NOTICE OF SUMMARY ACTION

FILE NO.:

CBOT RSRH-23-7007

MEMBER FIRM:

MAREX CAPITAL MARKETS, INC.

NYMEX RULE:

854. CONCURRENT LONG AND SHORT POSITIONS

Set forth below are the procedures that must be followed for concurrent long and short positions and hold-open accounts... 

B. Concurrent long and short positions in physically delivered contracts subject to spot month position limits that are held by the same owner during the time that spot month position limits are in effect must be offset by transactions executed in the market, by allowable privately negotiated transactions, or fulfilled through the normal delivery process, provided however that trades may be offset via netting, transfer or position adjustment to correct a bona fide clerical or operational error on the day the error is identified and the quantity of the offset does not represent more than two percent of the reported open interest in the affected futures contract month. Permissible Exceptions Notwithstanding the foregoing: 

1. Trades may be transferred for offset if the trade date of the position being transferred is the same as the transfer date; 

2. An account that becomes concurrently long and short as a result of a futures position that results from an option assignment will be allowed one business day to net such positions; or, 

3. Where the Chief Regulatory Officer or his designee determines, in their respective sole discretion, that permitting an offset via netting, transfer or position adjustment in excess of two percent of the reported open interest will not adversely impact either the affected market or any persons holding open positions in the affected market (pertinent section included).  

CBT RULE:

Rule 807. Open Long Positions During Delivery Month

At such times and in such manner as shall be prescribed by the Manual, clearing members shall submit a complete and accurate record of dates of all open purchases for use in making deliveries. Clearing members shall be fully responsible for inventories submitted to the Clearing House.  This rule shall not apply to trading in options contracts.

FINDINGS:

During the month of July 2023, Marex Capital Markets, Inc. inaccurately reported its open interest in August 2023 Crude Oil Futures contract in violation of Rule 854.

On trade date July 6, 2023, Marex Capital Markets, Inc. inaccurately reported long positions eligible for delivery in the July 2023 Corn futures contract.

PENALTY:

On August 9, 2023, pursuant to Rule 512, a fine in the amount of $3,500 was collectively assessed against Marex Capital Markets, Inc. for its violations of NYMEX Rule 854 and CBOT 807 (see companion case NYMEX RSRH-23-7007):  NYMEX - $1,500 and CBOT - $2,000.

EFFECTIVE DATE:

August 30, 2023