NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CBOT 13-9262-BC

NON-MEMBER FIRM:

Sun Life Financial Inc.

CBOT RULE VIOLATIONS:

(LEGACY) Rule 432 (“General Offenses”) (in part)

It shall be an offense:
W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

(LEGACY) Rule 534 Wash Trades Prohibited

No person shall place for the same beneficial owner buy and sell orders for the same product and expiration month, and, for a put or call option, the same strike price, at or about the same time with the intent to avoid a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders placed for the same beneficial owner in the same product and expiration month, and, for a put or call option , the same strike price, must be entered in good faith for the purpose of executing bona fide transactions that result in a change of ownership. Additionally, no person shall accept, execute or accommodate the execution of orders which are prohibited by this rule with knowledge of their character.

FINDINGS:

Pursuant to an offer of settlement in which Sun Life Financial Inc. (“Sun Life”) neither admitted nor denied the rule violations upon which the penalty is based, on October 23, 2014, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel”) found that Sun Life voluntarily submitted itself to the jurisdiction of the BCC for purposes of settling this matter, and that on August 14, 2012, two employees of a subsidiary of Sun Life, who were executing orders on behalf of two different operating subsidiaries of Sun Life, executed two trades on Globex totaling 989 September 2012 Ultra Treasury Bond futures contracts in accounts on both sides of the transactions over which Sun Life, as the ultimate parent corporation, maintained ownership and control through the two different subsidiaries of Sun Life. While the trades were independently placed by portfolio management personnel, the matching buy and sell orders were entered by the two trade execution employees with the knowledge and intent that the orders would match opposite one another. Such employees now understand that this type of transaction should be effected in a manner permitted by Exchange rules. The Panel also found that Sun Life failed to diligently supervise such trade execution employees in a manner sufficient to ensure that their conduct was consistent with Exchange rules. Following this occurrence, the Sun Life subsidiaries undertook mitigation and training measures.

The Panel concluded that Sun Life thereby violated CBOT Rules (Legacy) 432.W. and (Legacy) 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered Sun Life to pay a fine of $50,000.

EFFECTIVE DATE:

October 27, 2014