NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

ICAP ENERGY LIMITED

NYMEX RULES:

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 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.

MARKET REGULATION ADVISORY NOTICE RA1705-5, SECTION 12

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.

FINDINGS:

Pursuant to an offer of settlement that ICAP Energy Limited (“ICAP”) presented at a hearing on June 18, 2020, in which ICAP neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that between November 2017 and January 2018, as well as between May 2018 and May 2019, ICAP executed numerous block trades for customers in various NYMEX Energy futures contracts that ICAP failed to report to the Exchange within the required time period following execution, as well as failed to report accurate trade details for these block trades to the Exchange. The Panel further found that, on multiple occasions between November 2017 and January 2018, as well as between May 2018 and May 2019, while negotiating a block trade, brokers employed by ICAP disclosed the identity of potential and actual counterparties. The Panel also found that, during these time frames, ICAP failed to properly advise its employees as to relevant Exchange rules and Market Regulatory Advisory Notices (“MRANs”), as well as failed to supervise the execution of block trades by its employees to enable brokers to comply with Exchange block trade reporting requirements.

The Panel concluded that ICAP violated Exchange Rules 432.W. (General Offenses – Failure to Supervise), 526.F. (“Block Trades”), and MRAN RA1705-5 (“Use of Nonpublic Information Regarding Block Trades”).

PENALTY:

In accordance with the settlement offer, the Panel ordered ICAP to pay a fine to the Exchange in the amount of $100,000.