CLARKSONS PLATOU FUTURES LIMITED
RULE 432. GENERAL OFFENSES (IN PART)
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.
RULE 526. BLOCK TRADES (IN PART)
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
CME GROUP RA2013-5, RA2102-5, RA2103-5, AND RA2109-5:
7. Block Trade Submission
The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action. Please note that the execution time of a block trade is the time that the trade is consummated, which is the time that the parties agree to the trade in principle. In that regard, spread block trades are deemed consummated at the time the parties agree to the differential or combination price, not the time the leg prices are determined. Market participants must accurately report the execution time of the block trade. The reporting of inaccurate execution times may result in disciplinary action.
11. Broker Disclosure of Customer Identity
A broker negotiating a block trade on behalf of a customer may disclose the identity of the customer to potential counterparties, including the counterparty with which the block trade is consummated, only with the express permission of the customer.
Pursuant to an offer of settlement in which Clarksons Platou Futures Limited neither admitted or denied the Rule violations or factual findings upon which the penalty is based, on August 11, 2022, a Panel of the NYMEX Business Conduct Committee (“BCC Panel”) found that on several occasions between February 1, 2021 to March 31, 2021, Clarksons submitted multiple block trades with inaccurate execution times and also failed to report multiple block trades to the Exchange within the required time period following execution in various Refined and Freight Energy Products. Clarksons also impermissibly disclosed counterparty information for several block trades. Finally, Clarksons failed to properly advise and train its brokers as to relevant Exchange rules and Market Regulation Advisory Notices (“MRANs”) regarding reporting the execution time in a manner sufficient to ensure compliance with the Exchange’s block trade reporting rules.
The Panel found that as a result of the foregoing, Clarksons violated NYMEX Rules 526, 526.F., and 432.W.
In accordance with the settlement offer, the BCC Panel ordered Clarksons to pay a $60,000 fine.