Crude Oil Last Day Financial, Light Sweet Crude Oil, Gulf Coast Sour Crude Oil, NY Harbor ULSD, Henry Hub Natural Gas, RBOB Gasoline, Cocoa, Coffee, Cotton, No. 11 Sugar, Gold, Silver and Copper. In all other block-eligible products, the seller must ensure that each block trade is reported to the Exchange within fifteen minutes of the time of execution.
Market Regulation Advisory Notice RA1208-4 Block Trades
6. Block Trade Price Reporting Requirements
b) Reporting Obligation (in part)
The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action.
Pursuant to an offer of settlement in which Morgan Stanley & Capital Group Inc. (“MSCGI”) neither admitted nor denied the rule violations upon which the penalty is based, on October 28, 2014 a Panel of the New York Mercantile Exchange (“NYMEX”) Business Conduct Committee found that it has jurisdiction over MSCGI because it is a NYMEX member and on three occasions between March 19, 2013, and October 22, 2013, MSCGI, through its employees, executed block trades for customers in various NYMEX contracts that were not reported to the Exchange within the applicable time limit following execution. On one occasion the block trades’ reported execution time was not accurate. In so doing, the Panel concluded that MSCGI violated NYMEX Rule 526.F.
In accordance with the settlement offer, the Panel ordered Morgan Stanley Capital Group Inc. to pay a fine of $20,000.
October 30, 2014
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