Marquette Partners agreed to pay a fine of US $20,000 to resolve a disciplinary action brought by ICE Futures U.S. because of an alleged malfunction in an automated trade system it operated from January 23 through March 9, 2015. During this time, on “numerous occasions,” Marquette’s ATS allegedly entered orders in back months of cocoa futures then rapidly deleted such orders and immediately placed new orders all within one-thousandth of a second. Separately, the New York Mercantile Exchange summarily denied access to all CME Group markets to Eldorado Trading Group LLC for allegedly engaging in certain disruptive trading-type activities on numerous dates beginning in December 2016. According to NYMEX, Eldorado would knowingly place trading at settlement orders in multiple products with incomplete and wrong information in the “sender location” (Tag 142) field, gain queue priority when the TAS market opened, then modify the problematic data to correct it. (Click here for background on Tag 142.) This conduct continued, said NYMEX, even after the exchange warned Eldorado to stop it on December 22, 2016. Unrelatedly, a NYMEX business conduct committee also fined Hong Kong Weiye Industry Ltd. US $50,000 and suspended its access to all CME Group markets for not responding to exchange requests for information in connection with an investigation and settled charges against QuantRes Asset Management Ltd. for payment of a fine of US $40,000 for the firm’s alleged position limit violations in Henry Hub natural gas futures on three days in September 2016.
Compliance Weeds: TAS transactions permit trades to be executed during the trading day at the current day’s settlement price or in prescribed price increments above or below such price. Basis Trade at Index Close and Trade at Market transactions are analogous trades that permit executions at currently unknown prices. Each type of transaction, when available, is limited to certain products and times, and is subject to ordinary prohibitions against price manipulation or attempted price manipulation, disruptive trading, wash trading, and other violative conduct. (Click here for background in a relevant CME Group Market Regulation Advisory Notice and here for an ICE Futures U.S. TAS Frequently Asked Questions.)