NOTICE OF DISCIPLINARY ACTION

NON‐MEMBER:

Sumitomo Mitsui Trust Bank, Limited

CBOT RULE VIOLATIONS:

CBOT Rule 432.W: General Offenses

It shall be an offense for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

CBOT 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.

FINDINGS:

Pursuant to an offer of settlement in which Sumitomo Mitsui Trust Bank, Limited (“SMTB”) neither admitted nor denied the rule violations upon which the penalty is based, on March 14, 2018, a Panel of the CBOT Business Conduct Committee (“Panel”) found that on four trade dates during February 2016, a trader for SMTB’s Tokyo branch executed numerous transactions on Globex in various CBOT Treasury futures markets where the accounts on both sides of the transactions were beneficially owned by SMTB. The purpose of these transactions was to move positions between SMTB accounts. The trader now understands that this type of transaction should be effected via a back office transfer. The Panel also found that, at the time of those transactions, SMTB had failed to diligently train and supervise its trader in a manner sufficient to ensure that his conduct was consistent with Exchange rules. Following those transactions, SMTB undertook remediation and training measures.

The Panel concluded that SMTB thereby violated CBOT Rules 432.W. and 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered SMTB to pay a fine of $105,000.