NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

BGC PARTNERS (SINGAPORE) LIMITED

EXCHANGE RULE:

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 536.E. NEGOTIATED TRADES

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.

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 RA1906-5:

Block Trade Submission Requirements to CME Clearing (Section 7 In Part)

The execution time of a block trade is the time that the parties agree to the trade. Market participants must accurately report the execution time of the block trade.

Use of Nonpublic Information Regarding Block Trades (Section 11 In Part)

A broker negotiating a block trade on behalf of a customer may disclose the identity of a customer to potential counterparties, including the counterparty with which the block trade is consummated, only with permission of the customer.

FINDINGS:

Pursuant to an offer of settlement that BGC Partners (Singapore) Limited (“BGC”) presented at a hearing on July 16, 2020, in which BGC 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 June 1, 2019 through June 30, 2019, BGC submitted multiple block trades in Crude Oil, Refined Products and Petrochemicals futures contracts to the Exchange with inaccurate execution times and did not report block trades to the Exchange within the required time period following execution. BGC also did not maintain complete written or electronic records of such transactions consummated via its brokers.

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

The Panel further found that BGC 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, BGC violated NYMEX Rules 526.F (“Block Trades”), 536.E. (“Negotiated Trades”) and 432.W. (“General Offenses – Failure to Supervise”).

PENALTY:

In accordance with the settlement offer, the Panel ordered BGC to pay a fine to the Exchange in the amount of $60,000.