NOTICE OF DISCIPLINARY ACTION

FILE NO.:

NYMEX 13-9534-BC

MEMBER:

NEWEDGE USA, LLC

 

NYMEX RULE VIOLATION: 716. DUTIES OF CLEARING MEMBERS

Prior to the last day of trading in a physically delivered contract, each clearing member shall be responsible for assessing the account owner’s ability to make or take delivery for each account on its books with open positions in the expiring contract. Absent satisfactory information from the account owner, the clearing member is responsible for ensuring that the open positions are liquidated in an orderly manner prior to the expiration of trading.

FINDINGS:

Pursuant to an offer of settlement in which Newedge USA, LLC (“Newedge”) presented at a hearing on December 19, 2013, in which Newedge neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that it had jurisdiction over Newedge pursuant to Exchange Rules 400 and 402 as the conduct occurred while Newedge was a NYMEX member and that on July 22, 2013, the last trading date for the physically settled August 2013 Crude Oil Futures Contract (“AUG13 Crude Oil”), Newedge failed to ensure that open positions held on its books in the physically delivered AUG13 Crude Oil contract were liquidated in an orderly manner prior to the expiration of trading in violation of NYMEX Rule 716 (Duties of Clearing Members).

The Panel found that in so doing, Newedge violated NYMEX Rule 716.

PENALTY:

In accordance with the settlement offer, the Panel ordered Newedge to pay a fine to the Exchange in the amount of $20,000.

EFFECTIVE DATE:

December 23, 2013