NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

National Bank of Canada

EXCHANGE RULES: Rule 432. GENERAL OFFENSES

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

Rule 534. – Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition of wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement that National Bank of Canada (“NBC”) presented at a hearing on March 29, 2017, in which NBC neither admitted nor denied the findings or rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that between December 17, 2014 and January 21, 2015, two NBC traders executed a series of trades in NYMEX Crude Oil Futures between two accounts wholly owned and controlled by NBC. The Panel further found that NBC failed to diligently supervise its traders in a manner sufficient to ensure that they executed the trades in compliance with Exchange rules.

The Panel found that as a result of the foregoing, NBC violated NYMEX Rules 432.W and 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered NBC to pay a fine to the Exchange in the amount of $75,000.