NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

JihSun Futures Co. Ltd.

CME 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 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 Mercantile Exchange Business Conduct Committee (“Panel”) found that from January 1, 2020, to March 9, 2021, JihSun employees entered and canceled orders in various Foreign Exchange and Equities 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. 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 CME Rules 575.A. 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 CBOT 21-1422-BC, NYMEX 21-1422-BC, and COMEX 21-1422-BC ($18,750 of which is allocated to CME).