All Contracting Parties are subject to the same rules, terms and conditions relating to trading, clearing and settlement activities with NGX. Within its rules (the CPA) NGX has outlined a Code of Conduct to which Contracting Parties must adhere in relation to manipulative and anticompetitive trading practices, fraud and other unlawful activities.
NGX manages its own market surveillance initiatives, including monitoring Contracting Parties’ order and transaction activities to ensure these activities are conducted in a fair and transparent manner and in adherence with exchange rules and applicable regulations. Prohibited activities can include, but are not limited to, market manipulation or attempted market manipulation, distributing misinformation, wash trading, and money passing and engaging in collusive activities with other market participants or otherwise unlawfully constraining competition.
Inquiries & Investigations, Disciplinary Action, Hearing Process
In the event a suspected violation of the Code of Conduct is detected NGX may conduct initial inquiries with a Contracting Party for additional information, consulting NGX’s Chief Compliance Officer prior to launching a formal investigation. NGX will notify a Contracting Party prior to proceeding with an investigation.
Following an investigation, if a Contracting Party is found to have violated the Code of Conduct, NGX’s Chief Compliance Officer may issue a warning letter or may enter into a settlement agreement with the Contracting Party, subject to review by NGX’s Disciplinary Committee. Alternatively the Chief Compliance Officer may refer a decision on such matters directly to the Disciplinary Committee.
NGX’s Disciplinary Committee was established by the NGX Board of Directors and is comprised of three individuals, typically senior NGX personnel with a reasonably sufficient knowledge of trading and commodities and an understanding of NGX’s rules and the broader regulatory framework under which NGX operates. The Disciplinary Committee will be appointed by the NGX Board of Directors on an ad hoc basis, taking into account various considerations including (i) the availability of an individual to participate in disciplinary proceedings, (ii) the potential for a conflict of interest (real or perceived) due to the individual’s personal, business, or familial relationship with the Contracting Party of any of its Affiliates, including its directors, management, employees, representatives and consultants; and (iii) the relative experience and expertise of the individuals being considered for participation on the Disciplinary Committee.
The decision of the Disciplinary Committee is considered final, however a Contracting Party is permitted to appeal this decision to NGX’s Hearing Panel.