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Washington, D.C. — The Commodity Futures Buying and selling Fee right this moment issued an order concurrently submitting and settling prices towards BBL Commodities LP (BBL), a New York-based CFTC-registered commodity buying and selling advisor (CTA) and commodity pool operator (CPO). The order finds that BBL failed to ascertain and implement an sufficient supervisory system to detect whether or not its staff have been partaking in disruptive buying and selling or for deterring its staff from such conduct.
The CFTC order requires BBL to pay a $400,000 civil financial penalty and to stop and desist from additional supervision violations, as charged.
Case Background
The order finds that since at the very least December 2017 to the current, BBL didn’t keep an sufficient supervisory system with respect to doubtlessly disruptive buying and selling. Consequently, BBL engaged in buying and selling on December 29, 2017 in Gasoil futures calendar spreads on ICE Futures Europe (a international board of commerce registered with the CFTC) that ICE Futures Europe decided—in reference to the settlement of a disciplinary motion towards BBL’s executing dealer—to be disruptive, reckless, and disorderly.
As detailed within the order, BBL’s insurance policies and procedures didn’t particularly tackle doubtlessly disruptive buying and selling, and BBL lacked written insurance policies or procedures for the detection and deterrence of disruptive buying and selling by its staff or directing the implementation of the agency’s buying and selling methods in such a way as to keep away from disruptive buying and selling. Nor did BBL’s written insurance policies and procedures present any steering to BBL employees with respect to assessing the potential disruptive impression of BBL’s orders; assessing liquidity previous to inserting orders; describing acceptable or inappropriate buying and selling throughout settlement durations; or mitigating the potential disruptive impression of BBL’s orders. Though BBL additionally performed annual coaching, that coaching didn’t present sufficient steering to BBL personnel with respect to doubtlessly disruptive buying and selling.
Because of these supervision failures, on December 27, 2017, BBL positioned a big order with the BBL’s executing dealer to be executed within the remaining minutes of the settlement interval on December 29, 2017—and selected December 28, 2018 to extend the order dimension—with out adequately contemplating the potential disruptive impression of BBL’s buying and selling.
The Division of Enforcement employees members chargeable for this matter are W. Derek Shakabpa, Elizabeth C. Brennan, Trevor Kokal, R. Stephen Painter, Jr., Lenel Hickson, Jr., and Manal M. Sultan.
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