NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 13-9284-BC and CME 13-9383-BC

NON-MEMBER:

Karya Capital Management LP

CME RULE VIOLATIONS:

Rule 562. Position Limit Violations (In part)

Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations. Additionally, any person making a bid or offer that would, if accepted, cause such person to exceed the applicable position limits shall be in violation of this rule.
 

FINDINGS:

Pursuant to an offer of settlement in which Karya Capital Management LP (“Karya”) neither admitted nor denied the rule violations upon which the penalty is based, and after consenting to the jurisdiction of the Exchange under Rule 418, on October 22, 2013, a Panel of the CME Business Conduct Committee (“Panel”) found that on trade date February 1, 2013, Karya held an aggregate intraday long position of 5,261 March 2013 Nikkei futures contracts, which exceeded the all contract months combined speculative position limit of 5,000 contracts by 261 contracts, or by 5%. Karya liquidated its overage position during the same trade date resulting in profits of $166,325. The Panel concluded that Karya thereby violated CME Rule 562 (Position Limit Violations).

The Panel further found that, on trade date April 8, 2013, while trading in the June 2013 Nikkei futures contracts, Karya exceeded the all contract months combined speculative position limit of 5,000 contracts by 64 contracts, or approximately 1%. Also, on trade date April 9, 2013, Karya increased its June 2013 Nikkei futures position to 5,264 contracts, or approximately 5% over the 5,000-contract limit. The Panel found that Karya thereby violated CME Rule 562 (Position Limit Violations).
 

PENALTY:

In accordance with the settlement offer, the Panel fined Karya $10,000 and ordered it to pay $166,325 in disgorgement in connection with the February 1, 2013 intraday violation and fined Karya $30,000 in connection with the April 8-9, 2013 violation.
 

EFFECTIVE DATE:

October 24, 2013