NOTICE OF DISCIPLINARY ACTION

NON-MEMBER:

MITSUBISHI CORPORATION RTM JAPAN LTD.

EXCHANGE RULE VIOLATIONS:

RULE 432. GENERAL OFFENSES (IN PART)

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

RULE 575.A. (DISRUPTIVE PRACTICES PROHIBITED) (IN PART)

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.

RULE 433. STRICT LIABILITY FOR THE ACTS OF AGENTS

Pursuant to Section 2(a)(1)(B) of the Commodity Exchange Act, and notwithstanding Rule 432.W., the act, omission, or failure of any official, agent, or other person acting for any party within the scope of his employment or office shall be deemed the act, omission or failure of the party, as well as of the official, agent or other person who committed the act

FINDINGS:

Pursuant to an offer of settlement in which Mitsubishi Corporation RTM Japan Ltd. (“RTM Japan”) neither admitted nor denied any rule violations, allegations or findings upon which the below penalty is based, on October 10, 2019, a Panel of the New York Mercantile Exchange Business Conduct Committee (“Panel”) found that RTM Japan failed to properly train one of its traders, a secondee (“Trader A”), who had no prior trading experience, before placing Trader A into a temporary trading rotation to trade futures on NYMEX. While RTM Japan had assigned a “mentor” to Trader A to assist Trader A as an “apprentice trader,” Trader A did not receive sufficient U.S. regulatory guidance or oversight. The Panel also found that RTM Japan failed to provide sufficient training specific to trading CME Group markets, or CME Group trading rules, including disruptive trading, to Trader A. As a result, Trader A attempted to trade through experimentation, resulting in executing disruptive trades that violated Exchange rules.

The Panel found that as a result, RTM Japan violated Rule 432.W.

The Panel also found that, from April 5, 2018 through April 18, 2018, Trader A experimented with the entering of multiple orders without an intent to trade in the Platinum Futures contract market, but rather to observe the market’s reaction to those orders. Further, Trader A entered orders on one side of the market without the intent to trade and cancelled or modified them after trading smaller quantities that Trader A had entered on the other side of the market. The Panel concluded that, pursuant to Exchange Rule 433, RTM Japan was strictly liable for the acts of its employee whose conduct the Panel concluded violated Exchange Rule 575.A.

PENALTY:

In accordance with the settlement offer, the Panel ordered RTM Japan to pay a fine to the Exchange in the amount of $250,000.