NOTICE OF DISCIPLINARY ACTION

MEMBER:

The Scoular Company

CBOT RULE VIOLATIONS:

538.A. Nature of an EFRP (LEGACY)

An EFRP consists of two discrete but related simultaneous transactions. One party to the EFRP must be the buyer of (or the holder of the long market exposure associated with) the related position and the seller of the corresponding Exchange contract. The other party to the EFRP must be the seller of (or the holder of the short market exposure associated with) the related position and the buyer of the corresponding Exchange contract.

534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

FINDINGS:

Pursuant to an offer of settlement in which The Scoular Company (“Scoular”) neither admitted nor denied the rule violation upon which the penalty is based, on June 1, 2016, a Panel of the Chicago Board of Trade (“CBOT”) Business Conduct Committee (“BCC” or “Panel”) found that Scoular was subject to the BCC’s jurisdiction pursuant to Rules 402 and 418. The Panel found that on July 3, 2014, Scoular executed an Exchange for Physical (“EFP”) transaction in the Corn Futures market that consisted of a simultaneous exchange of a futures position without the exchange of a related cash position. The Panel further found that Scoular executed this transaction for the purpose of transferring positions between Scoular and a related entity, and that Scoular maintained ownership and control of the accounts on both sides of the transaction.

The Panel concluded that Scoular thereby violated CBOT Legacy Rule 538.A and Rule 534.

PENALTY:

In accordance with the settlement offer, the Panel ordered Scoular to pay a fine in the amount of $25,000.

EFFECTIVE DATE:

June 3, 2016