NON-MEMBER FIRM:

Perdue Agribusiness Incorporated

CBOT RULE VIOLATIONS:

538.H. Documentation

Parties to any EFRP transaction must maintain all documents relevant to the Exchange contract and the cash, OTC swap, OTC option, or other OTC derivative, including all documents customarily generated in accordance with relevant market practices and any documents reflecting payment and transfer of title. Any such documents must be provided to the Exchange upon request, and it shall be the responsibility of the carrying clearing member firm to provide such requested documentation on a timely basis.

Market Regulation Advisory Notice Exchange for Related Positions Rule 538
RA 1006-5: (in part)

Q6: Can there be more than two parties to an EFRP transaction?

A6: Typically, there may be only two parties involved in an EFRP transaction. One party must be the buyer of (or the holder of the long market exposure associated with) the cash or OTC position and the seller of (or the holder of the short market exposure associated with) the corresponding Exchange contract. The other party must be the seller of (or the holder of the short market exposure associated with) the cash or OTC position and the buyer of (or the holder of the long market exposure associated with) the corresponding Exchange contract.

FINDINGS:

Pursuant to an offer of settlement in which Perdue Agribusiness Incorporated (“Perdue”) neither admitted nor denied the rule violations upon which the penalty is based, on May 27, 2015, a Panel of the Chicago Board of Trade Business Conduct Committee (“Panel or BCC”) found that Perdue is subject to the BCC’s jurisdiction pursuant to Rules 402 and 418, and that on March 4, 2013, and March 5, 2013, Perdue entered into three EFRP transactions that involved more than two parties. The Panel also found that Perdue failed to ensure that proper documentation existed for the corresponding cash positions and, thus, the EFRP transactions were not bona fide.

The Panel concluded that Perdue thereby violated CBOT Rule 538.H.

PENALTY:

In accordance with the settlement offer, the Panel ordered Perdue to pay a fine of $20,000.

EFFECTIVE DATE:

May 29, 2015