Notice of Disciplinary Action

NON-MEMBER:

SHARP LINK DEVELOPMENTS LTD.

NYMEX RULE: 539. Prearranged, Pre-Negotiated and Noncompetitive Trades Prohibited (In Part)

539.A. General Prohibition

No person shall prearrange or pre-negotiate any purchase or sale or noncompetitively execute any transaction.

432. General Offenses (In Part)

It shall be an offense:

L.2. to fail to fully answer all questions or produce all books and records at such hearing or in connection with any investigation, or to make false statements;

S. to fail to comply with an order of the Board, Exchange staff, or any hearing committee.

FINDINGS:

On July 5, 2022, the Chief Regulatory Officer of CME Group’s Market Regulation Department issued charges against Sharp Link Developments Ltd. for violating Rules 539.A. and 432.L.2., based on allegations that from July 3, 2019, through July 10, 2019, several Sharp Link traders noncompetitively executed transactions in the Heating Oil, Palladium, and Platinum futures and that Sharp Link failed to fully answer all questions and produce all books and records in connection with an Exchange investigation. The CRO also issued a charge against Sharp Link for violating Rule 432.S., based on allegations that Sharp Link failed to comply with an order by the Panel in an Exchange disciplinary proceeding (NYMEX 17-0752-BC) to pay a fine of $40,000, after a finding that its traders prearranged and executed trades in the Crude Oil Futures market in which the buy and sell orders were entered less than five seconds of each other, in violation of Rule 539.

On September 6, 2023, a Hearing Panel Chair of the NYMEX Business Conduct Committee (“BCC”) first determined that Sharp Link, having failed to submit a written answer to the charges issued against it, was deemed to have admitted the charges. Sharp Link therefore waived its right to a hearing on the merits of the charges. Pursuant to Rule 408.F., a BCC Panel then found Sharp Link 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 Sharp Link to pay a fine in the amount of $300,000 in connection with this case and companion case COMEX 19-1122-BC ($250,000 allocated to NYMEX), and permanently suspended Sharp Link from direct access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization, or swap execution facility owned or controlled by CME Group.