NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

OTCex LLC

CME RULE VIOLATIONS:

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 MARKET REGULATION ADVISORY NOTICE RA2019-5:

Block Trade Submission Requirements to CME Clearing

Please note that the execution time of a block trade is the time that the parties agree to the trade. Market Participants must accurately report the execution time of the block trade. The reporting of inaccurate execution times may result in disciplinary action.

RULE 432.W. 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.

FINDINGS:

Pursuant to an offer of settlement in which OTCex neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on June 21, 2023, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that, between September 8, 2021 and May 23, 2022, OTCex submitted multiple block trades in E-mini Consumer Staples Select Sector, E-mini Russell 2000 Index, E-mini Energy Select Sector, E-mini Industrial Select Sector, S&P 500 Annual Dividend Index, E-mini Financial Select Sector, E-mini Utilities Select Sector, E-mini Real Estate Select Sector, BTIC E-mini S&P 500, and Adjusted Interest Rate S&P 500 Total Return futures to the Exchange with inaccurate structures and execution times and, on certain occasions, failed to report block trades to the Exchange within the required time period following execution. Additionally, the Panel found that OTCex failed to diligently monitor and sufficiently train its employee as to the relevant Exchange rules and Market Regulation Advisory Notices to ensure compliance with the same.

The Panel thereby concluded that OTCex violated CME Rules 526, 526.F., and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered OTCex to pay a $85,000 fine in connection with this case and companion case CBOT 21-1527-BC ($55,000 of which is allocated to CME).