Jump Trading LLC
CME RULE VIOLATION:
Rule 432. General Offenses
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.
Pursuant to an offer of settlement in which Jump Trading LLC (“Jump”) neither admitted nor denied the rule violation upon which the penalty is based, on November 16, 2016, a Panel of the CME Business Conduct Committee (“BCC” or “Panel”) found that it had jurisdiction over Jump pursuant to CME Rules 400 and 402 as the conduct occurred while Jump was a CME member. The Panel also found that between December 2014, and January 2015, and again in April 2015, Jump engaged in a pattern of activity in which an automated trading system (“ATS”) Jump operated submitted Mass Quotes in CME’s equity options markets with incrementally widening spreads between the bid and offer prices, causing aberrant bid and offer prices in the options that were quoted to be disseminated to the market. Further, although Jump implemented a fix in January 2015 intended to mitigate the aberrant quoting, it failed to include the fix in a subsequent update to the ATS. This caused Jump’s ATS to again submit incrementally widening spreads between the bid and offer prices, also causing aberrant bid and offer prices in the quoted options disseminated to the market. The Panel concluded that this activity violated CME Rule 432.Q.
In accordance with the settlement offer the Panel ordered Jump to pay a fine of $42,500.
November 18, 2016