CME Group has announced a disciplinary action against TFS Derivatives HK Limited, resulting in a $60,000 fine due to regulatory violations. The disciplinary panel ruled that TFS Derivatives was found to have submitted inaccurate block trade execution times and failed to report these trades within the required timeframe for several weeks, spanning from November 2023 to May 2024, specifically in the context of E-Mini S&P 500 futures and options on futures markets.
The investigation revealed that TFS Derivatives lacked sufficient employee supervision and did not provide adequate guidance for reporting block trades. This absence of oversight led to violations of the trading rules set by the exchange. The relevant CME regulations referenced include Rule 526, 526.F, and 432.W, all of which were designed to ensure the accuracy and timely reporting of trade activities.
As part of a settlement agreement, TFS Derivatives neither accepted nor contested the factual findings which led to the penalty. The imposed fine serves as a reminder of the importance of compliance in trading practices and the necessity for firms to maintain robust operational controls and effective supervision of their personnel.