• Illegal Money Passing Between Accounts

      • To
      • Members, Member Firms and Market Users
      • From
      • Market Regulation Department
      • #
      • CME Group RA1101-5
      • Notice Date
      • 27 April 2011
      • Effective Date
      • 27 April 2011
    • On November 29, 2010, CME, CBOT, NYMEX and COMEX implemented amended Rule 432 (“General Offenses”) to provide additional clarity that it is an offense for market participants to prearrange the execution of transactions for the purpose of passing money between accounts  (see SER-5481 from November 18, 2010).  This prohibition applies to transactions executed on CME Group exchanges’ competitive venues as well as to transactions that are bilaterally negotiated and submitted to CME Clearing.


      All transactions executed on exchange markets that are submitted for clearing must be made in good faith for the purpose of executing bona fide transactions, and prearranged trades intended to effectuate a transfer of funds from one account to another are explicitly prohibited.   Paired, round turn transactions between counterparties which show indicia that the trades were prearranged for the purpose of transferring equity between accounts will be reviewed by Market Regulation and violations of Rule 432.G. will result in disciplinary action. 


      Questions regarding this Advisory Notice may be directed to the following individuals in Market Regulation:


      Nancy Minett, Director, Investigations, 212.299.2940


      Greg Benbrook, Director, Investigations, 312.341.7619


      Robert Sniegowski, Associate Director, Rules & Regulatory Outreach, 312.341.5991


      Erin Schwartz, Senior Specialist, Rules & Regulatory Outreach, 312.341.3083



      For media inquiries concerning this Advisory Notice, please contact CME Group Corporate Communications at 312.930.3434 or news@cmegroup.com