ICE Futures U.S. agreed to settle a number of disciplinary actions arising from alleged violations of its block trade and position reporting rules, among other matters. In two apparently related actions, BP Energy Company and EOX Holdings, LLC were charged for violating prohibitions against accommodation trades and transacting block trades at prices that were not “fair and reasonable.” In both of these actions, IFUS said that an employee of each firm transacted a buy and sell trade “to correct an erroneous allocation and move a position from one proprietary account belonging to the counterparty to another proprietary account belonging to the counterparty.” The two respondents agreed to pay fines in aggregate of US $32,500. Separately, SG Americas Securities, LLC agreed to pay a fine of US $100,000 for allegedly not reporting correct open interest in three futures contracts from May 29 through June 27, 2014. Likewise, Barclays Capital, Inc., settled allegations that it failed to accurately report open interest on three last trading days and expiration dates for one energy futures contract in October, November and December 2014. The firm agreed to pay a fine of US $20,000 to resolve this matter.
Compliance Weeds: Accommodation trades are typically transactions entered into by a trader to assist another trader with prohibited transactions. Such trades are prohibited under applicable law (click here to access Commodity Exchange Act §4c(a)(2)(i)) and exchange rules (click here, e.g., to access IFUS rule 4.02(c) and here for Chicago Mercantile Exchange rule 534).