CME Group fines three firms for automated trading violations

Fri Dec 19, 2014 1:35pm EST
 
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CHICAGO Dec 19 (Reuters) - CME Group Inc on Friday fined three Chicago-based proprietary trading firms for violations stemming from problems with automated trading systems.

The firms, 303 Proprietary Trading, Allston Trading and Traditum Group, had no immediate comment or declined to comment.

CME Group ordered 303 Proprietary Trading to pay $75,000 after an algorithmic trading group employed by the firm sent more than 27,000 messages in less than two seconds on the exchange operator's electronic trading platform, known as Globex, according to a disciplinary notice.

The flood of messages in May 2013 caused the cancellation of about 2,000 orders and "resulted in the exchange initiating a port closure and a failure of a Globex gateway," the notice said.

CME Group, the world's largest futures market operator, fined Allston and Traditum $35,000 each.

Allston suffered a software failure in October 2012 that allowed an automated trading system to enter excessive order and cancellation messages in Federal Funds futures over an hour, according to a disciplinary notice.

In November 2011, a malfunctioning automated trading system used by Traditum executed transactions in Canadian Dollar futures, causing a significant spike in volume, CME said in a notice, adding that the firm subsequently enhanced its risk control policies. (Reporting by Tom Polansek; Editing by Bernard Orr)