NOTICE OF DISCIPLINARY ACTION

FILE NO.:                             

CME 11-8057-BC

MEMBER:                           

FC STONE LLC

CME RULE VIOLATION:                       

Rule 854.B. CONCURRENT LONG AND SHORT POSITIONS

Concurrent long and short positions in physically delivered contracts that are held by the same owner during the delivery month and two business days prior to the delivery month must be offset by transactions executed in the market, by allowable privately negotiated transactions, or fulfilled through the normal delivery process, provided however that trades may be transferred for offset if the trade date of the position being transferred is the same as the transfer date. Such positions may not be offset via netting, transfer, or position adjustment except to correct a bona fide clerical or operational error on the day the error is identified and provided that the quantity of the offset does not represent more than one percent of the reported open interest in the affected futures contract month.

FINDINGS:                         

Pursuant to an offer of settlement in which FC Stone, LLC (“FC Stone”) neither admitted nor denied the rule violation upon which the penalty is based, on March 25, 2014, a Panel of the CME Business Conduct Committee found that during the January 2011 Random Length Lumber futures contract delivery period, FC Stone submitted multiple position adjustments to open interest after the Clearing deadline in excess of one percent of the reported open interest in the contract. The Panel found that this conduct violated CME Rule 854.B. (Concurrent Long and Short Positions).

PENALTY:                           

In accordance with the settlement offer, the Panel ordered FC Stone to pay a fine of $15,000.

EFFECTIVE DATE:                                   

March 27, 2014