NEW YORK, Oct 14 (Reuters) - A division of OlamInternational Ltd has agreed to pay $100,000 as apenalty to settle potential violations of the ICE Futures U.S."cash and carry" rule for the September 2011 cocoa futurescontract, the exchange said on Monday.
Olam neither admitted nor denied any rule violations and hasagreed to pay the penalty and to cease and desist from futureviolations of the rule, according to an emailed statement fromthe IntercontinentalExchange.
Olam Americas did not immediately respond to requests forcomment.
A subcommittee previously determined that Olam Americas mayhave violated ICE's "cash and carry" exemption twice inSeptember 2011 just prior to the last trading day for thecontract, according to the ICE notice.
The rule helps maintain a market contango, in which theprice of a futures contract for a commodity exceeds the spotprice, in situations where there are plentiful supplies. Whenusing the exemption, a trader must liquidate all long positionsin a spot month when the nearby contract rises to a premiumabove the second-month contract.
- Commodity Markets