NOTICE OF DISCIPLINARY ACTION

MEMBER:

Newedge USA LLC (now known as SG Americas Securities, LLC)

RULE VIOLATIONS:

(Legacy) Rule 526. Block Trades

F. The seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution; except that block trades in interest rate futures and options executed outside of Regular Trading Hours (7:00 a.m. – 4:00 p.m. Central Time, Monday – Friday on regular business days) and Housing and Weather futures and options must be reported within fifteen minutes of the time of execution. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.

Market Regulation Advisory Notice RA1203-3 Block Trades

5. Block Trade Price Reporting Requirements (in part)

b) Reporting Obligation (in part)

The failure to submit timely, accurate and complete block trade reports may subject the party responsible for the reporting obligation to disciplinary action.
…

FINDINGS:

Pursuant to an offer of settlement in which Newedge USA LLC (“Newedge”) neither admitted nor denied the rule violations upon which the penalty is based, on July 16, 2015, a Panel of the CME Business Conduct Committee found that it had jurisdiction over Newedge pursuant to CME Rules 400 and 402 as the conduct occurred while Newedge was a CME member. The Panel also found that between October 8, 2010, and March 30, 2012, Newedge, through its employees, brokered and reported three block trades on behalf of customers in Eurodollar futures and options on futures contracts that were not reported to the Exchange within the applicable time limit following execution, and two of these same block trades did not include the accurate time of execution. Additionally during this same timeframe, Newedge brokered and reported a fourth block trade between a customer and an affiliate of Newedge in Euro FX futures that was not reported with an accurate execution time or within the applicable time limit following execution. The Panel concluded that Newedge thereby violated CME Rule 526.

PENALTY:

In accordance with the settlement offer, the Panel ordered Newedge to pay a $25,000 fine.

EFFECTIVE DATE:

July 20, 2015