DirectEdge ECN LLC
Clearly Erroneous Transactions Policy

Definition & Terms

A Clearly Erroneous Transaction ("CET") is defined as the execution of an order: (i) at a price that is substantially away from, or inconsistent with, the current market for that security at the time of execution, and/or (ii) on terms (e.g., symbol, quantity of shares, price) that would reasonably appear to have been entered in error under the given circumstances.

Users of the DirectEdge ECN^sm are responsible for ensuring that the price and type of an order entered into the DirectEdge ECN^sm are appropriate under all laws, rules and regulations governing the securities markets and the client and its personnel. Use of the Direct Edge ECN^sm constitutes Client’s agreement to be bound by this CET Policy and its express acceptance of DirectEdge’s right to modify or cancel the terms of transactions executed through the Direct Edge ECN^sm in accordance with this CET Policy.

Transaction Reviews Requested by Clients

If a client enters an erroneous order that results in a CET, the client should contact the DirectEdge ECN^sm Client Services Desk and request that the transaction be reviewed pursuant to this CET Policy.

Clients should submit a request to review a transaction within 20 minutes of execution of such transaction. Requests received after 20 minutes may be reviewed depending on the facts and circumstances surrounding such request, however, DirectEdge reserves the right to decline to review any request submitted 20 minutes after execution. Once a request is filed, it cannot be withdrawn without the consent of both parties.  Transactions occurring at an away market center are decided upon by such away market center.

Transaction Reviews Initiated by DirectEdge

DirectEdge reserves the right to initiate a review of a transaction under this CET Policy, regardless of whether or not a client request has been submitted, if it determines in its sole discretion that circumstances warrant such a review, and may notify the client accordingly.

Criteria for Reviews and Determination

Upon request or upon their own initiation, designated principals of DirectEdge will review questionable transactions in light of the circumstances at the time of the transactions and with a view toward preserving the integrity of the marketplace and facilitating a fair and orderly market. Each request will be considered on a case-by-case basis.  A primary guideline includes:

During Pre- and Post-Market Hours:

• Executions greater than 10% away from the consolidated NBBO and/or last sale

During Market Hours (9:30 a.m. - 4:00 p.m. ET):

• Executions greater than 5% away from the consolidated NBBO and/or last sale

Direct Edge may consider factors in addition to the above guidelines including, but not limited to, transactions pursuant to an ISO order type and other market factors.

 

In the event that designated principals of DirectEdge ECN^sm determine that a reviewed transaction is a CET, said designated principals shall have the authority to declare that transaction null and void or modify one or more terms of the transaction, regardless of whether any party to such transaction has requested or desires such action.

A final determination generally will be made within one (1) hour of a request being submitted. In all cases, however, designated principals will make a final determination prior to the open of the next trading day following the request. DirectEdge will promptly provide oral notification of a determination to the parties involved in a disputed transaction.

Effective October 22, 2007