CME fines Makor Securities for alleged rule violations
Makor Securities London Limited has agreed to pay a fine of $35,000 under a settlement offer with CME.
Pursuant to the offer of settlement in which Makor neither admitted nor denied the rule violations upon which the penalty is based, a Panel of the Chicago Mercantile Exchange (CME) Business Conduct Committee found that from July 28, 2021, through July 30, 2021, an employee of Makor brokered block trades in E-Mini S&P 500 Put options and failed to accurately and timely report the execution times to the Exchange in violation of CME Rule 526.F.
Additionally, the Panel found that the block trades were executed between accounts with common beneficial ownership. Even though the Makor employee received simultaneous buy and sell orders from the same customer, he failed to inquire whether the orders were for accounts with common beneficial ownership. Therefore, the Panel found that Makor violated CME Rule 534.
The Panel also found that Makor did not keep adequate records of a block trade execution time for a trade executed on July 29, 2021, and therefore violated CME Rule 536.H.
Finally, the Panel found that Makor failed to provide clear and accurate guidance to its employee regarding the execution of block trades and wash transactions and, in failing to diligently supervise its employee, violated CME Rule 432.W.
The disciplinary action notice is effective April 21, 2023.