NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:           

Hsin-Min Wang

CME RULE VIOLATION:                

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.

Market Regulation Advisory Notice Disruptive Practices Prohibited Rule 575 RA1903-5 (in part)

Q4: Is a market participant allowed to enter a crossed-market order during the pre-open period?

A4: Yes, there are several reasons a market participant may wish to enter a crossed-market order during the pre-open period including to secure queue position or increase the likelihood of getting filled at the market open. However, frequent modifications or cancellations of crossed-market orders may demonstrate that the market participant does not intend for the orders to be filled at the market open, which may be deemed to violate Rule 575 or other Exchange rules.

Furthermore, if the crossed-market order entries, modifications, and/or cancellations cause undue fluctuations to the IOP, the conduct may be deemed to violate Rule 575 or other Exchange rules.

FINDINGS:                    

Pursuant to an offer of settlement in which Hsin-Min Wang neither admitted nor denied the Rule violation or factual findings upon which the penalty is based, on October 26, 2021, a Panel of the Chicago Mercantile Exchange Business Conduct Committee (“Panel”) found that between December 1, 2019, to June 1, 2020, Wang entered and canceled orders in Lean Hog, Live Cattle, and E-Mini Nasdaq futures contracts on the Globex electronic trading platform during the pre-open period that were not entered for the purpose of executing bona fide transactions. Rather, Wang entered and canceled the orders to discern price limits and restrictions on order entry in the relevant contracts during the pre-open period, and to test his trading platform. The entry and cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price. The Panel concluded that Wang thereby violated CME Rule 575.A.

PENALTY:                   

In accordance with the settlement offer, the Panel ordered Wang to pay a $20,000 fine in connection with this case and companion case CBOT 20-1338-BC ($15,000 of which is allocated to CME) and to serve a two-month 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. The suspension shall run from October 28, 2021, through December 28, 2021, inclusive.

EFFECTIVE DATE:                         

October 28, 2021