NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 12-8880-BC

MEMBER:

Breakwater Trading LLC

CME RULE VIOLATION:

Rule 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS

Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.

FINDINGS:

Pursuant to an offer of settlement in which Breakwater Trading LLC neither admitted nor denied the rule violations upon which the penalty is based, on April 24, 2013, a Panel of the CME Business Conduct Committee found that between December 2010 and March 2011, Breakwater Trading LLC allowed its clerks to use Tag50 User IDs registered to Breakwater Trading LLC traders. The Panel concluded that in so doing, Breakwater violated CME Rules 576.

PENALTY:

In accordance with the settlement offer, the Panel ordered Breakwater Trading
LLC to pay a fine of $15,000.

EFFECTIVE DATE:

April 26, 2013