NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 10-04960-BC

MEMBER FIRM:

RBS Securities Inc.

CBOT RULE VIOLATIONS:

(Legacy) Rule 526. Block Trades

F. The seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution; except that block trades in interest rate futures and options executed outside of Regular Trading Hours (7:00 a.m. – 4:00 p.m. Central Time, Monday – Friday on regular business days) must be reported within fifteen minutes of the time of execution.

The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.

Market Regulation Advisory Notice RA1203-3 Block Trades

5. Block Trade Price Reporting Requirements (in part)

b) Reporting Obligation (in part)
The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action.
…

FINDINGS:

Pursuant to an offer of settlement in which RBS Securities Inc. (“RBS”) neither admitted nor denied the rule violations upon which the penalty is based, on May 15, 2014, a Panel of the CBOT Business Conduct Committee found that it had jurisdiction over RBS pursuant to CBOT Rules 400 and 402 as RBS is a CBOT member. The Panel also found that between December 1, 2009, and February 10, 2012, RBS, through its sales and trading desks, negotiated and executed four block trades for customers in various CBOT contracts that were not reported to the Exchange within the applicable time limit following execution and two of these same block trades did not include the accurate time of execution. The Panel concluded that RBS thereby violated CBOT Rule 526.

PENALTY:

In accordance with the settlement offer, the Panel ordered RBS to pay an $85,000 fine.

EFFECTIVE DATE:

May 19, 2014