NOTICE OF DISCIPLINARY ACTION

FILE NO.:

CME 16-0396-BC

NON-MEMBER:

Jiongsheng (Jim) Zhao

CME RULE VIOLATION:

Rule 575 (“Disrupted Practices Prohibited”)

All orders must be entered for the purpose of executing bona fide transactions. Additionally, all non-actionable messages must be entered in good faith for legitimate purposes.

A. No person shall enter or cause to be entered an order with the intent, at the time of order entry, to cancel the order before execution or to modify the order to avoid execution.

FINDINGS:

Pursuant to an offer of settlement in which Jiongsheng (Jim) Zhao (“Zhao”) neither admitted nor denied the rule violation upon which the penalty is based, on November 7, 2017, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that on one or more occasions between September 14, 2015, and March 23, 2016, Zhao engaged in certain activity in which he entered and cancelled large orders in the December 2015, March 2016, and June 2016 E-Mini S&P 500 futures contracts on the Globex electronic trading platform without the intent to trade. Specifically, Zhao entered these large orders to obtain fills on smaller orders he had resting on the opposite side of the order book. After receiving fills on his smaller orders, Zhao would cancel the large orders within seconds. The Panel concluded that Zhao thereby violated CME Rule 575.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered Zhao to pay a fine of
$35,000, and barred Zhao from access to all CME Group trading floors and direct and indirect access to all electronic trading and clearing platforms owned or controlled by CME Group for a period of 10 business days. The suspension shall run from November 10, 2017, through November 24, 2017, inclusive.

EFFECTIVE DATE:

November 9, 2017