Bruce Markets LLC Clearly Erroneous Trade Policy

Overview

To file a Clearly Erroneous Transaction Request, please submit an email to support@brucemarkets.com. Bruce strongly encourages you to read this entire disclosure to help you file your appeal; there are essential timing and documentation requirements that are detailed below. 
 
When filing your request, please note the filing deadline. A phone call is not necessary prior to filing and may cause delay in the filing process. 
 
Erroneous Review Guidance 
 
Bruce Markets LLC (“Bruce”) is providing general guidance on when transactions may be deemed erroneous under Rule 11890. This guidance is not a mandate of the rule but is information on how Bruce generally applies the terms of the rule (at Nasdaq’s discretion) to determine whether an execution is clearly erroneous. 
 
The terms of a transaction executed on Nasdaq are “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 made in clearly erroneous error and cancelled by both parties or determined by Nasdaq to be clearly erroneous will be removed from the consolidated tape. 
 
Filing Deadline 
 
An erroneous complaint must be transmitted online or via email or facsimile to Bruce 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 Bruce 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 Bruce 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 Bruce 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 sixty minutes after the transaction in question. 
 
Outlier Transactions 
 
“Outlier Transaction” means a transaction where: 
 
(A) the execution price of the security is greater than three times the current Numerical Guidelines, or 
 
(B) the execution price of the security in question is not within the Outlier Transaction parameters, but the execution price breaches the 52-week high or 52-week low. In such cases, Bruce may consider Additional Factors in determining if the transaction qualifies for further review or if Bruce shall decline to act. 
 
Transactions after 8:00 p.m. ET 
 
If you are filing for Erroneous Trade adjudication after 8:00 p.m. ET: 
 
Please submit your request in writing to Bruce Markets LLC via online submission. (A phone call is not necessary prior to filing.) 
Clearly Erroneous filings received by Bruce after 8:00 p.m. ET will be processed on the next business day. 
 
Documentation Required for Filing a Complaint 
 
A complaint must include the following information: 
 
Time of the transaction(s) 
Security symbol(s) 
Number of shares executed 
Price(s) or range of filing 
Side (Buy, Sell, or Both) 
The factual basis for believing that the trade is clearly erroneous 
 
If Bruce receives a complaint that does not contain all the required supporting information, Bruce will immediately notify the filer that the complaint is deficient. Please submit the required information to support@brucemarkets.com. 
 
Reference Price Determination 
 
During 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 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 
Bruce 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. 
 
Bruce 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% 
 
10% 
20% 
Greater than $25.00 up to and including $50.00, 5%, 10% 
 
5% 
10% 
Greater than $50.00, 3%, 6% 
 
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% 
 
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 below, 30%, subject to the terms below 
 
30%, subject to the terms below 
30%, subject to the terms below 
 
Leveraged ETF/ETN securities 
 
N/A 
Market Hours Numerical Guidelines multiplied by the leverage multiplier (e.g., 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, Bruce may use a Reference Price other than 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, Bruce 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. Bruce 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 Bruce 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 Bruce 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. 
 
Complaints Failing to Meet Documentation Requirements 
 
Bruce staff will notify the complainant immediately of any deficiencies in the filing so the complainant can revise and resubmit documentation, if possible, within the 30-minute time frame established by the rule. 
 
In cases where a market participant’s claim is not eligible for review because the complaint does not include the required documentation, the market participant may appeal to the Bruce Review Council by alleging a mistake of material fact upon which it believes the Bruce Official’s determination was based. The Bruce Review Council will not substantively review an appeal of a determination that does not allege a mistake of material fact. If the Bruce Review Council finds the determination was based on a mistake of material fact, the Bruce Review Council remands the matter to the Bruce Official for adjudication. If the Bruce Review Council finds the determination was not based on a mistake of material fact, the determination is final and binding. 
 
Reviewing Transactions on Bruce’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 Bruce, and the party aggrieved by the action may appeal such action in accordance with the provisions of Equity 11, Rule 11890(c)(1). 
 
Appeal of Clearly Erroneous Rulings 
 
• An appeal must be received in writing within 30 minutes after the person making the appeal is given notification of the determination being appealed. Appeals may be emailed to support@brucemarkets.com. 
 
• Once a written appeal has been received, the counterparty to the trade will be notified of the appeal, and both parties can submit any additional supporting written information until the time the appeal is considered by the appropriate committee. 
 
• Either party to a disputed trade may request the written information provided by the other party during the appeal process. 
 
• An appeal shall not operate as a stay of the determination being appealed, and the scope of the appeal shall be limited to trades to the person making the appeal. 
 
• Once a party has appealed a determination to the appropriate committee, the determination shall be reviewed and a decision rendered, unless both parties to the transaction agree to withdraw the appeal prior to the time a decision is rendered, or the party filing the appeal withdraws its appeal prior to the notification of counterparties. 
Upon consideration of the record, the MORC shall affirm, modify, reverse or remand the determination. 
 
• The decision of a committee pursuant to an appeal, or a determination by a Nasdaq officer that is not appealed, shall be final and binding upon all parties and shall constitute final action on the matter. Any determination by a Nasdaq officer or any decision by a committee shall be rendered without prejudice as to the rights of the parties to the transaction to submit their dispute to arbitration. 
 
To File an Appeal 
 
Please use this email address: support@brucemarkets.com. Remember to include all the required information: 
Time of the transaction(s) 
Security symbol(s) 
Number of shares executed 
Price(s) or range of filing 
Side (Buy, Sell, or Both) 
The factual basis for believing that the trade is clearly erroneous