NOTICE OF DISCIPLINARY ACTION

MEMBER:

BELVEDERE TRADING LLC

EXCHANGE RULES: 432.W. GENERAL OFFENSES (in part)

(W) It shall be an offense for a Member to fail to diligently supervise its
employees and agents in the conduct of their business relating to the Exchange.

433. STRICT LIABILITY FOR THE ACTS OF AGENTS

Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and
notwithstanding Rule 432.W., the act, omission, or failure of any official, agent,
or other person acting for any party within the scope of his employment or
office shall be deemed the act, omission or failure of the party, as well as of the
official, agent or other person who committed the act.

RULE 575.A. DISRUPTIVE PRACTICES PROHIBITED

No person shall enter or cause to be entered an order with the intent, at the
time of order entry, to cancel the order before execution or to modify the order
to avoid execution.

FINDINGS:

Pursuant to an offer of settlement that Belvedere Trading LLC (“Belvedere”) presented at a hearing on March 14, 2018, in which Belvedere neither admitted nor denied the factual allegations or rule violations upon which the penalty is based, a Panel of the CME Business Conduct Committee (“BCC Panel”) found that, on several trade dates during the time period between September 2014 and February 2015, a trader then employed by Belvedere (the “trader”) entered multiple large orders, or layers of orders at the same price, in the E-mini S&P 500 contract market without the intent to trade, but rather, to encourage market participants to trade opposite the smaller orders entered by the trader that were resting on the opposite side of the order book. After receiving a fill on the smaller orders, the large orders were cancelled by the trader. Belvedere failed to supervise the trading activities of the trader, including in the period following notice from the Exchange.

The BCC Panel concluded that the conduct described above thereby violated Exchange Rule 432.W and, pursuant to Exchange Rule 433, Belvedere is strictly liable for the acts of an employee whose conduct the Panel concluded violated Exchange Rule 575.A.

PENALTY:

In accordance with the settlement offer, the BCC Panel fined Belvedere $130,000 and ordered Belvedere to disgorge profits in the amount of $4,947.