The CBOE Futures Exchange brought disciplinary actions against three members – Banco Santander SA, Phillip Futures Pte Ltd. and Raiffeisen Bank International AG – for allegedly failing to timely file CFTC Forms 102 within three days of establishing a large trader position, as required, and against the same three members and Macquarie Bank Ltd. for purportedly not reporting to CFE for multiple months reports of large trader positions electronically via the Securities Industry Automation Corporation, as also mandated by the exchange. Each of the firms agreed to pay a fine of US $15,000 to resolve its disciplinary action. Separately, Eagle Seven LLC also agreed to pay CFE US $15,000 to resolve a claim that on “several occasions” during March and April 2014, the firm allegedly entered orders for CBOE Volatility index future contracts prior to the pre-open session that were rejected by the exchange, which the firm purportedly knew would be rejected. According to CFE, this practice was inconsistent with just and equitable principles of trade.
Compliance Weeds: CFE’s disciplinary actions regarding late filings of CFTC Forms 102 serve as a reminder that the deadline for futures commission merchants to begin filing electronically revised Forms 102A and 102B (information regarding large traders and volume threshold traders) is rapidly approaching. Temporary relief by the Commodity Futures Trading Commission from filing the new forms expires as of September 30, 2015. A helpful reminder to clients of what information they should be providing to FCMs either directly or through a Futures Industry Association portal can be found on the FIA’s website (click here to access). (Click here for further information on CFTC ownership and control reporting in the article “CFTC Postpones OCR Roll-out; CME Group and ICE Futures U.S. Adopt Conforming Amendments” in the February 15, 2015 edition of Bridging the Week.)