MERRILL LYNCH COMMODITIES INC.
LEGACY EXCHANGE RULE:
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 Merrill Lynch Commodities Inc. (“Merrill Lynch”) presented at hearing on April 15, 2015, in which Merrill Lynch neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that it had jurisdiction over Merrill Lynch as a NYMEX member, pursuant to Rules 400 and 402, and that on trade date December 10, 2013, Merrill Lynch entered into an EFRP transaction that did not contain adequate documentation of the related swap transaction, and therefore was not a bona fide EFRP.
The Panel found that as a result, Merrill Lynch violated Legacy Rule 538.H.
In accordance with the settlement offer, the Panel ordered Merrill Lynch to pay a fine to the Exchange in the amount of $7,500.
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