NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Marex Spectron International Limited

CME RULE VIOLATIONS:

Rule 432. General Offenses (In Part)

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.

Rule 526. Block Trades (In Part)

D. The price at which a block trade is executed must be fair and reasonable in light of (i) the size of the block trade, (ii) the prices and sizes of other transactions in the same contract at the relevant time, (iii) the prices and sizes of transactions in other relevant markets, including without limitation the underlying cash market or related futures markets, at the relevant time, and (iv) the circumstances of the markets or the parties to the block trade.

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

536. H. Retention of Records

Each member and member firm and employees of the foregoing must keep full, complete and systematic records, including records created or transmitted electronically, together with all pertinent data and memoranda, of all transactions relating to its business of dealing in commodity interests and related cash or forward transactions in accordance with CFTC Regulation 1.35. Written and electronic records must be retained for a minimum of five years in permanent form. Oral communications required to be recorded pursuant to CFTC Regulation 1.35(a) must be retained for a minimum of one year past the date on which the oral communication occurred.

Market Regulation Advisory Notice CME Group RA2105-5 (In Part)

8. Block Trade Recordkeeping

Complete order records for block trades must be created and maintained pursuant to Rule 536 and CFTC Regulations. Additionally, the time of execution of the block trade must also be recorded for all block trades.

FINDINGS:

Pursuant to an offer of settlement in which Marex Spectron International Limited neither admitted nor denied the rule violations upon which the penalty is based, on April 19, 2023, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that from July 26, 2021, through July 30, 2021, Marex traders, through a broker, executed multiple block trades in E-Mini S&P 500 Put options opposite another account with common beneficial ownership. Therefore, the Panel found that Marex violated CME Rule 534.

Additionally, the Panel found that on July 30, 2021, Marex executed one of the aforementioned block trades without consideration for whether the execution price was fair and reasonable at the relevant time in violation of CME Rule 526.D. The Panel also found that Marex did not keep adequate records of the block trade execution time for the trade executed on July 29, 2021, and therefore violated CME Rule 536.H. Finally, the Panel found that Marex failed to provide clear and accurate guidance to its employees regarding the execution of block trades and prohibited wash transactions and, in failing to diligently supervise its employees, violated CME Rule 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered Marex to pay a fine in the amount of $50,000.