NOTICE OF SUMMARY ACTION

FILE NO.:                          

COMP-19-3506

MEMBER FIRM:                                   

J. Aron & Co.

CBOT RULE VIOLATION:          

526.F. BLOCK TRADES

Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.

SECTION 7C OF MARKET REGULATION ADVISORY NOTICE RA1906-5 (in part)

When reporting a block trade to the CME ClearPort Facilitation Desk, the following information will be required:

• Contract, contract month and contract year for futures, and, additionally for options, strike price and put or call designation for standard options, as well as the expiration date and exercise style for flex options;
• Quantity of the trade or, for spreads and combinations, the quantity of each leg of the trade;
• Price of the trade or, for certain spreads and combinations, the price of each leg of the trade;
• Account numbers for each side of the trade;
• Buyer’s clearing firm and seller’s clearing firm;
• Name and phone number of the party reporting the trade (for block trades reported via telephone or email);
• For block trades reported via phone or email, counterparty name and contact information must also be provided for trade verification purposes; and
• Execution time (to the nearest minute in Central/Eastern Time) of the trade. The execution time is the time at which the trade was consummated.

FINDINGS:                       

On one occasion in May 2019, J. Aron & Co. failed to report one or more of the required details in a timely manner to the Exchange. This block trade was executed in December 2019 Corn Options.

PENALTY:                         

On June 13, 2019, the Rule 512 designees, pursuant to Rule 512, assessed a fine in the amount of $1,000 against J. Aron & Co. for its violation of CBOT Rule 526.F. and Section 7c of MRAN RA1906-5.

EFFECTIVE DATE:

July 2, 2019