NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 13-9363-BC

NON-MEMBER:

Fan Zhang

CME RULE VIOLATIONS:

Rule 432. General Offenses

It shall be an offense:

G. To prearrange the execution of transactions in Exchange products for the purpose of transferring equity between accounts.

Rule 576. Identification of Globex Terminal Operators (In Part)

Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules… 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 Fan Zhang (“Zhang”) neither admitted nor denied the rule violations upon which the penalty is based, on April 30, 2014, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee found that Zhang consented to the jurisdiction of the Exchange under Rule 418 and that on December 27, 2012, in the February 2013 Las Vegas CSI Housing Index futures contracts and on March 4, 2013, in the March 2013 Cheese future contracts, Zhang executed prearranged trades on the Globex electronic trading platform for the purpose of transferring equity between two accounts he controlled. In addition, Zhang utilized another individual’s Globex user ID (“TAG 50”) to enter orders on to Globex. The Panel concluded that Zhang thereby violated CME Rules 432.G. and 576.

PENALTY:

In accordance with the settlement offer, the Panel ordered Zhang to pay a fine of $7,500. The Panel also barred Zhang from accessing any CME Group Inc. trading floor, and direct access to all electronic trading and clearing platforms owned or controlled by CME Group Inc. for 25 days, beginning on the effective date below and continuing through and including May 26, 2014.

EFFECTIVE DATE:

May 2, 2014