NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

Liu Sau Fung

EXCHANGE RULES:

Rule 432.L. General Offense (in part)

It shall be an offense:

2. to fail to fully answer all questions or produce all books and records at such hearing or in connection with any investigation, or to make false statements;

Rule 575.D. Disruptive Practices Prohibited

No person shall enter or cause to be entered an actionable or non-actionable message with the intent to disrupt, or with reckless disregard for the adverse impact on, the orderly conduct of trading or the fair execution of transactions.

FINDINGS:

On December 19, 2017, a Panel of the Commodity Exchange (“COMEX”) Probable Cause Committee charged Liu Sau Fung (“Fung”) with violating Exchange Rule 575.D. based on the allegations that from August 2015 through January 2016, Fung, while trading in several COMEX precious metal markets, coordinated with Xu Jianfeng (“Xu”) and Jiang Dawei (“Jiang”) , to frequently enter orders on one side of the market, each for one hundred or contracts or more, within the same rolling minute, which, after having been filled, had significant effects on the price and volume in the respective markets. Fung, Xu and Jiang would then repeat the process on the opposite side of the market which lead to further and often, more severe effects on prices and volume.

The Panel further charged Fung with violating Exchange Rule 432.L.2 for failing to produce records requested by Exchange staff.

On May 22, 2018, a Hearing Panel Chair of the COMEX Business Conduct Committee (“BCC”) entered an order finding that Fung failed to answer the charges against him. The Hearing Panel Chair further ordered that Fung was deemed to have admitted the charges issued and waived his right to a hearing on the merits of the charge.

On July 11, 2018, a penalty hearing was held before a panel of the COMEX BCC (“BCC Panel”) which found that Fung had committed the violations charged.

PENALTY:

In accordance with Exchange Rule 402.B. (Sanctions) the BCC Panel ordered that Fung pay a $100,000 fine and be permanently banned from (a) applying for Membership at any CME Group Exchange; (b) direct or indirect access to any trading or clearing platform owned or controlled by the CME Group, Inc.; and (c) access to any trading floor owned or operated by CME Group, Inc., including CME Globex.