• NOTICE OF DISCIPLINARY ACTION

      • #
      • NYMEX 18-1031-BC
      • Effective Date
      • 25 October 2019
    • NON-MEMBER:

      MCNAMARA OPTIONS LLC

      EXCHANGE RULE:

      RULE 526. – BLOCK TRADES

      The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:

      F. 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.

      RULE 432. GENERAL OFFENSES (in part)

      It shall be an offense

      W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

      CME GROUP MARKET REGULATION ADVISORY NOTICE RA1806-5:

      Block Trade Submission Requirements to CME Clearing

      Please note that the execution time of a block trade is the time that the parties agree to the trade. Market Participants must accurately report the execution time of the block trade. The reporting of inaccurate execution times may result in disciplinary action.

      FINDINGS:

      Pursuant to an offer of settlement that McNamara Options LLC (“McNamara Options”) presented at a hearing on October 23, 2019, in which McNamara Options neither admitted nor denied, the findings or conclusions or the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that during the time period of June 2018 through August 2018, McNamara Options submitted multiple block trades in the Crude Oil and Natural Gas markets to the Exchange with inaccurate execution times and also failed to report block trades to the Exchange within the required time period following execution. Additionally, the Panel found that McNamara Options failed to properly advise and train its employees as to relevant Exchange rules and Market Regulation Advisory Notices (“MRANs”) in connection with the population of the execution time on the CME Direct Platform in a manner sufficient to ensure compliance with the same.

      The Panel found that as a result of the foregoing, McNamara Options violated NYMEX Rules 526.F (“Block Trades”) and 432.W. (“General Offenses – Failure to Supervise”).

      PENALTY:

      In accordance with the settlement offer, the Panel ordered McNamara Options to pay a fine to the Exchange in the amount of $70,000.