NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 09-06292-BC

NON-MEMBER:

ROBERT JAMES ANSTEY
 

LEGACY CME RULE VIOLATIONS:

539.Prearranged,Pre-Negotiated and Noncompetitive Trades Prohibited

C. Pre-Execution Communications Regarding Globex Trades
Parties may engage in pre-execution communications with regard to transactions executed on the Globex platform where one party (the first party) wishes to be assured that a contra party (the second party) will take the opposite side of the order under the following circumstances:

(2.) Parties to pre-execution communications shall not (i) disclose to a non­ party the details of such communications or (ii) enter an order to take advantage of information conveyed during such communications except
in accordance with this rule.

539. c. 4. (in effect prior to April 19, 2010)

In the case of options orders prior to engaging in any pre-execution communications, a Request for Quote ("RFQ") must be submitted. Subsequent to the pre-execution communication,a second RFQ for the particular option or option spread or combination must be entered into Globex. Thereafter, a Request for Cross ("RFC") order which contains both the buy and the sell orders must be entered into Globex no less than fifteen (15) seconds and no more than thirty (30) seconds after the entry of the second RFQ in order to proceed with the trade. The RFQs and the RFC order must be entered within the same trading session. Failure to enter the RFC order within 30 seconds after the entry of the RFQ will require a new RFQ to be entered prior to the entry of the RFC order, which must be entered in accordance with the time parameters described above in order to proceed with the trade.

RULE VIOLATION:

539.Prearranged,Pre-Negotiated and Noncompetitive Trades Prohibited

C.4. (in effect subsequent to April 19, 2010)

In the case of options orders, subsequent to the pre-execution communication, a Request for Quote ( "RFQ") for the particular option or option spread or combination must be entered into Globex. Thereafter, a Request for Cross ("RFC") order which contains both the buy and the sell orders must be entered into Globex no less than fifteen (15) seconds and no more than thirty (30) seconds after the entry of the RFQ in order to proceed with the trade. The RFQs and the RFC order must be entered within the same trading session. Failure to enter the RFC order within 30 seconds after the entry of the RFQ will require a new RFQ to be entered prior to the entry of the RFC order, which must be entered in accordance with the time parameters described above in order to proceed with the trade.

FINDINGS:

Pursuant to an offer of settlement in which Robert Anstey ("Anstey") neither admitted nor denied the rule violations upon which the penalty is based, on March 22,2012, a panel of the CME Business Conduct Committee found that on three occasions between September 2009 and April 8, 2010, Anstey did not submit a Request for Quote into the CME Globex electronic trading platform prior to engaging in pre-execution communications. On two of the same occasions during the same time period, Anstey also failed to submit a Request for Cross order which contained both the buy and sell orders after the entry of a second Request for Quote.

Additionally, on three occasions between April 23, 2010 and July 2011, Anstey engaged in pre-execution communications and subsequently traded without entering a Request for Cross order which contained both the buy and sell orders.

The Panel found that in engaging in the above described activity, Anstey violated CME Rule 539.C.4.
 

PENALTY:

In accordance with the offer of settlement, the Panel fined Robert Anstey
$50,000 and suspended his direct and indirect access to any CME Group electronic trading or clearing platform for 20 business days, beginning on the effective date below and continuing through and including April 20, 2012.

EFFECTIVE DATE:

March 26, 2012