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      • NYMEX 18-0960-BC-1
      • Effective Date
      • 30 January 2020




      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.


      E. Negotiated Trades At the time of execution, every order received from a customer for execution pursuant to Rule 526 (“Block Trades”) and Rule 538 (“Exchange for Related Positions”) must be in the form of a written or electronic record and include an electronic timestamp reflecting the date and time such order was received and must identify the specific account(s) for which the order was placed. Such record shall also include an electronic timestamp reflecting the date and time such order was modified, returned, confirmed or cancelled.


      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.


      8. 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, not the time at which the trade is reported by the parties to their respective firms.

      9. Block Trade Recordkeeping

      Complete order records for block trades must be created and maintained pursuant to Rule 536 and CFTC Regulations. Additionally, the time of execution of the block trade must also be recorded for all block trades.

      12. Use of Nonpublic Information Regarding Block Trades

      Parties involved in the solicitation or negotiation of a block trade may not disclose the details of those communications to any other party for any purpose other than to facilitate the execution of the block trade. Parties privy to nonpublic information regarding a consummated block trade may not disclose such information to any other party prior to the public report of the block trade by the Exchange. A broker negotiating a block trade on behalf of a customer may disclose the identity of the customer to potential counterparties, including the counterparty with which the block trade is consummated, only with the permission of the customer.


      Pursuant to an offer of settlement that GFI Brokers Limited (“GFI Brokers”) presented at a hearing on January 28, 2020, in which GFI Brokers neither admitted nor denied 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 November 1, 2017 through April 10, 2018, GFI Brokers submitted multiple block trades in various Coal futures and options contracts to the Exchange with inaccurate execution times and also failed to report block trades to the Exchange within the required time period following execution. GFI Brokers also failed to maintain complete written or electronic records of all such transactions consummated via its brokers.

      The Panel found that during the course of brokering these block trades, GFI Brokers disclosed counterparty information without the permission of the counterparties on multiple occasions.

      The Panel further found that in relation to its staff involved in the brokering of block trades, GFI Brokers did not sufficiently advise and train such staff as to relevant Exchange rules and Market Regulation Advisory Notices (“MRANs”) in order to ensure compliance with Exchange block trade reporting requirements.

      The Panel found that as a result of the foregoing, GFI Brokers violated NYMEX Rules 526.F (“Block Trades”), 536.E. (“Negotiated Trades”) and 432.W. (“General Offenses – Failure to Supervise”).


      In accordance with the settlement offer, the Panel ordered GFI Brokers to pay a fine to the Exchange in the amount of $70,000 in connection with this case and companion case COMEX 18-0960-BC ($50,000 of which is allocated to NYMEX).