The International Derivatives Market The CME Group published a summary action notice against Straits Financial LLC.
During the period July 2022 through August 2023, Straits Financial LLC submitted large open positions in numerous CME, CBT, NYMEX and COMEX futures and options in violation of Section 561.
Pursuant to Rule 512, a collective penalty of $15,000 was imposed against Straits Financial LLC for the Section 561 violations, as follows:
- CME – $7,500;
- CBOT – $2,500,
- NYMEX – $2,500 and
- COMEX – $2,500.
The relevant rule states:
561. SUBMISSION OF LARGE TRADE AND ACCOUNT VOLUME POSITIONS (in relevant part)
Clearing members, omnibus accounts and foreign brokers shall submit to the Exchange a daily report of all positions required to be reported as set out in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations Section at the end of Chapter 5. Positions at or above from the reference level to a particular expiration month of a futures contract or all sales or all calls of a particular expiration month of an option contract are required to be reported. For an account with reportable positions in a particular contract, all positions, regardless of size, in any contract month and in any contract aggregated with that contract must be reported…
The Exchange may require that more than one large trader position report be submitted electronically each day. The Business Conduct Commission or Market Regulation Department may require reporting or additional account identification from any clearing member, omnibus account or foreign broker for a smaller number of positions than is reflected in the Position Limit Table, Position Accountability Table and Reported Level Table.
The effective date of the notification is February 14, 2024.