Clearly Erroneous Trade Policy

A Clearly Erroneous Trade is when there is an obvious error in any term, such as price, number of shares or other unit of trading defined as an execution at a price, for a quantity of shares, or with a symbol, that is substantially inconsistent with the current trading pattern of the issue. A transaction made in clearly erroneous error and cancelled by both parties or determined by CODA MARKETS to be clearly erroneous will be removed from the Consolidated Tape.

A subscriber that receives an execution on an order that was submitted erroneously to the CODA MARKETS for its own or customer account may request that CODA MARKETS review the transaction. An officer of the ATS or such other employee designee of the ATS shall review the transaction under dispute and determine whether it is clearly erroneous, with a view toward maintaining a fair and orderly market and the protection of investors and the public interest. Such request for review shall be made in writing via email or other electronic means.

Requests for review shall be received by CODA MARKETS within thirty (30) minutes of execution time and shall include information concerning the time of the transaction(s), security symbol(s), number of shares, price(s), side (bought or sold), and factual basis for believing that the trade is clearly erroneous. Upon receipt of a timely filed request these guidelines, the counterparty to the trade, if any, shall be notified by CODA MARKETS as soon as practicable, but generally within thirty (30) minutes. CODA MARKETS may request additional supporting written information to aid in the resolution of the matter. If requested, each party to the transaction shall provide any supporting written information as may be reasonably requested by the CODA MARKETS to aid resolution of the matter within thirty (30) minutes of CODA MARKETS’ request. Either party may request the supporting written information provided by the other party on the matter.

Numerical Guidelines

Under the uniform guidelines, a transaction executed during the pre-market trading session, the core trading session and post-market trading session may be found to be clearly erroneous only if the price of the transaction to buy is greater, or less in the case of a sale, than the Reference Price by an amount that equals or exceeds the Numerical Guidelines for a particular transaction category (as set forth below).

CODA MARKETS will generally use the consolidated last sale as the Reference Price to determine whether a trade is clearly erroneous. The execution time of the transaction under review determines which Numerical Guideline is applied. The chart below outlines the details.

Reference Price: Consolidated Last Sale

Core Trading Session Numerical Guidelines (Subject transaction’s % difference from the Consolidated Last Sale):

Pre-market and Post-market Trading 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

Core Trading Session Numerical Guidelines multiplied by the leverage multiplier (e.g., 2x)

Core Trading Session Numerical Guidelines multiplied by the leverage multiplier (e.g., 2x)

CODA MARKETS may consider additional factors to determine whether an execution is clearly erroneous. These factors include, but are not limited to, system malfunctions or disruptions, 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-market and post-market session executions, validity of the consolidated tapes trades and quotes, consideration of primary market indications, and executions inconsistent with the trading pattern in the stock. Each additional factor shall be considered with a view toward maintaining a fair and orderly market, the protection of investors and the public interest. Volatile Market Opens

During a Volatile Market Open, CODA MARKETS may expand the Numerical Guidelines applicable to transactions occurring between 9:30 a.m. and 10:00 a.m. based on the disseminated value of the S & P 500 Futures at 9:15 a.m.:

  • When the S & P 500 Futures are up or down from 3%, to up to but not including 5% at 9:15 a.m., the Numerical Guidelines are doubled for executions occurring between 9:30 a.m. and 10:00 a.m.
  • When the S & P 500 Futures are up or down 5% or greater at 9:15 a.m., the Numerical Guidelines are tripled for executions occurring between 9:30 a.m. and 10:00 am.

Unusual Circumstances

In Unusual Circumstances, CODA MARKETS may use (while attempting to maintain a fair and orderly market, protect investors and public interest) a Reference Price other than the consolidated last sale. Unusual Circumstances can include periods of extreme market volatility, sustained illiquidity, or widespread system issues. Other Reference Prices may include the consolidated inside price, the consolidated opening price, the consolidated prior close, or the consolidated last sale prior to a series of executions.

Joint Market Rulings

In circumstances that involve other markets, CODA MARKETS could potentially use a different Reference Price and/or Numerical Guideline. In these circumstances, the Reference Price would be determined based on a consensus among the exchanges where the transactions occurred.

Reviews Initiated by CODA MARKETS

In its sole discretion, CODA MARKETS reserves the right to initiate a review of a transaction if it determines that circumstances warrant such a review, regardless of whether or not a client request has been submitted. Any affected clients shall be notified accordingly.