NOTICE OF DISCIPLINARY ACTION

MEMBER:

GFI Securities Limited

CME RULE VIOLATIONS:

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. The following shall govern block trades:

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 REGULATION ADVISORY NOTICES RA2109-5 and
RA2201-5 (in part):

Block Trade Submission

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.

RULE 432.W. 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.

FINDINGS:

Pursuant to an offer of settlement in which GFI neither admitted nor denied the rule violations or factual findings upon which the penalty is based, on September 19, 2023, a Panel of the Chicago Mercantile Exchange (“CME”) Business Conduct Committee (“Panel”) found that, from September 1, 2021, through September 10, 2021, GFI submitted block trades to the Exchange with inaccurate execution times and failed to report block trades to the Exchange within the required time period following execution in various E-mini S&P 500 options markets. Additionally, the Panel found that GFI failed to diligently supervise its employees when it failed to provide clear and accurate guidance regarding the execution of block trades.

The Panel thereby concluded that GFI violated CME Rules 526, 526.F., and 432.W.

PENALTY:

In accordance with the settlement offer, the Panel ordered GFI to pay a $55,000 fine in connection with this case and companion case NYMEX 21-1528-BC ($35,000 of which is allocated to CME).