NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

QIU ZHI HAI

NYMEX RULES:

RULE 432.G. GENERAL OFFENSES (IN PART)

It shall be an offense to prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.

RULE 432.L.1. GENERAL OFFENSES

It shall be an offense to fail to appear before the Board, Exchange staff or any investigative or hearing committee at a duly convened hearing, scheduled staff interview or in connection with any investigation.

RULE 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS (IN PART)

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.

FINDINGS:

On December 12, 2019, a Panel of the New York Mercantile Exchange (“NYMEX”) Probable Cause Committee charged Qiu Zhi Hai (“Qiu”) with violating NYMEX Rules 432.G., 432.L.1., and 576 based on allegations that, on more than one occasion, between April 30, 2018 and May 2, 2018, Qiu prearranged the execution of round-turn transactions in the DEC18 Palladium futures market between an account owned by Qiu and accounts owned by other individuals for the purpose of transferring funds between these accounts. Further, Qiu failed to appear before Exchange staff for a scheduled interview, as well as permitted the entry by an individual using a user ID other than the individual’s own unique user ID.

On September 23, 2020, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) entered an order finding that Qiu failed to answer the charges against him. The Hearing Panel Chair further ordered that Qiu was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charges.

On September 23, 2020, a penalty hearing was held before a panel of the NYMEX BCC (“BCC Panel”) which found that Qiu had committed the violations charged.

PENALTY:

In accordance with Exchange Rule 402.B (Sanctions), the BCC Panel ordered Qiu to pay a monetary fine in the amount of $60,000 and to be permanently banned 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.