TFS Derivatives Corp.
EXCHANGE RULE: Rule 526. – BLOCK TRADES
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
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 the time period and in the manner specified by the Exchange. 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.
Pursuant to an offer of settlement that TFS Derivatives Corp. (“TFS Derivatives”) presented at a hearing on February 9, 2016, in which TFS Derivatives neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that TFS Derivatives, a non-member, is subject to the jurisdiction of the Exchange pursuant to NYMEX Rules 402 and 418. The Panel also found that during the time period from June 2013 through March 2014, TFS Derivatives executed block trades for customers in various Exchange contracts that were not reported within the required time limit following execution.
The Panel found that as a result of the foregoing, TFS Derivatives violated NYMEX Rule 526.F (“Block Trades”)
In accordance with the settlement offer, the Panel ordered TFS Derivatives to pay a fine to the Exchange in the amount of $34,000.
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