VERMILLION ASSET MANAGEMENT, LLC
NYMEX RULE VIOLATION:
562. POSITION LIMIT VIOLATIONS
Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
Pursuant to an offer of settlement Vermillion Asset Management, LLC (“Vermillion”) presented at a hearing on February 5, 2014, in which Vermillion neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC”) found that Vermillion was subject to Exchange jurisdiction pursuant to NYMEX Rule 418 and that on March 22, 2013, Vermillion held an April 2013 Henry Hub Natural Gas Futures (“APRIL13 Physical”) intraday position that violated the Conditional Limit in April 2013 Henry Hub Natural Gas Look-Alike Last Day Financial Futures (“APRIL13 Financial”). The 1,000 lot standard limit for APRIL13 Financial was in effect on trade dates March 22, 2013, March 25, 2013 and March 26, 2013. After qualifying for the Conditional Limit that allowed it to hold up to 5,000 APRIL13 Financial contracts during the last three days of the contract’s trading provided that the firm did not hold any APRIL13 Physical contracts during the last three trading days, Vermillion held a position of 1,465 short APRIL13 Financial contracts and shortly after bought 35 contracts of APRIL13 Physical, thereby violating the Conditional Limit.
The Panel found that as a result, Vermillion violated Rule 562.
In accordance with the settlement offer, the Panel ordered Vermillion to pay a fine to the Exchange in the amount of $45,000.
February 7, 2014
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