NOTICE OF DISCIPLINARY ACTION

MEMBER:

G.H. Financials, LLC

CME RULE VIOLATIONS:

Rule 432. General Offenses (in part)

It shall be an offense:

Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange.

Rule 576. Identification of Globex Terminal Operators

Each Globex Terminal Operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If operator IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique operator ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using an operator ID other than the individual’s own unique operator ID.

Market Regulation Advisory Notices RA1805-5 and RA1902-5 CME Globex
Operator ID Requirements (in part)

With respect to omnibus accounts that are carried by a Clearing Member on an undisclosed basis, Clearing Members must be able to either obtain and provide the identity or require the omnibus account to obtain and provide the identity of the “Individual” or “Team” assigned to each Tag 50 ID within the undisclosed omnibus account immediately upon request by Market Regulation. Clearing Members must maintain or cause to be maintained historical records related to the “Individual” or “Team” assigned to each Tag 50 ID for a minimum of five years.

FINDINGS:

Pursuant to an offer of settlement in which G.H. Financials, LLC neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on January 31, 2024, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that between at least March 2019 through March 2021, GHF, a clearing member firm, held a customer omnibus account through which customers of a foreign Introducing Broker cleared. During this time, GHF repeatedly failed to obtain and provide the identity of individuals or teams assigned to operator IDs within the specified omnibus account immediately upon request by Market Regulation. These failures impeded Market Regulation’s ability to properly surveil the messaging and trading activity of the Introducing Broker’s customers in the Australian Dollar, British Pound, Canadian Dollar, Swiss Franc, Mexican Peso, New Zealand Dollar, Japanese Yen, Euro FX, and E-mini S&P 500 futures markets.

The Panel thereby concluded that GHF violated CME Rules 432.Q. and 576.

PENALTY:

In accordance with the settlement offer, the Panel ordered GHF to pay a $150,000 fine.