NOTICE OF DISCIPLINARY ACTION

MEMBER:

Natixis

CBOT RULE VIOLATIONS:

Rule 432 (“General Offenses”) (in part)

It shall be an offense:

Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

FINDINGS:

Pursuant to an offer of settlement in which Natixis, acting through its New York branch, neither admitted nor denied the rule violations upon which the penalty is based, on October 25, 2016, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that it had jurisdiction over Natixis pursuant to Rules 400 and 402 as the conduct occurred while Natixis was a CBOT member. The Panel further found that on April 28, 2015, an automated trading system deployed by Natixis in numerous Federal Funds Futures markets entered one-lot orders and modifications at progressively increasing bid and offer prices in 29 contract months during the evening pre-open period, resulting in the dissemination of aberrant prices. When the relevant markets resumed trading at 5:00 PM, some of the buy orders traded, resulting in two velocity logic events and trades at anomalous prices in several of the relevant contract markets. This order-entry occurred following Natixis’s and its employee’s failure to deactivate a pricing tool that was not designed to operate after the close of regular trading hours, and at the time was configured to require manual shutoff.

The Panel concluded that Natixis thereby violated CBOT Rules 432.Q and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered Natixis to pay a fine of $75,000.

EFFECTIVE DATE:

October 27, 2016