NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 10-05049-MS-BC

MEMBER:

MACQUARIE FUTURES USA INC.

CBOT RULE VIOLATION:

Rule 854. CONCURRENT LONG AND SHORT POSITIONS

Set forth below are the procedures that must be followed for concurrent long and short positions and hold-open accounts.

A. Concurrent long and short positions in the same commodity and month may be held by a clearing member at the direction of a customer or on behalf of an omnibus account; however it shall be the duty of the clearing member to ascertain whether such positions are intended for offset or to be held open prior to final transmission of position data to the Clearing House.

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D. The Exchange takes no position regarding the internal bookkeeping procedures of its clearing members which, for the convenience of a customer, may "hold open" a position only on their books. However, the clearing member must accurately report to the Exchange and the Clearing House, as appropriate, large trader positions, long positions eligible for delivery and open interest.

FINDINGS:

Pursuant to an offer of settlement in which Macquarie Futures USA neither admitted nor denied the rule violation upon which the penalty is based, on November 15, 2011, a Panel of the CBOT Business Conduct Committee found that on June 29, 2010, Macquarie inadvertently reported the futures positions of two of its house accounts to the exchange as gross positions rather than net. As a result, Macquarie reported an open long position of 907 July 2010 Wheat futures contracts eligible for delivery when Macquarie had a net position of zero in this contract. That day, Macquarie was stopped for delivery on all 907 futures contracts. In failing to ascertain whether concurrent long and short positions were intended to offset prior to the final transmission of position data to CME Clearing, and in failing to accurately report long positions eligible for delivery, the Panel found that this conduct violated CBOT Rule 854 (Concurrent Long and Short Positions).

 

PENALTY:

In accordance with the settlement offer, the Panel fined Macquarie $10,000.

EFFECTIVE DATE:

November 17, 2011