Welcome to NASDAQtrader.com for Options and Futures

Friday, May 08, 2015

Futures Regulatory Alert #2015 - 6
Summary Fines for Reporting Infractions

Category:

  • System Impact

Markets Impacted:

Contact Information:

Resources:

Nasdaq Futures, Inc. ("NFX" or "Exchange") Rules at Chapter VI, Section 6 permit the Exchange to commence summary disciplinary proceedings for Futures Participants that fail to file reports or records completely, accurately and in a timely manner.

The following reports are subject to sanctions under Chapter IV, Section 6 including, but not limited to, deficiencies related to the following submissions:

  • Large Trader Reporting
  • Open Interest Reporting
  • Block Trade Reporting
  • Exchange for Related Positions Reporting
  • Failure to properly identify an Order:
    • Unique Identifier set by the client – CIOordID (Tag 11) Party Identifier – PartyID (Tag 448)
    • Capacity of Customer Placing the Order – CustOrderCapacity (Tag 582)
    • Type of Business Conducted – OrderCapacity (Tag 528)

NFX Rules at Chapter VI, Section 6 require that all data, records and other information required to be reported to the Exchange be submitted in an accurate, complete and timely manner. This Rule authorizes the Exchange to issue a summary fined based on inaccurate, incomplete, or untimely submission of data or records. The summary fines are not less than $1,000 or in excess of $2,500 per offense.

For the purpose of imposing fines pursuant to this Rule, the Exchange may aggregate individual violations of particular Rules of the Exchange and treat such violations as a single offense. In other instances, the Exchange may, if no exceptional circumstances are present, impose a fine based upon a determination that there exists a pattern or practice of volatile conduct. The Exchange also may aggregate similar violations generally if the conduct was unintentional, there was no injury to public investors or where the violations resulted from a single problem or cause that has been corrected.

The Exchange may, in its discretion, issue warning letters for a first offense. However, consistent with CFTC regulations, no more than one warning letter will be issued to an individual or entity for the same offense within a rolling 12-month period. Factors which may affect the amount of the sanction, pursuant to Chapter VI, Section 6, include the magnitude, frequency and impact of the reporting infraction, the party’s prior disciplinary history for similar infractions and remedial actions taken to correct the identified reporting issues. The Exchange, in its discretion, may refer matters that it deems egregious to the Business Conduct Committee (“BCC”).

Chapter VI, Section 6 Summary Disciplinary Proceedings

The following new fine schedule will apply to certain reporting violations:

Failure to Report Large Trader or Open Interest

All data, records, and other information required by Exchange Rules to be reported to the Exchange must be submitted in an accurate, complete and timely manner.  For purposes of this Rule, information received within one (1) business day will be deemed to meet the requirement of prompt compliance.

FINE SCHEDULE (Implemented on a three year running calendar basis).

1st Occurrence
$1,000.00
2nd Occurrence
$2,500.00
3rd Occurrence Sanction is discretionary with Business Conduct Committee

Failure to Comply with Order Marking Requirement for Block Trades and Exchange for Related Positions (Chapter IV, Section 11 and 12)

All data, records, and other information required by Exchange Rules to be reported to the Exchange must be submitted in an accurate, complete and timely manner. For purposes of this Rule, correct information must be received upon Block Trade and Exchange for Related Positions submission.

FINE SCHEDULE (Implemented on a three year running calendar basis).

1st Occurrence
$1,000.00
2nd Occurrence
$2,500.00
3rd Occurrence Sanction is discretionary with Business Conduct Committee

Failure to Provide the Correct Order ID, Party Identifier or, Capacity of Customer Placing the Order or Type of Business Conducted

All data, records, and other information required by Exchange Rules to be reported to the Exchange must be submitted in an accurate, complete and timely manner. For purposes of this Rule, correct information must be received upon Order entry.

FINE SCHEDULE (Implemented on a three year running calendar basis).

1st Occurrence
$1,000.00
2nd Occurrence
$2,500.00
3rd Occurrence Sanction is discretionary with Business Conduct Committee

 





Please follow Nasdaq on Facebook RSS and Twitter.

Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.