GFI SECURITIES LLC
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 MARKET REGULATION ADVISORY NOTICE RA1705-5 (IN PART):
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.
Pursuant to an offer of settlement that GFI Securities LLC (“GFI Securities”) presented at a hearing on March 12, 2020, in which GFI Securities 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 December 1, 2017 through March 31, 2018, GFI Securities submitted multiple block trades in various Gold futures and options contracts to the Exchange with inaccurate execution times.
The Panel further found that in relation to its staff involved in the brokering of block trades, GFI Securities 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 Securities violated Exchange Rules 526.F (“Block Trades”) and 432.W. (“General Offenses – Failure to Supervise”).
In accordance with the settlement offer, the Panel ordered GFI Securities to pay a fine to the Exchange in the amount of $40,000 in connection with this case and companion case NYMEX 18-0960-BC ($20,000 of which is allocated to COMEX).