NOTICE OF DISCIPLINARY ACTION

FILE NO.:

19-1163-BC

NON- MEMBER:

AXA Bank Belgium SA

CME RULE VIOLATIONS:

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;

Rule 534 Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales).

FINDINGS:

Pursuant to an offer of settlement in which AXA Bank Belgium SA (“AXA Bank”) neither admitted nor denied the rule violations upon which the penalty is based, on April 20, 2020, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that on quarterly rollovers between March 1, 2018, and June 30, 2019, AXA Bank, through two of its employee traders, entered buy and sell orders in Euro-Yen futures spreads on Globex for accounts with common beneficial ownership. AXA Bank bought and sold these spreads for these accounts when it reasonably should have known that certain of these futures trades would produce a wash result. The purpose of the trades was to manage an affiliate’s risk by rolling positions held in three separate accounts owned by the affiliate’s subsidiaries. The Panel also found that AXA Bank did not provide the employee traders with adequate training and did not diligently supervise them in a manner sufficient to ensure that their conduct was consistent with Exchange Rules.

The Panel concluded that AXA Bank thereby violated CME Rules 432.W. and 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered AXA Bank to pay a fine of $35,000.00.

EFFECTIVE DATE:

April 22, 2020