UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

In the Matter of: 

CHALLENGER LIFE COMPANY 

LIMITED, 

Respondent. 

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CFTC Docket No. 23-29

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTION 6(c) AND (d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS, AND IMPOSING REMEDIAL SANCTIONS

I. INTRODUCTION

The Commodity Futures Trading Commission (“Commission” or “CFTC”) has reason to 

believe that, as set forth below, on specific days from March 30, 2022 to May 9, 2022 (the 

“Relevant Period”), Challenger Life Company Limited (“Respondent”) violated Sections 

4a(b)(2) and (e) of the Commodity Exchange Act (“Act”), 7 U.S.C. §§ 6a(b)(2), (e) and 

Commission Regulation (“Regulation”) 150.2, 17 C.F.R. § 150.2 (2022). Therefore, the 

Commission deems it appropriate and in the public interest that public administrative 

proceedings be, and hereby are, instituted to determine whether Respondent engaged in the 

violations set forth herein and to determine whether any order should be issued imposing 

remedial sanctions. 

In anticipation of the institution of an administrative proceeding, Respondent has 

submitted an Offer of Settlement (“Offer”), which the Commission has determined to accept. 

Without admitting or denying any of the findings or conclusions herein, Respondent consents to 

the entry of this Order Instituting Proceedings Pursuant to Section 6(c) and (d) of the Commodity 

Exchange Act, Making Findings, and Imposing Remedial Sanctions (“Order”), and 

acknowledges service of this Order.1

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 Respondent consents to the use of the findings of fact and conclusions of law in this Order in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party or claimant, and agrees 

that they shall be taken as true and correct and be given preclusive effect therein, without further proof. Respondent

does not consent, however, to the use of this Order, or the findings or conclusions herein, as the sole basis for any 

other proceeding brought by the Commission or to which the Commission is a party or claimant, other than: a 

proceeding in bankruptcy or receivership; or a proceeding to enforce the terms of this Order. Respondent does not 

consent to the use of the Offer or this Order, or the findings or conclusions in this Order, by any other party in any 

other proceeding.
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II. FINDINGS 

The Commission finds the following: 

A. SUMMARY 

On March 30, 2022, Challenger Life held a position in the New York Mercantile 

Exchange’s (“NYMEX” or “Exchange”) April 2022 Platinum futures contracts that exceeded the 

spot-month speculative position limit for that contract set forth in Regulation 150.2, 17 C.F.R. 

§ 150.2 (2022), and Appendix E to Part 150 of the Regulations, 17 C.F.R. pt. 150 app. E (2022). 

By this conduct, Challenger Life violated Section 4a(b)(2) of the Act, 7 U.S.C. § 6a(b)(2), and 

Regulation 150.2. 

In addition, as of March 31, 2022 and May 9, 2022, Challenger Life exceeded the 500-

contract delivery limit for the April 2022 and May 2022 Platinum futures contracts, respectively, 

set by NYMEX Rule 562. Those violations of NYMEX Rule 562 also constituted violations of 

Section 4a(e) of the Act, 7 U.S.C. § 6a(e). 

B. RESPONDENT

Challenger Life Company Limited is an Australian-based company and provider of 

annuities. Challenger Life is not registered with the Commission in any capacity. 

C. FACTS 

Regulation 150.2, 17 C.F.R. § 150.2 (2022), and Appendix E to Part 150 of the 

Regulations, 17 C.F.R. pt. 150 app. E, set forth speculative position limit levels for NYMEX 

Platinum futures contracts. Pursuant to Regulation 150.2, no person may hold more than 500 

NYMEX Platinum futures contracts (on a net futures-equivalent basis) during the contract spot 

month. Regulation 150.1 defines “spot month,” in relevant part, as the period of time beginning 

at the earlier of “(i) [t]he close of business on the trading day preceding the first day on which 

delivery notices can be issued by the clearing organization of a contract market or (ii) [t]he close 

of business on the trading day preceding the third-to-last trading day and ending when the 

contract expires.” 

The spot month for the April 2022 NYMEX Platinum futures contract was from March 

30, 2022 through April 27, 2022. At the close of business on March 30, 2022, Challenger Life 

held a net long futures position of 874 contracts in the NYMEX April 2022 Platinum futures 

contract, exceeding the applicable limit. Challenger Life did not qualify for an exemption under 

Regulation 150.3, 17 C.F.R. § 150.3 (2022), and therefore was not permitted to exceed the 

position limit set forth in Regulation 150.2. 

Separately, pursuant to NYMEX Rule 562, a market participant may not make (issue) or 

take (stop) delivery of more than 500 net futures-equivalent NYMEX Platinum futures contracts 

unless they have received a hedge exemption from the Exchange. 

On March 30, 2022, Challenger Life was stopped for delivery on 700 NYMEX April 

2022 Platinum futures contracts and thus exceeded NYMEX’s delivery limit of 500 contracts. 
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Challenger Life failed to retender the excess 200 certificates by the close of the next business 

day, and thus exceeded NYMEX’s Platinum futures expiration-month delivery limit of 500 

contracts by 200 contracts.2 On March 31, 2022, Challenger Life was stopped for delivery on 72 

additional contracts, and Challenger Life failed to retender those additional certificates, or the 

preexisting excess 200 certificates, by the close of the next business day. Consequently, 

Challenger Life exceeded NYMEX’s Platinum futures expiration-month delivery limit of 500 

contracts by 272 contracts. Additionally, with respect to the May 2022 NYMEX Platinum 

futures contract, as of May 9, 2022, Challenger Life had notified NYMEX of its intent to deliver 

on 536 contracts of NYMEX Platinum futures, thus again exceeding NYMEX’s delivery limit. 

III. LEGAL DISCUSSION 

A. Challenger Life Violated CFTC Spot Month Position Limits 

Section 4a(b)(2) of the CEA makes it unlawful for any person “directly or indirectly to 

hold or control a net long or a net short position in any commodity for future delivery on or 

subject to the rules of any contract market . . . in excess of any position limit fixed by the 

Commission for or with respect to such commodity. . . .” 7 U.S.C. § 6a(b)(2). Pursuant to 

Regulation 150.2 and Appendix E to Part 150 of the Regulations, no person may hold NYMEX 

Platinum futures positions during the spot month, net long or short, in excess of 500 contracts 

unless they qualify for an exemption under Regulation 150.3. 17 C.F.R. §§ 150.2, 150.3, pt. 150 

app. E (2022). Challenger Life did not qualify for an exemption under Regulation 150.3 and 

therefore was not permitted to exceed the Commission’s position limit in NYMEX Platinum 

futures contracts. 

On March 30, 2022, Challenger Life held a long NYMEX April 2022 Platinum futures 

contract position in excess of 500 contracts. Because Challenger Life did not qualify for any 

exemption under Regulation 150.3, Challenger Life violated Section 4a(b)(2) of the Act and 

Regulation 150.2. 

The Commission does not need to establish scienter—i.e., proof of intent to exceed the 

applicable speculative position limit—in order to prove a violation of the Commission’s 

speculative position limit provisions. CFTC v. Hunt, 591 F.2d 1211, 1218 (7th Cir. 1979); Saberi 

v. CFTC, 488 F.3d 1207, 1212 (9th Cir. 2007). The Act “unambiguously imposes liability” for 

violations of speculative position limits. Saberi, 488 F.3d at 1212. 

B. Challenger Life Violated NYMEX’s Position Limits 

Section 4a(e) of the Act makes it unlawful for any person “to violate any bylaw, rule, 

regulation, or resolution of any contract market. . . designated . . . by the Commission fixing 

limits on . . . positions which may be held by any person under contracts of sale of any 

 

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According to CME Group’s Market Regulation Advisory Notice, effective January 4, 2022, regarding Exchange 

position limits and accountability levels, including Rule 562: “[i]f a person stops certificates for delivery in a 

quantity that would cause such person to exceed the certificate limit, the person must retender the quantity of 

certificates in excess of the limit no later than the close of business on the following business day. Failure to do so 

constitutes a position limit violation.” CME Group Market Regulation Advisory Notice RA2117-5 (effective Jan. 4, 

2022). 
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commodity for future delivery . . . if such bylaw, rule, regulation, or resolution has been 

approved by the Commission or certified by a registered entity pursuant to section 5c(c)(1) . . . .” 

7 U.S.C. § 7a-2(c)(1) (2018). 

Pursuant to NYMEX Rule 562, a person may not make (issue) or take (stop) delivery of 

more than 500 net futures-equivalent contracts during the spot month in NYMEX Platinum 

futures contracts unless they have received a hedge exemption from the Exchange. See NYMEX 

Rule 562 (Position Limit, Position Accountability and Reportable Level Table, NYMEX 

Rulebook, Chapter 5); NYMEX Rule 105102.D; CME Group Market Regulation Advisory 

Notice RA2117-5 (effective Jan. 4, 2022). By exceeding the delivery limit in the NYMEX April 

2022 and May 2022 Platinum futures contracts, as of March 31 and May 9, 2022, respectively, 

Challenger Life violated NYMEX Rule 562. Challenger Life’s violation of NYMEX Rule 562 

also constituted a violation of Section 4a(e) of the Act. 

The plain language of Section 4a(e) of the Act unambiguously imposes liability for 

violations of designated contract market position limit rules such as those at issue here. Saberi, 

488 F.3d at 1212 (rejecting argument that proof of intent was required to establish violation of 

contract market’s position limits) (citing Hunt, 591 F.2d at 1218). 

IV. FINDINGS OF VIOLATION 

Based on the foregoing, the Commission finds that, during the Relevant Period, 

Respondent violated Sections 4a(b)(2) and (e) of the Act, 7 U.S.C. §§ 6a(b)(2), (e) and 

Regulation 150.2, 17 C.F.R. § 150.2 (2022). 

V. OFFER OF SETTLEMENT 

Respondent has submitted the Offer in which it, without admitting or denying the 

findings and conclusions herein: 

A. Acknowledges service of this Order; 

B. Admits the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waives: 

1. The filing and service of a complaint and notice of hearing; 

2. A hearing; 

3. All post-hearing procedures; 

4. Judicial review by any court; 

5. Any and all objections to the participation by any member of the Commission’s 

staff in the Commission’s consideration of the Offer; 
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6. Any and all claims that it may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504, and 28 U.S.C. § 2412, and/or the rules promulgated by the 

Commission in conformity therewith, Part 148 of the Regulations, 17 C.F.R. 

pt. 148, relating to, or arising from, this proceeding; 

7. Any and all claims that it may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, §§ 201–253, 110 

Stat. 847, 857–74 (codified as amended at 28 U.S.C. § 2412 and in scattered 

sections of 5 U.S.C. and 15 U.S.C.), relating to, or arising from, this proceeding; 

and 

8. Any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief, including this Order; 

D. Stipulates that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondents has consented in the Offer; and 

E. Consents, solely on the basis of the Offer, to the Commission’s entry of this Order that: 

1. Makes findings by the Commission that Respondent violated Sections 4a(b)(2) and 

(e) of the Act and Regulation 150.2; 

2. Orders Respondent to cease and desist from violating Sections 4a(b)(2) and (e) of 

the Act and Regulation 150.2; 

3. Orders Respondent to pay a civil monetary penalty in the amount of one hundred 

fifty thousand dollars ($150,000), plus any post-judgment interest; and 

4. Orders Respondent and its successors and assigns to comply with the conditions 

and undertakings consented to in the Offer and as set forth in Part VI of this Order. 

Upon consideration, the Commission has determined to accept the Offer. 

VI. ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondent shall cease and desist from violating Sections 4a(b)(2) and (e) of the Act and 

Regulation 150.2.

B. Respondent shall pay a civil monetary penalty in the amount of one hundred fifty 

thousand dollars ($150,000) (“CMP Obligation”). If the CMP Obligation is not paid 

immediately in full, then post-judgment interest shall accrue on the unpaid portion of the 

CMP Obligation beginning on the date of entry of this Order and shall be determined by 

using the Treasury Bill rate prevailing on the date of entry of this Order pursuant to 28 

U.S.C. § 1961. 
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Respondent shall pay the CMP Obligation and any post-judgment interest by electronic 

funds transfer, U.S. postal money order, certified check, bank cashier’s check, or bank 

money order. If payment is to be made other than by electronic funds transfer, then the 

payment shall be made payable to the Commodity Futures Trading Commission and sent 

to the address below:

MMAC/ESC/AMK326

Commodity Futures Trading Commission 

6500 S. MacArthur Blvd. 

HQ Room 266 

Oklahoma City, OK 73169 

9-amz-ar-cftc@faa.gov 

 If payment is to be made by electronic funds transfer, Respondent shall contact Tonia 

King or her successor at the above address to receive payment instructions and shall fully 

comply with those instructions. Respondent shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondent and the name and 

docket number of this proceeding. The paying Respondent shall simultaneously transmit 

copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

C. Respondent and its successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. Public Statements: Respondent agrees that neither it nor any of its successors and 

assigns, agents or employees under its authority or control shall take any action or 

make any public statement denying, directly or indirectly, any findings or 

conclusions in the Order or creating, or tending to create, the impression that the 

Order is without a factual basis; provided, however, that nothing in this provision 

shall affect Respondent’s: (i) testimonial obligations; or (ii) right to take legal 

positions in other proceedings to which the Commission is not a party. 

Respondent and its successors and assigns shall comply with this agreement, and 

shall undertake all steps necessary to ensure that all of its agents and/or 

employees under its authority or control understand and comply with this 

agreement. 

2. Cooperation: Respondent shall cooperate fully and expeditiously with the 

Commission, including the Commission’s Division of Enforcement, in this action, 

and in any current or future Commission investigation or action related thereto. 

Respondent shall also cooperate in any investigation, civil litigation, or 

administrative matter related to, or arising from, the subject matter of this action.

3. Partial Satisfaction: Respondent understands and agrees that any acceptance by 

the Commission of any partial payment of Respondent’s CMP Obligation shall 

not be deemed a waiver of its obligation to make further payments pursuant to the