International derivatives marketplace CME Group has posted a notice of disciplinary action against Zephyr Energy Broking Inc.

Pursuant to an offer of settlement in which Zephyr Energy Broking Inc., a brokerage firm located in Dubai, neither admitted nor denied the rule violations or factual findings upon which the penalty is based, a Panel of the New York Mercantile Exchange Business Conduct Committee found

that during the time period of November 1, 2023, through April 12, 2024, Zephyr misreported the execution times of multiple block trades and submitted one late block trade in various Argus Propane Far East Index futures, Argus Propane futures, and Japan C&F Naphtha (Platts) futures, using a process that was contrary to the manner specified by the Exchange.

Specifically, Zephyr brokered the terms of the block trades by having the counterparties agree to all of the details of the block trades except for the price. Zephyr reported the block trades to the Exchange only after receiving the Argus International, LPG published assessment of the market settlement price in the subject contract, which occurred days and sometimes weeks after the block trades were originally negotiated between the counterparties. Zephyr did not confirm this market settlement price with the counterparties before reporting the trades to the Exchange and did not retain any written communications confirming the execution price; therefore, the correct execution times could not be determined.

The Panel found that Zephyr failed to correctly execute, record and report the block trades at issue. The Panel concluded that Zephyr thereby violated NYMEX Rules 526, 526.F., and 536.E.

In accordance with the settlement offer, the Panel ordered Zephyr to pay a fine to the Exchange in the amount of $45,000.