NOTICE OF DISCIPLINARY ACTION

MEMBER:

Citigroup Global Markets Inc.

COMEX RULES:

561. Submission of Large Trader Positions and Volume Threshold Accounts (In Part)

561.A. Large Trader Reporting

Clearing members, omnibus accounts and foreign brokers shall electronically submit to the Exchange a daily large trader position report of all positions required to be reported as set forth in the Position Limit, Position Accountability and Reportable Level Table, in the Interpretations Section at the end of Chapter 5. Positions at or above the reportable level in a particular expiration month of a futures contract, or in all puts or in all calls of a particular option contract expiration month, are required to be reported. For an account with reportable positions in a particular contract, all positions, regardless of size, in any contract month and in any contract that aggregates with that contract must be reported.

811. Position Change Data

Position change data must be submitted to the Clearing House each trading day not later than the time specified by the Clearing House. Position change data will be in such form and contain such information as prescribed by the Clearing House. When requested, the identification of accounts will be made available to the Financial and Regulatory Surveillance Department.

854. Concurrent Long and Short Positions (in part)

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.

C. Clearing members which, pursuant to this rule, carry concurrent long and short positions, must report to the Exchange both sides as open positions. When either side or both sides are reduced, the open positions as reported to the Exchange must be reduced accordingly, and, pursuant to Rule 806, may not subsequently be re-opened at the Exchange.

FINDINGS:

Pursuant to an offer of settlement, in which Citigroup Global Markets, Inc. neither admitted nor denied the Rule violations or factual findings upon which the penalty is based, on July 16, 2024, a Panel of the COMEX Business Conduct Committee (“Panel”) found that on March 13, 2023, Citigroup’s back-office accounting platform failed to maintain records of cleared trades after its settlement platform reached an upper limit of traded contracts due to extremely high trading volume. As a result, from that date through April 27, 2023, Citigroup: (1) submitted inaccurate large trader position reports to the Exchange; (2) failed to provide the Exchange with large trader corrections; and (3) failed to submit position change data to the Clearing House in a timely manner. When Citigroup resolved the issue, it could not provide the Exchange with postdated corrections to those reports.

These inaccurate and untimely reports included positions in various contract months of Gold futures and options on futures, and Copper options.

The Panel found that as a result of the foregoing, Citigroup violated COMEX Rules 561 and 811.

Additionally, the Panel found that on April 5, 2023, Citigroup submitted an open interest adjustment in 2023 Gold futures representing a decrease greater than two percent of open interest. Therefore, the Panel found that Citigroup violated COMEX Rule 854.B.

Finally, the Panel found that on multiple trade dates from March 14, 2023, through March 31, 2023, Citigroup submitted adjustments to re-open positions in Gold and Aluminum futures. Therefore, the Panel found that Citigroup violated COMEX Rule 854.C.

PENALTY:

Based on the record and the Panel’s findings and conclusions, the Panel ordered Citigroup to pay a fine in the amount of $130,000 in connection with this case and companion cases CBOT 23-1708, NYMEX 23-1708, and CME 23-1708 ($35,000 allocated to COMEX).