• NOTICE OF DISCIPLINARY ACTION

      • #
      • NYMEX 17-0641-BC-1
      • Effective Date
      • 10 September 2018
    • NON-MEMBER:

      ENTERPRISE PRODUCTS PARTNERS, LP

      EXCHANGE RULES:

      432.W. GENERAL OFFENSES (in part)

      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.

      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 on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

      576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS

      Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a
      person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.

      FINDINGS:

      Pursuant to an offer of settlement that Enterprise Products Partners, LP (“Enterprise Products”) presented at a hearing on September 6, 2018, in which Enterprise Products neither admitted nor denied the factual allegations or rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“BCC Panel”) found that, between March 2016 and December 2016, Enterprise Products employees entered into multiple wash trades in the Crude Oil Futures, Heating Oil Futures, Natural Gas Futures, and RBOB Futures contract markets that traded between accounts with the same beneficial owner. The BCC Panel found that Enterprise Products failed to provide instruction or guidance to its employees on Exchange rules and regulations with regard to wash trades. The BCC Panel also found that, during this time period, Enterprise Products failed to supervise the use of Tag 50s by its employees to ensure that its employees used a unique user ID to access Globex.

      The BCC Panel concluded that Enterprise Products thereby violated Exchange Rules 432.W., 534, and 576.

      PENALTY:

      In accordance with the settlement offer, the BCC Panel fined Enterprise Products $100,000.