Clearly Erroneous Filing

 

Submission Form

*Indicates Required Field

*Issue Symbol:
*Your Firm's MPID:
*Contact Name:
*Contact Phone/Extension:
Contact Email:
*Total Number of Shares Executed:
*Execution Time From:::*To:::
*Transaction Price Range From:*To:
*Side:
*System used to Execute Transactions:
*Error Details:
Document:
(.txt, .doc, .docx, .pdf, .jpg, .gif, .xls, .xlsx, .csv, .htm, .html files only. ) The file size must be < 3 MB.
 
Question:What is 81 + 44 ? (Example: 11 + 22 = 33)
*Answer: Please enter only the answer for the question shown above
 


Clearly Erroneous Transactions Policy





Documentation

  • Market participant must file a request electronically. If there are problems with an electronic submittal, please print this form and email to dl-nasdaqmarketwatch@nasdaq.com. A phone call is not necessary prior to filing.
  • Nasdaq requires the following information to be included with the filing to be considered for review:
    • Time of the transaction(s)
    • Security Symbol(s)
    • Number of Shares
    • Price(s)
    • Side (Bought, Sold or Both)
    • Factual basis for believing that the trade is clearly erroneous

Filing Deadline

An erroneous complaint must be transmitted online or via facsimile to Nasdaq MarketWatch within a certain time period, depending on when the alleged erroneous trade was executed.

Specifically:
Except as provided below, any member or person associated with a member that seeks to have a transaction reviewed shall submit a written complaint to Nasdaq MarketWatch within 30 minutes of the execution time.

Routed executions to other market centers will generally have an additional 30 minutes from receipt of their participant's timely filing, but no longer than 60 minutes from the time of the execution at issue, to file with Nasdaq for review of transactions routed to Nasdaq from that market center and executed on Nasdaq.

In the case of an Outlier Transaction during Pre-Market or Post-Market Hours, or in an NMS Stock that is not subject to the Limit Up-Limit Down (“LULD”) Plan, a Nasdaq official may at its sole discretion, and on a case-by-case basis, consider requests received pursuant to this rule after 30 minutes, but not longer than 60 minutes after the transaction in question, depending on the facts and circumstances surrounding such request. "Outlier Transaction" means a transaction where:

(A) the execution price of the security is greater than three times the current Numerical Guidelines (as described below), or

(B) the execution price of the security in question is not within the Outlier Transaction parameters set forth in (A) above, but the execution price breaches the 52-week high or 52-week low. In such cases, Nasdaq may consider Additional Factors as outlined below, in determining if the transaction qualifies for further review or if Nasdaq shall decline to act.

Once a party has applied to Nasdaq for review and the transaction has been determined to be eligible for review, the transaction shall be reviewed and a determination rendered, unless (i) both parties (or the party in the case of a cross order entered into one of Nasdaq's crossing networks) to the transaction agree to withdraw the application for review prior to the time a decision is rendered by the Nasdaq official, or (ii) the complainant withdraws its application for review prior to the notification of counterparties. In the event that the Nasdaq official determines that the transaction in dispute is clearly erroneous, the official shall declare the transaction null and void. A determination shall be made generally within 30 minutes of receipt of the complaint, but in no case later than the start of Market Hours (9:30:00 to 4:00:00) on the following trading day. The parties shall be promptly notified of the determination.

Reference Price Determination

Market Hours

If the execution time of the transaction(s) under review is during Market Hours, the transaction will generally not be reviewable as clearly erroneous unless the transaction:

  • is in an NMS Stock not subject to the LULD Plan. In such circumstances, the Numerical Guidelines (as described below) will apply to the NMS Stock.

  • was executed at a time when Price Bands under the LULD Plan were not available, or is the result of an Exchange technology or systems issue that results in the transaction occurring outside of the applicable LULD Price Bands, or is executed after the primary listing market for the security declares a regulatory trading halt, suspension, or pause. In such circumstances, the transaction will be found to be 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 (as described below), by an amount that equals or exceeds the applicable Percentage Parameter defined in Appendix A to the LULD Plan (“Percentage Parameters”)

  • involved, in the case of (1) a corporate action or new issue or (2) a security that enters an LULD Trading Pause and resumes trading without an auction, a Reference Price that is determined to be erroneous by an Officer of the Exchange or senior level employee designee because it clearly deviated from the theoretical value of the security. In such circumstances, the Exchange may use a different Reference Price, as described below. A transaction subject to review under this paragraph will be found as clearly erroneous if the price of the transaction to buy (sell) that is the subject of the complaint is greater than (less than) the new Reference Price by an amount that equals or exceeds the Numerical Guidelines or Percentage Parameters, as applicable depending on whether the security is subject to the LULD Plan.


Pre-Market and Post-Market Hours

Nasdaq generally uses the Numerical Threshold of a trade when determining whether a transaction is clearly erroneous. Subject to the additional factors described below, a transaction executed during Pre-Market or Post-Market Hours, or in an NMS Stock that is not subject to the LULD Plan, shall be found to be clearly erroneous only 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 will be equal to the consolidated last sale immediately prior to the execution(s) under review except for:

  • (A) Multi-Stock Events involving twenty or more securities,

  • (B) in the case of an erroneous Reference Price, as described above. In the case of a corporate action or new issue, the Exchange would consider a number of factors to determine a new Reference Price that is based on the theoretical value of the security, including but not limited to, the offering price of the new issue, the ratio of the stock split applied to the prior day’s closing price, the theoretical price derived from the numerical terms of the corporate action transaction such as the exchange ratio and spin-off terms, and for an OTC up-listing, the price of the security as provided in the prior day’s FINRA Trade Dissemination Service final closing report. In the case of a security that enters an LULD Trading Pause and resumes without an auction, the Reference Price will be the last effective Price Band that was in a limit state before the Trading Pause, and

  • (C) in other circumstances, such as, for example, relevant news impacting a security or securities, periods of extreme market volatility, sustained illiquidity, or widespread system issues, where use of a different Reference Price is necessary for the maintenance of a fair and orderly market and the protection of investors and the public interest, provided that such circumstances occurred during Pre-Market or Post-Market Hours, or are in transactions that are not subject to the LULD Plan.

Nasdaq does not normally break trades that are between the Reference Price and up to but not including the Numerical Threshold. Refer to the chart below for more details:

Reference Price,
Circumstance or Product
Market Hours Numerical Guidelines for transactions in NMS Stocks that are not subject to the LULD Plan (Subject transaction's % difference from the Reference Price): Pre-Market and Post-Market Hours Trading Session Numerical Guidelines (Subject transaction's % difference from the Reference Price):
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, but less than twenty, securities whose executions occurred within a period of five minutes or less 10% 10%
Multi-Stock Event - Filings involving twenty or more securities whose executions occurred within a period of five minutes or less 30%, subject to the terms of below 30%, subject to the terms of below
Leveraged ETF/ETN securities N/A Market Hours Numerical Guidelines multiplied by the leverage multiplier (ie. 2x)


Multi-Stock Events Involving Twenty or More Securities: Multi-Stock Events involving twenty or more securities may be reviewable as clearly erroneous if they occur during Pre-Market or Post-Market Hours or are in NMS Stocks that are not subject to the LULD Plan. During Multi-Stock Events, the number of affected transactions is such that immediate finality may be necessary to maintain a fair and orderly market and to protect investors and the public interest. In such circumstances, Nasdaq may use a Reference Price other than the consolidated last sale. With the exception of those securities under review that are subject to an individual stock trading pause as described below, and to ensure consistent application across market centers when this paragraph is invoked, Nasdaq will promptly coordinate with the other market centers to determine the appropriate review period, which may be greater than the period of five minutes or less that triggered application of this paragraph, as well as select one or more specific points in time prior to the transactions in question and use transaction prices at or immediately prior to the one or more specific points in time selected as the Reference Price. Nasdaq will nullify as clearly erroneous all transactions that are at prices equal to or greater than 30% away from the Reference Price in each affected security during the review period selected by Nasdaq and other markets consistent with this paragraph.

Additional Factors: Except in the context of a Multi-Stock Event involving five or more securities, and individual stock trading pauses as described in below a Nasdaq official may also consider additional factors to determine whether an execution is clearly erroneous, provided the execution occurred during Pre-Market or Post-Market Hours or is in an NMS Stock that is not subject to the LULD Plan. Such additional 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 Hours 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 and the protection of investors and the public interest.

Reviewing Transactions on Nasdaq's Own Motion

Senior Official Acting on Own Motion: A Senior Official, acting on his or her own motion, may review potentially erroneous executions occurring during Pre-Market or Post-Market Hours, or that are eligible for review during Market Hours (as outlined above), and declare trades null and void or shall decline to take any action in connection with the completed trade(s). In such events, the Senior Official will rely on the provisions of above. Absent extraordinary circumstances, any such action of the Senior Official shall be taken in a timely fashion, generally within thirty (30) minutes of the detection of the erroneous transaction. When extraordinary circumstances exist, any such action of the Senior Official must be taken by no later than the start of Market Hours on the trading day following the date of execution(s) under review. When such action is taken independently, each party involved in the transaction shall be notified as soon as practicable by Nasdaq, and the party aggrieved by the action may appeal such action in accordance with the provisions of Equity 11, Rule 11890(c)(1).

Additional Information

 

Additional Information