EC (PROPRIETARY TRADERS) PTE, LTD.
EXCHANGE RULE 575. DISRUPTIVE PRACTICES PROHIBITED (in part)
All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.
A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.
EXCHANGE 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.
EXCHANGE RULE 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
EXCHANGE RULE 433. STRICT LIABILITY FOR THE ACTS OF AGENTS
Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and notwithstanding Rule 432.W., the act, omission, or failure of any official, agent, or other person acting for any party within the scope of his employment or office shall be deemed the act, omission or failure of the party, as well as of the official, agent or other person who committed the act
On April 7, 2020, the CME Group Chief Regulatory Officer (“CRO”) charged EC (Proprietary Traders) Pte, Ltd. (“EC Prop”) with violating NYMEX Rules 432.W. and 576, based on allegations that EC Prop failed to diligently supervise its employees, in the conduct of their business related to the Exchange, specifically their disruptive trading activity from June 2016 to June 2017, and for permitting the entry of an order by an individual using a user ID other than the individual’s own unique user ID. The CRO also charged EC Prop with violating NYMEX Rule 575.A. via NYMEX Rule 433, for traders employed by EC, entering or causing to be entered an order with the intent, at the time of order entry, to cancel the order or orders before execution or to modify the order or orders to avoid execution, on one or more occasions in the Gold, Silver and Copper futures markets from June 30, 2016 to June 2, 2017.
On September 23, 2020, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) first determined that EC Prop, having failed to submit a written answer to the charges issued against it, was deemed to have admitted the charges. EC Prop, therefore, waived its right to a hearing on the merits of the charges. Pursuant to NYMEX Rule 408.F., a BCC Panel then found EC Prop guilty of committing the admitted charges and held a penalty hearing thereafter.
Based on the record and the Panel’s findings and conclusions, the Panel ordered EC Prop to pay a fine in the amount of $200,000 ($100,000 of which is allocated to COMEX) and serve a five year suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group.