TFS Energy Derivatives gets a slap on the wrist for alleged violations of CME rules
International derivatives marketplace CME Group has posted a notice of summary action against TFS Energy Derivatives.
On eight occasions in April 2023, TFS Energy Derivatives did not report block trades timely and on two occasions did not report block trades with an accurate execution time to the Exchange. These block trades were executed in January 2024 through April 2024 USD Malaysian Crude Palm Oil Calendar Futures and July 2023 through September 2023 USD Malaysian Crude Palm Oil Futures.
Pursuant to Rule 512, a fine in the amount of $2,000 was assessed against TFS Energy Derivatives for its violations of CME Rule 526.F.
The relevant CME rules state:
526.F. BLOCK TRADES
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.
MRAN RA-2204-5 (in part)
Market participants must accurately report the execution time of the block trade.
The notice is effective June 16, 2023.