CME imposes $500,000 fine on Grand International Futures Company Limited
International derivatives marketplace CME Group has posted a notice of disciplinary action against Grand International Futures Company Limited.
Pursuant to an offer of settlement in which Grand International Futures Company Limited neither admitted nor denied the Rule upon which the penalty is based, on December 21, 2022, a Panel of the Chicago Mercantile Exchange Business Conduct Committee found that on multiple occasions from February 3, 2020, through February 17, 2021, Grand impeded the Exchange’s investigation into trading activity of Grand’s customers by:
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failing to have appropriate policies and procedures pertaining to the creation, maintenance, and monitoring of operator IDs assigned to its customers;
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as a result of Grand permitting its customers to create their own operator IDs via a third-party software vendor, being unable to identify Globex Terminal Operators who used these operator IDs; and
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permitting, without remediation, multiple individuals to enter orders in the Australian Dollar, British Pound, Canadian Dollar, Swiss Franc, Mexican Peso, New Zealand Dollar, Japanese Yen, Euro FX, and E-mini S&P 500 contract markets using the same operator Ids.
The Panel found that by allowing its customers to repeatedly create operator IDs via the third-party software vendor, Grand removed its ability to identify and track those customers who sent messages to the Exchange under these operator IDs. The Panel therefore concluded that Grand thereby violated CME Rules 432.Q., 432.W., and 576.
In accordance with the settlement offer, the Panel ordered Grand to pay a $500,000 fine in connection with this case and companion cases CBOT 19-1220-BC, NYMEX 19-1220-BC, and COMEX 19-1220-BC ($160,000 of which is allocated to CME).