NOTICE OF DISCIPLINARY ACTION

MEMBER:

TULLETT PREBON (EUROPE) LTD.

NYMEX RULE VIOLATIONS:

RULE 432. GENERAL OFFENSES (in part)

It shall be an offense:

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

RULE 526. BLOCK TRADES (in part)

The Exchange shall designate the products in which block trades shall be
permitted and determine the minimum quantity thresholds for such transactions.

F. Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.

CME GROUP MARKET ADVISORY NOTICE RA2103-5

Block Trades (Sections 7 & 11, in part)

Please note that the execution time of a block trade is the time that the trade is consummated, which is the time that the parties agree to the trade in principle… Market participants must accurately report the execution time of the block trade. The reporting of inaccurate execution times may result in disciplinary action.
…
Except in circumstances where brokers obtain express consent on a trade-by-trade basis, brokers must reconfirm such consent on no less than an annual basis. For the reconfirmation, negative consent is permissible. Brokers should retain documentation evidencing the annual reconfirmation and must provide it to Market Regulation upon request.

With a customer’s consent, the broker may disclose the customer’s identity solely to parties involved in the block trade negotiation, including the party with whom the block trade is consummated. Disclosure to anyone else is strictly prohibited.

FINDINGS:

Pursuant to an offer of settlement in which Tullett Prebon (Europe) Ltd. neither admitted nor denied the rule violations or factual allegations upon which the penalty is based, on May 24, 2023, a Panel of the NYMEX Business Conduct Committee (“Panel”) found that between July 2021, and August 2022, TP Europe failed to report numerous block trades in various NYMEX Energy futures contracts to the Exchange within the required time period following execution, as well as failed to report accurate execution times for these block trades to the Exchange.

The Panel also found that during this timeframe, TP Europe failed to diligently supervise the execution of block trades by its employees to enable compliance with Exchange block trade reporting requirements.

The Panel further found that, in a limited number of instances in July 2021, while negotiating a block trade, a broker employed by TP Europe disclosed non-public information to potential counterparties, specifically the identity of potential and actual counterparties.

The Panel found that as a result of the foregoing, TP Europe violated NYMEX Rules 526, 526.F., 432.W., and Market Regulation Advisory Notice RA2103-5.

PENALTY:

In accordance with the settlement offer, the Panel ordered TP Europe to pay a fine in the amount of $150,000.