NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Jayaraj Perumalswamy

CME RULE:

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.

FINDINGS:

Pursuant to an offer of settlement in which Jayaraj Perumalswamy neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on October 11, 2023 a Panel of the CME Business Conduct Committee (“Panel”) found that between June 1, 2021, and October 7, 2021, Perumalswamy operated two automated trading systems (“ATS”) wherein the aggressive strategy entered orders in NASDAQ E-Mini and Micro E-Mini futures that traded opposite resting orders the second ATS previously entered. Perumalswamy knew or reasonably should have known that the purpose of the orders was to avoid taking a bona fide market position exposed to market risk.

The Panel found that as a result of the foregoing, Perumalswamy violated CME Rule 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered Perumalswamy to pay a $15,000 fine and to serve a 15-business-day trading suspension from 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. The suspension shall run from trade date October 13, 2023 through, and including, trade date November 2, 2023.