NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 15-0302-BC

NON-MEMBER:

Vinko Sajn

CBOT RULE VIOLATION:

Rule 575. Disruptive Practices Prohibited

D. No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

Market Regulation Advisory Notice Disruptive Practices Prohibited Rule 575 RA1405-5R: (in part)

Q22: Is the creation or execution of User Defined Spreads (“UDS”) for the purposes of deceiving or disadvantaging other market participants a violation of Rule 575?

A22: Yes. Although the CME Globex system provides certain protections such as reasonability checks with respect to option deltas and the futures price on covered instruments, the UDS functionality requires users to exercise diligence and care in the creation of option spread instruments, including the creation of covered option strategies.

Market participants are reminded that knowingly creating and/or trading UDS instruments in a manner intended to deceive or unfairly disadvantage other market participants is considered a violation of Rule 575.

FINDINGS:

Pursuant to an offer of settlement in which Vinko Sajn (“Sajn”) neither admitted nor denied the rule violation upon which the penalty is based, on September 26, 2017, a Panel of the CBOT Business Conduct Committee (“BCC” or “Panel”) found that on two dates in October 2015, Sajn entered multiple orders involving User Defined Spreads (“UDS”) in covered Soybean options on the Globex electronic trading platform for the purpose of avoiding futures contracts allocations that should have been associated with the covered options instrument. Due to the price difference between the UDS futures and the outright futures, the under-allocation was favorable to Sajn. The Panel concluded that this activity violated CBOT Rule 575.D.

PENALTY:

In accordance with the settlement offer and after taking Sajn’s financial condition into consideration when it levied the sanction, the Panel ordered Sajn to pay a fine in the amount of $5,000. The Panel also suspended Sajn’s access to any CME Group Inc. trading floor and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. The suspension shall begin on September 28, 2017 and continue for 30 business days after the fine is paid in full.

EFFECTIVE DATE:

September 28, 2017