UBS Securities LLC
NYMEX RULE VIOLATION: 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. 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.
Market Regulation Advisory Notice RA1207-3 Block Trades
5. Block Trade Price Reporting Requirements (in part)
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 UBS Securities LLC (“UBS”) neither admitted nor denied the rule violations upon which the penalty is based, on December 3, 2014, a panel of the New York Mercantile Exchange (“NYMEX”) Business Conduct Committee (“BCC”) found that it had jurisdiction over UBS pursuant to Rules 400 and 402 as the conduct occurred while UBS was a NYMEX member, and that between December 5, 2012, and December 17, 2012, UBS executed block trades in Energy futures and did not report those trades to the Exchange within five minutes of the time of execution. The Panel also found that on two of these occasions UBS did not accurately report the times of block trades and misreported spread transactions to the Exchange as outright transactions. The Panel found that in so doing UBS thereby violated Rule 526.
In accordance with the settlement offer, the Panel ordered UBS Securities LLC to pay a fine of $30,000.
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