• NOTICE OF DISCIPLINARY ACTION

      • #
      • NYMEX 18-1025-BC
      • Effective Date
      • 22 April 2019
    • MEMBER:

      MERRILL LYNCH COMMODITIES INC.

      NYMEX RULE VIOLATION: 562. POSITION LIMIT VIOLATIONS

      Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.

      FINDINGS:

      Pursuant to an offer of settlement Merrill Lynch Commodities Inc. (“Merrill Lynch”) presented at a hearing on April 17, 2019, in which Merrill Lynch neither admitted nor denied the rule violation upon which the penalty is based, a Panel of the New York Mercantile Exchange Business Conduct Committee (“Panel”) found that during trade date September 24, 2018, Merrill Lynch held an October 2018 Henry Hub Natural Gas Futures (“OCT18 NG”) position which was 26% over the firm’s approved hedge exemption-eligible NG position limit. The OCT18 NG position limit went into effect at the close of business on September 21, 2018 and remained in effect for trade dates September 24, 25 and 26, 2018. Merrill Lynch has had two prior disciplinary actions for a position limit violation in the past two years.

      The Panel found that as a result, Merrill Lynch violated Rule 562.

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Merrill Lynch to pay a fine to the Exchange in the amount of $75,000.