NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Renta 4 Banco

CME RULE VIOLATIONS:

Rule 432. General Offenses (in part)

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

Rule 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (in part)

A. No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction, except in accordance with Sections B. and C. below.

…

C. Parties may engage in pre-execution communications with regard to transactions executed on the Globex platform where one party (the first party) wishes to be assured that a contra party (the second party) will take the opposite side of the order under the following circumstances:
…

3. Permissible Entry Methods for Orders

The following order entry methods for futures, options, spreads and combinations vary by product, as set forth in the Rule 539.C. Crossing Protocols Table (“Table”) in the Interpretations Section at the end of Chapter 5.

a. Globex Cross (“G-Cross”) The first party’s order is entered into the Globex platform first. The second party’s order may not be entered into the Globex platform until a period of 5 seconds has elapsed from the time of entry of the first order.

561.A. Large Trader Reporting (in part)

Clearing members, omnibus accounts and foreign brokers shall electronically submit to the Exchange a daily large trader position report of all positions required to be reported as set forth in the Position Limit, Position Accountability and Reportable Level Table, in the Interpretations Section at the end of Chapter 5.

FINDINGS:

Pursuant to an offer of settlement in which Renta 4 Banco (“Renta”) neither admitted nor denied the rule violations upon which the penalty is based, on April 20, 2022, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on October 2, 2020, two Renta traders entered orders in December 2020 E-mini S&P 500 futures and options, E-mini Nasdaq 100 futures, Euro FX futures, Euro/Japanese Yen futures, and Euro British Pound futures on their employer’s behalf in a prearranged fashion. Specifically, the traders coordinated their order entries for Renta’s account to ensure that the orders traded opposite each other and without following Globex Cross procedures. Further, the Panel found that Renta failed to diligently supervise the traders regarding permissible order entry for Globex Cross trades. Additionally, the Panel found that Renta reported positions it held in a customer omnibus account on a net, rather than a gross, basis.

The Panel concluded that Renta violated Rules 432.W., 539.A., and 561.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Renta to pay a fine in the amount of $60,000.