NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Linshuyi Zhang

CME RULE VIOLATIONS:

CME 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.

B. No person shall enter or cause to be entered an actionable or non-actionable message(s) with intent to mislead other market participants.

FINDINGS:

On July 28, 2022, the CME Group Chief Regulatory Officer (“CRO”) charged Linshuyi Zhang with violating CME Rules 575.A. and 575.B. based on allegations that on one or more occasions from November 9, 2020, through January 20, 2021, Zhang entered orders in Japanese Yen futures and British Pound futures with the intent, at the time of order entry, to cancel the orders before execution and with the intent to mislead other market participants. Zhang engaged in a pattern of layering orders on the same side of the market to influence others to trade opposite her smaller orders resting on the opposite side of the market. Zhang also coordinated this layering activity with a cooperative party that placed smaller orders on the opposite side of the market. Zhang’s layered orders influenced others to trade opposite the resting orders of the cooperative party. As a result of this activity, Zhang profited $575.00.

On April 25, 2023, a Hearing Panel Chair of the CME Business Conduct Committee (“BCC”) first determined that Zhang, having failed to submit a written answer to the charges issued against her, was deemed to have admitted the charges. Zhang therefore waived her right to a hearing on the merits of the charges. Pursuant to CME Rule 408.F., a BCC Panel then found Zhang guilty of committing the admitted charges and held a penalty hearing thereafter.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Zhang to pay a fine in the amount of $50,000 and to disgorge profits in the amount of $575.00. The Panel also suspended Zhang from all direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group Inc., beginning on the effective date below and continuing for a period of five years after the fine is paid in full.

EFFECTIVE DATE:

May 16, 2023