(The following is a reformatted version of a press release
issued by Chicago Board of Trade and received via electronic
mail. The release was confirmed by the sender.)
CHICAGO BOARD OF TRADE EXCHANGE
NOTICE OF DISCIPLINARY ACTION
FILE NO.: CBOT 11-8060-BC
MEMBER: Nomura Securities International, Inc.
VIOLATIONS: (Legacy) Rule 526 Block Trades (in part)
F. The seller must ensure that each block trade is reported to
the Exchange within five minutes of the time of execution;
except that block trades in interest rate futures and options
executed outside of Regular Trading Hours (7:00 a.m. - 4:00 p.m.
Central Time, Monday - Friday on regular business days) must be
reported within fifteen minutes of the time of execution. 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.
Rule 536. Recording Requirements for Pit, Globex and Negotiated
A. At the time of execution, every order received from a
customer must be in the form of a written or electronic record
and include an electronic timestamp reflecting the date and time
such order was received on the floor of the Exchange and, except
as provided in Section C, must identify the specific account(s)
for which the order was placed. Such record shall also include
an electronic timestamp reflecting the date and time such order
was modified, returned, confirmed or cancelled.
Pursuant to an offer of settlement in which Nomura Securities
International, Inc. (“Nomura”) neither admitted nor denied the
rule violations upon which the penalty is based, on April 30,
2014, a panel of the Chicago Board of Trade (“CBOT”) Business
Conduct Committee found that it has jurisdiction over Nomura
because it is a CBOT member and on two separate occasions in
2010 and a third occasion in 2011, Nomura employees executed
block trades in the U.S. Treasury Note Futures contracts, and
did not report the trades to the Exchange within five minutes of
the time of execution. During the same time frame, Nomura,
through its employees, reported to the Exchange inaccurate
execution times of the block trades. The Panel also found that
Nomura failed to maintain accurate records with respect to block
trade executions. The Panel concluded that Nomura thereby
violated CBOT (Legacy) Rule 526.F. and Rule 536.A.
In accordance with the settlement offer the Panel fined Nomura
Securities Inc., $30,000.
EFFECTIVE DATE: May 2, 2014
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