DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
Rule 432. General Offenses
It shall be an offense:
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
Rule 534. Wash Trades Prohibited
No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.
Rule 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited
539.A. General Prohibition
No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction, except in accordance with Sections B. and C. below.
539.C. Pre-Execution Communications Regarding Globex Trades
Parties may engage in pre-execution communications with regard transactions executed on the Globex platform where one party (the first party) wishes to be assured that a contra party (the second party) will take the opposite side of the order under the following circumstances:
3. In the case of futures orders, the first party’s order must be entered into the Globex platform first and the second party’s order may not be entered into the Globex platform until a period of 5 seconds has elapsed from the time of entry of the first order.
576. Identification of Globex Terminal Operators
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
Pursuant to an offer of settlement that DBS Vickers Securities (Singapore) Pte Ltd (“DBSV”) presented at a hearing on June 26, 2013, in which DBSV neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that DBSV voluntarily submitted itself to the jurisdiction of the BCC for purposes of settling this matter and that on January 10, 2012, two traders employed by DBSV prearranged trades totaling 496 lots in April 2012 RBOB Gasoline futures contracts between two proprietary accounts with common beneficial ownership. The trades were executed on Globex and the buy and sell orders were entered within one second of each other. The Panel also found that DBSV failed to ensure that the TAG 50 registration for its traders accessing the Globex system (“Globex”) was current, accurate and unique to each individual using Globex in that multiple traders entered orders using a user ID registered to a unique user. The Panel also found that DBSV failed to diligently supervise its traders in a manner sufficient to ensure that they were familiar with Exchange rules such as through appropriate compliance training.
The Panel found that as a result of the foregoing, DBSV violated Exchange Rules 432.W., 534, 539.A. and C and 576.
In accordance with the settlement offer, the Panel ordered DBSV to pay a fine to the Exchange in the amount of $30,000.
June 28, 2013