• NOTICE OF DISCIPLINARY ACTION

      • #
      • CME 19-1124-BC
      • Effective Date
      • 25 September 2020
    • NON-MEMBER:          

      RSJ Securities, a.s.

      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 575. Disruptive Practices Prohibited (in part)

      D.      No person shall enter or cause to be entered an actionable or non-actionable message with intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

      FINDINGS:         

      Pursuant to an offer of settlement in which RSJ Securities, a.s. neither admitted nor denied the rule violations upon which the penalty is based, on September 23, 2020, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on numerous occasions between February 2019 and July 2019, RSJ entered orders during various pre-open sessions in the E-mini Nasdaq-100 Futures, E-mini Russell Index Futures, E-mini S&P 500 Futures, Euro FX Futures, Nikkei/Yen Futures, Australian Dollar Futures, British Pound Futures, Canadian Dollar Futures, Japanese Yen Futures, Swiss Franc Futures, New Zealand Dollar Futures, and Mexican Peso Futures with reckless disregard for the adverse impact on the orderly conduct of trading. Specifically, during this time period, an RSJ automated trading system (“ATS”) engaged in a pattern of activity wherein it entered multiple opposing orders at various price levels near the start of the pre-open, provided significant liquidity to the order book in these markets, and then subsequently cancelled all or a majority of the orders near the end of the pre-open just prior to the no-cancel period, causing impacts to the Indicative Opening Price (“IOP”) and/or fluctuations in the bid-offer spread. After first being notified of the issue by Market Regulation, RSJ modified its ATS but failed to adequately rectify the problem before redeploying the ATS in the pre-open, leading to several other instances and additional notifications by Market Regulation.

      The Panel also found that RSJ failed to diligently supervise its ATS in the conduct of its business relating to the Exchange.

      The Panel concluded that RSJ thereby violated CME Rules 432.W. and 575.D.

      PENALTY:          

      In accordance with the settlement offer, the Panel ordered RSJ to pay a fine of $85,000.

      EFFECTIVE DATE:                

      September 25, 2020