Clearly Erroneous Review Requests

For the full text, consult paragraph 11.13 of the EDGA and EDGX Rules.

Definition

The terms of a transaction are considered “clearly erroneous” when there is an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security.  A transaction determined by Direct Edge to be clearly erroneous will be removed from the Consolidated Tape.  Note that a market participant’s mere assertion that it made a mistake in entering an order or that it failed to pay attention to quotes and prices in the marketplace may be insufficient in establishing a transaction as clearly erroneous.

General Information

• Direct Edge requires all requests for review to be made via our Clearly Erroneous Online Filing Form.
• Requests for review must be received within thirty (30) minutes of execution time.
• Any additional written information requested by Direct Edge to aid in the resolution of the matter must be provided by each party to the transaction in question within thirty (30) minutes of the request.    

Numerical Guidelines

A transaction executed during the Regular Market Session or the Pre-Opening and Post-Closing Session will be deemed clearly erroneous if the price of the transaction to buy (sell) that is the subject of the complaint is greater than (less than) the Reference Price by an amount that equals or exceeds the Numerical Guidelines set forth below.  The Reference Price is equal to the consolidated last sale immediately prior to the execution(s) under review except for: (A) Multi-Stock Events involving twenty (20) or more securities; and (B) transactions not involving a Multi-Stock Event involving twenty (20) or more securities that trigger a trading pause in Original Circuit Breaker Securities and subsequent transactions, in which case the Reference Price is determined in accordance with EDGA and EDGX Rule 11.13.

Reference Price: Consolidated Last Sale	Regular Market Session Numerical Guidelines (Subject transaction's % difference from the Consolidated Last Sale):	Pre-Opening and Post-Closing Session Numerical Guidelines (Subject transaction's % difference from the Consolidated Last Sale):
Greater than $0.00 up to and including $25.00	10%	20%
Greater than $25.00 up to and including $50.00	5%	10%
Greater than $50.00	3%	6%
Multi-Stock Event - Filings involving five or more securities by the same subscriber will be aggregated into a single filing	10%	10%
Multi-Stock Event - Filings involving twenty or more securities whose executions occurred within a period of five minutes or less	30%	30%
Leveraged ETF/ETN Securities	Regular Market Session Numerical Guidelines multiplied by the leverage multiplier (e.g., 2x)	Regular Market Session Numerical Guidelines multiplied by the leverage multiplier (e.g., 2x)

Direct Edge may consider additional factors to determine whether an execution is clearly erroneous, including, but not limited to, systems malfunctions or disruptions, outlier transactions, volume and volatility for the security, derivative securities products that correspond to greater than 100% in the direction of a tracking index, news released for the security, whether trading in the security was recently halted/resumed, whether the security is an IPO, whether the security was subject to a stock-split, reorganization, or other corporate action, overall market conditions, Pre-Opening and Post-Closing Session executions, validity of the consolidated tape’s trades and quotes, consideration of primary market indications and executions inconsistent with the trading pattern of the stock.  Each additional factor will be considered with a view toward maintaining a fair and orderly market and the protection of investors and the public interest.

Securities Subject to Limit Up-Limit Down Plan

For purposes of this paragraph, the phrase "Limit Up-Limit Down Plan" or "Plan" shall mean the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS.  If as a result of a technology or systems issue any transaction occurs outside of the applicable price bands disseminated pursuant to the Plan, an Officer of Direct Edge or senior level employee designee, acting on his or her own motion or at the request of a third party, shall review and declare any such trades null and void.  This may occur even if the execution occurred at a price that does not exceed the Numerical Guidelines outlined above.

Reviews Initiated by Direct Edge

Direct Edge maintains the discretion to review potentially erroneous executions if it determines that circumstances warrant such a review.

Appeals

Requests for review on appeal of an eligible transaction will be handled by the Clearly Erroneous Execution Panel.  A request for review on appeal must be made via e-mail within thirty (30) minutes after the party making the appeal is given notification of the initial determination being appealed.  If the CEE Panel votes to uphold the previous decision, Direct Edge will assess a $500.00 fee against the Member(s) who initiated the request for appeal.  Note that certain decisions are not appealable based on the need to maintain a fair and orderly market and to protect investors and the public interest.

Additional Information

For additional information, consult our EDGA and EDGX Rules or contact 1.201.942.8220, option #1.