NOTICE OF DISCIPLINARY ACTION

MEMBER:                   

BlackRock Inc.

CBOT RULE VIOLATION:                

Rule 562 (“Position Limit Violations”) (in relevant part)

Any positions, including positions established intraday, in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.

FINDINGS:                 

Pursuant to an offer of settlement in which BlackRock Inc. neither admitted nor denied the rule violation upon which the penalty is based, on July 26, 2021, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“Panel”) found that On November 12, 2019, and November 13, 2019, BlackRock-managed accounts held an all months combined CBOT Soybean Meal position that exceeded the all months position limit on an end of day and intraday basis. Specifically, BlackRock-managed accounts held an aggregate position of 6,919 contracts long on November 12, and 6,920 contracts long on November 13, 2019. This exceeded the all months combined position limit for Soybean Meal by 419 contracts, or 6.45%, on November 12, and by 420 contracts, or 6.46%, on November 13. BlackRock recognized the overage on November 13, and attempted to reduce its position via an Exchange for Risk (“EFR”) transaction, but was unable to execute the trade on that day. However, on the morning of November 14, 2019, BlackRock executed the EFR and brought the accounts’ positions into compliance, which resulted in a total monetary benefit of $99,605.60 to the accounts.

The Panel concluded that BlackRock thereby violated CBOT Rule 562.

PENALTY:                   

In accordance with the settlement offer, the Panel ordered BlackRock to pay a fine in the amount of $20,000 and ordered disgorgement in the amount of $99,605.60.

EFFECTIVE DATE:                         

July 28, 2021