NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 12-9093-BC

NON-MEMBER:

BNP PARIBAS SA LONDON BRANCH

EXCHANGE RULES:

Rule 432. General Offenses

It shall be an offense:

W. for a Member to fail to diligently supervise its employees and agents in the conduct of their business relating to the Exchange.

Rule 534. Wash Trades Prohibited

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

 

FINDINGS:

Pursuant to an offer of settlement that BNP Paribas SA London Branch (“BNP London”) presented at a hearing on July 31, 2013, in which BNP London neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that BNP London is subject to the jurisdiction of the Exchange because it is an affiliate of a NYMEX member and that on April 17, 2012, a trader employed by BNP entered a series of four buy and sell orders in MAY12 Crude within five seconds of one another between accounts with the same beneficial owner, resulting in four trades for a total of 450 lots. The Panel also found that BNP failed to diligently supervise its trader in a manner sufficient to ensure that he was familiar with Exchange rules such as through appropriate compliance training.

The Panel found that as a result of the foregoing, BNP Paribas London violated Exchange Rules 432.W. and 534.

 

PENALTY:

In accordance with the settlement offer, the Panel ordered BNP Paribas London to pay a fine to the Exchange in the amount of $30,000.

 

EFFECTIVE DATE:

August 2, 2013