Page 458 - 《期货和衍生品行业监管动态》（2022年合集）

期货和衍生品行业监管动态

CFTC Orders Two Chinese Companies to Pay $720,000 for Wash Trading,
Position Limit Violations, and Reporting Failures (2022/9/23)

The Commodity Futures Trading Commission today issued an order

simultaneously filing and settling charges against Beijing-based COFCO Corp. and

Chinatex Corp., Ltd., for wash trading, position limit violations, and reporting

failures.

The order requires that COFCO and Chinatex pay a $720,000 civil monetary

penalty, for which they are jointly and severally liable, and cease and desist from

violating the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

Case Background

The order finds that between April 22 and May 1, 2020, Chinatex traders

engaged in wash trading in order to liquidate a long position in the account of an
affiliated company and re-establish the position in its own account, to the ultimate

benefit of its parent company, COFCO. The traders accomplished this by entering

purchase orders for ICE Cotton No. 2 futures in Chinatex’s account, while at the same

time entering offsetting sale orders in the account of an affiliate. The offsetting orders

were for the same delivery month, and at prices that were typically within one price

tick of each other. The traders structured the orders to ensure that one set of offsetting

orders were filled before entering the next set. The orders were not intended to take a

bona fide position in the market, but rather to liquidate and re-establish a position

while minimizing risk and price competition.

The order also finds COFCO liable for speculative position limit violations while

trading ICE Cotton No. 2 futures contracts. According to the order, in March 2020,

various aggregated subsidiaries of COFCO held net short positions in excess of the

5,000-contract single- and all-month position limits then applicable. Similarly, in

November 2021, several subsidiaries of COFCO held net short positions in excess of
the 5,950-contract single-month position limit then applicable. The subsidiaries also

failed to file certain required reports accurately reflecting their cash-market exposure.

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