NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 17-0844-BC

NON- MEMBER:

Yongxiao Xu

CME RULE VIOLATIONS:

575. Disruptive Practices Prohibited

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

432.L.1 General Offenses

It shall be an offense for any party to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation

FINDINGS:

On August 20, 2019, a Panel of the Chicago Mercantile Exchange (“CME”) Probable Cause Committee (“PCC”) charged non-member Yongxiao Xu (“Xu”) with violating CME Rules 575.A. and 432.L.1. based on allegations that between August 17, 2017, through November 8, 2017, Xu entered orders in the CME Yen futures, British Pound futures, Euro FX futures, and New Zealand Dollar futures markets with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution. Further, Xu failed to appear before Exchange staff for a scheduled interview.

On November 11, 2019, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) entered an order finding that Xu failed to answer the charges issued against him. In failing to answer the charges, the Hearing Panel Chair further ordered that Xu was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

Pursuant to CME Rule 407.C., a penalty hearing was held before a Panel of the BCC (“Panel”) on November 25, 2019. The Panel found Xu guilty of committing the admitted charges.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Xu to pay a fine in the amount of $75,000, and to permanently bar Xu from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.

EFFECTIVE DATE:

December 13, 2019