• NOTICE OF DISCIPLINARY ACTION

      • #
      • COMEX 18-0972-BC
      • Effective Date
      • 16 December 2019
    • NON-MEMBER:

      SUNRISE BROKERS LLP

      EXCHANGE RULES:

      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

      It shall be an offense:

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

      CME Group RA1709-5

      Block Trade Submission Requirements to CME Clearing

      The execution time is required to be entered and must be the actual time at which the transaction was consummated by the two parties.

      FINDINGS:

      Pursuant to an offer of settlement that Sunrise Brokers LLP (“Sunrise”) presented at a hearing on December 12, 2019, in which Sunrise neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the COMEX Business Conduct Committee (“Panel”) found that during the time period of November 2017 through November 2018, Sunrise submitted multiple block trades in various Gold, Silver and Copper futures and options to the Exchange with inaccurate execution times and did not report such block trades to the Exchange within the required time period following execution.

      The Panel further found that in relation to its staff involved in such trades, Sunrise did not sufficiently advise and train its applicable staff as to relevant Exchange rules and Market Regulation Advisory Notices (“MRANs”) and did not sufficiently supervise the execution of such block trades by its staff to ensure that its staff complied with Exchange block trade reporting requirements.

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

      PENALTY:

      In accordance with the settlement offer, the Panel ordered Sunrise to pay a fine to the Exchange in the amount of $90,000.