The CME Group has recently initiated a disciplinary action against StoneX Financial Inc. following a breach of rules associated with the New York Mercantile Exchange (NYMEX). The action arises from an incident dated November 26, 2024, concerning the December 2024 Henry Hub Natural Gas futures contract.
During that period, StoneX held a short position for one of its customers that extended through to the end of trading on this contract. The issue at hand is that StoneX should have recognized that its customer was unable to fulfill delivery requirements. As a result, the company failed to liquidate the customer’s position before the contract expiration, leading to the violation of NYMEX Rule 716.
In response to this violation, the NYMEX Business Conduct Committee’s panel reached a resolution whereby StoneX opted for a settlement that included neither admitting nor denying the infractions or the facts leading to the penalty. Consequently, the panel has imposed a monetary penalty of $20,000 on StoneX.
This ruling emphasizes the importance of compliance with procedural rules, particularly in derivatives trading, where firms are expected to be diligent in their oversight of client positions to mitigate risks and ensure market integrity. The decision underscores the regulatory framework’s role in maintaining order within the financial markets.