NOTICE OF DISCIPLINARY ACTION

MEMBER:                   

Maven Europe Ltd.

CME RULE VIOLATIONS:             

Rule 575.D. Disruptive Practices Prohibited

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.

MARKET REGULATION ADVISORY NOTICE DISRUPTIVE PRACTICES PROHIBITED RULE 575 RA1904-5 (IN PART):

Q22: Is the creation or execution of User Defined Spreads (“UDS”) for the purposes of deceiving or disadvantaging other market participants a violation of Rule 575?

A22: Yes. Although the CME Globex system provides certain protections such as reasonability checks with respect to option deltas and the futures price on covered instruments, the UDS functionality requires users to exercise diligence and care in the creation of option spread instruments, including the creation of covered option strategies. Market participants are reminded that knowingly creating and/or trading UDS instruments in a manner intended to deceive or unfairly disadvantage other market participants is considered a violation of Rule 575.

Rule 432. General Offenses

W. for any party to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

FINDINGS:                    

Pursuant to an offer of settlement in which Maven Europe Ltd. neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on October 19, 2021, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that between August 7, 2019, and November 22, 2019, Maven created and executed trades in covered User Defined Spreads (“UDS”) in the September 2019 and December 2019 E-mini S&P 500 options on futures contracts on the Globex electronic trading platform to receive advantageous over-allocations or under-allocations of futures contracts associated with the covered options instrument. Additionally, the Panel found that Maven failed to diligently supervise its traders by not properly advising and training them as to Exchange rules pertaining to disruptive trade practices and UDS instruments.

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

PENALTY:                   

In accordance with the settlement offer, the Panel ordered Maven to pay a fine in the amount of $125,000 in connection with this case and companion case NYMEX 19-1253 ($62,500 of which is allocated to CME).

EFFECTIVE DATE:                         

October 21, 2021