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Direct Edge extends deadline for compensation claims in event of exchange malfunction

09 January 2014  |  1328 views  |  0 Source: Direct Edge

Effective Wednesday, January 8, 2014, EDGA ExchangeSM (EDGA®) and EDGX ExchangeSM (EDGX®) (together, the "Exchanges") will:

  • Extend the deadline to submit written claims for reimbursement for losses resulting directly from the malfunction of the Exchanges’ physical equipment, devices and/or programming or the negligent acts or omissions of its employees; and
  • Accept claims for losses relating to orders routed by the Exchanges through its routing broker-dealer (DE RouteSM) to other Trading Centers that experienced a systems issue.

Extension of Deadline to Submit Claims

For losses sustained due to systems issues experienced by the Exchanges, the deadline to submit claims for reimbursement under Rule 11.12(d) was extended from 12:00 p.m. Eastern Time (ET) on T+1 to 4:00 p.m. ET on T+2 (1:00 p.m. ET in the event of an early market close on T+2).

Reimbursement for Losses Sustained at Trading Centers

Under new Rule 11.12(e), the Exchanges will accept claims for losses relating to orders routed by the Exchanges through DE Route to Trading Centers that the Member claims resulted directly from a systems issue at that Trading Center.  

Members must submit claims in writing, which must contain representations as to the claim’s accuracy, and indicate that any losses were the direct result of a systems issue at the Trading Center the order was routed to.  The Exchanges would submit such claims, via DE Route, to the Trading Center in question as soon as reasonably practicable.  If and to the extent that DE Route were to receive compensation from a Trading Center, the full amount of such compensation would be passed through to the Member.  

Rule 11.12(e) does not include a specific deadline by which Members must submit claims for compensation.  Members should note that Trading Centers that are national securities exchanges impose different deadlines by which their Members must submit claims for compensation, and that maensatioensatioensation, and that many Trading Centers that are not national securities exchanges either do not impose any deadline or otherwise handle requests for compensation on a case-by-case basis.  It is, therefore, incumbent on, and the sole responsibility of, the Member to submit claims to the Exchanges in a timely manner so that the Exchanges may then forward such claim as soon as reasonably practicable, via DE Route, in advance of any deadline required by that Trading Center.  

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