NOTICE OF DISCIPLINARY ACTION

MEMBER:

GAM International Management Limited

CBOT RULE VIOLATION[S]:

Rule 538. Exchange for Related Positions (in part)

Rule 538.C. Related Position

The related position component of an EFRP must be the cash commodity underlying the Exchange contract or a by-product, a related product or an OTC derivative instrument of such commodity that has a reasonable degree of price correlation to the commodity underlying the Exchange contract. The related position component of an EFRP may not be a futures contract or an option on a futures contract.

Each EFRP requires a bona fide transfer of ownership of the underlying asset between the parties or a bona fide, legally binding contract between the parties consistent with relevant market conventions for the particular related position transaction.

The execution of an EFRP transaction may not be contingent upon the execution of another EFRP or related position transaction between the parties where the transactions result in the offset of the related position without the incurrence of market risk that is material in the context of the related position transactions.

538.E. Quantity Equivalence

The quantity of the related position component of the EFRP must be approximately equivalent to the quantity of the Exchange component of the EFRP. Appropriate hedge ratios between the Exchange and related position components of the EFRP may be used to establish equivalency.

FINDINGS:

Pursuant to an offer of settlement in which GAM International Management Limited (“GAM”) neither admitted nor denied the rule violation upon which the penalty is based, on May 10, 2017, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“BCC” or “Panel”) found that on October 26, 2015, GAM executed two Exchange for Related Position (“EFRP”) transactions in the 10-Year U.S. Treasury Note futures market that were contingent upon each other for the purpose of offsetting the related position without the incurrence of material market risk. These transactions were transitory in nature. Additionally, the Panel found that the quantity of the related position was not approximately equivalent to the quantity of the Exchange component of the EFRP. The Panel thus concluded that GAM thereby violated CBOT Rules 538.C. and 538.E.

PENALTY:

In accordance with the settlement offer, the Panel ordered GAM to pay a fine of $25,000.

EFFECTIVE DATE:

May 12, 2017