NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

JihSun Futures Co. Ltd.

CBOT RULE VIOLATIONS:

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.

Rule 576. Identification of Globex Terminal Operators

Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. 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.

Rule 432. General Offenses

It shall be an offense:

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 JihSun Futures Co. Ltd. neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on May 17, 2022, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that from January 1, 2020, to March 9, 2021, JihSun employees entered and canceled orders in Micro E-mini Dow Jones Industrial Average Index and E-mini Dow ($5) futures markets on the Globex electronic trading platform during the pre-open period that were not entered for the purpose of executing bona fide transactions. Rather, the employees entered and canceled the orders during the pre-open period to test JihSun’s trading platform. The entry and cancelation of these orders caused fluctuations in the publicly displayed Indicative Opening Price. After being notified of the issue by Market Regulation, JihSun employees continued to enter and cancel non-bona fide test orders during the pre-open period. Additionally, on May 3, 2021, a JihSun employee entered non-bona fide test orders in Micro E-mini Dow and E-mini Dow futures markets on Globex during regular trading hours using a user ID other than the employee’s own unique user ID. The Panel further found that JihSun failed to diligently supervise or train its employees in a manner sufficient to ensure that their conduct was consistent with Exchange rules. The Panel concluded that JihSun thereby violated CBOT Rules 575.A., 576, and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered JihSun to pay a $75,000 fine in connection with this case and companion cases CME 21-1422-BC, NYMEX 21-1422-BC, and COMEX 21-1422-BC ($18,750 of which is allocated to CBOT).