NEWEDGE USA LLC (now SG Americas Securities, LLC)
EXCHANGE RULE: 538.H. Documentation
Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivatives, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.
Pursuant to an offer of settlement Newedge USA, LLC (“Newedge”) presented at a hearing on March 26, 2015, in which Newedge neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found it has jurisdiction over Newedge pursuant to NYMEX Rules 400 and 402 as the conduct at issue occurred while Newedge was a member of the Exchange and that on March 17, 2014 Newedge employees, trading accounts for a Newedge affiliate, entered into an EFRP transaction which did not contain documentation of the related physical transaction and, therefore, was not a bona fide EFRP transaction.
The Panel found that as a result, Newedge violated Rule 538.H.
In accordance with the settlement offer, the Panel ordered Newedge to pay a fine to the Exchange in the amount of $15,000.
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