Rule 411. Erroneous Reports
This rule is no longer applicable.
(a)
(i) Erroneous Reports
Except as provided in Rule 123B(b) and in paragraph (ii) below, the price at which an order is executed shall be binding notwithstanding the fact that an erroneous report in respect thereto may have been rendered. A member must offer a corrected report to the non-member, which is rejected by an individual authorized to act for the non-member, before relying on paragraph (ii) below.
Except as provided in Rule 123B(b) and in paragraph (ii) below, the price at which an order is executed shall be binding notwithstanding the fact that an erroneous report in respect thereto may have been rendered. A member must offer a corrected report to the non-member, which is rejected by an individual authorized to act for the non-member, before relying on paragraph (ii) below.
(ii) A non-member for whom a member executed an order but rendered an erroneous report thereto may treat the terms of the execution report as though they were the terms of the actual auction market trade, provided:
(1) the price and size of the erroneous report are within the range of prices and sizes in the subject security reported on the Consolidated Tape on the day in which the order was executed;
(2) the member reports the nature of the error to the customer, and whether the error was favorable or unfavorable to the non-member;
(3) the member documents, on trade-by-trade basis, the name of individual authorized to accept the erroneous report for the non-member, the amount of the error, and whether the error was in the nonmember's or member's favor;
(4) except as provided in (6) below, the member treats the erroneous report as though it were an erroneous trade, and takes the opposite side of the report, and the opposite side of the actual auction market trade, into his or her error account or the error account of the member organization;
(5) the member assumes any loss occasioned by the erroneous report, with any profit paid to the New York Stock Exchange Foundation;
(6) a specialist may accommodate the member and take the error into the specialist's error account, so long as the member documents the specialist's taking in the error, and documents the non-member understandings indicated in paragraph (2) above, the specialist documents taking in the error to accommodate the member, and the member assumes any loss, with any profit going to the New York Stock Exchange Foundation.
(iii) Except as provided in (iv) below, a report shall not be binding and must be rescinded if an order was not actually executed but was in error reported to have been executed; an order which was executed, but in error reported as not executed, shall be binding; provided, however, when a member who is on the Floor reports in good faith the execution of an order entrusted to him by another member or member organization and the other party to that transaction does not know it, the member or member organization to whom such report was rendered and the member broker who made the report shall treat the transaction as made for the account of the member who made the report, or the account of his member organization, if the price and size of the transaction were within the price and volume of transactions in the security at the time that the member who made the report believed he had executed the order. A detailed memorandum of each such transaction shall be prepared and filed with the Exchange by the member assuming the transaction.
(iv) A Floor broker who fails to execute a not held order because of the Floor broker's error as to symbol, side or price, but reports to the customer the order had been executed in accordance with the customer's instructions, may treat the terms of the execution report as though they were the terms of a trade, provided:
(1) the price and size of the erroneous report are within the range of prices and sizes in the subject security reported on the Exchange portion of the Consolidated Tape on the day in which the order was erroneously reported;
(2) the Floor broker reports the error to the customer, and whether the error was favorable or unfavorable to the customer;
(3) the Floor broker documents, on a trade-by-trade basis, the name of individual authorized to accept the erroneous report for the customer, the amount of the error, and whether the error was in the customer's favor;
(4) the Floor broker treats the erroneous report as though it were an erroneous trade and his or her error account or the error account of the member organization becomes the opposite side to the report; and
(5) the Floor broker assumes any loss occasioned by the erroneous report, and pays any profit to the New York Stock Exchange Foundation.
| Amendment. January 19, 1956, effective February 13, 1956; June 28, 1957, effective July 1, 1957; May 28, 1982; December 22, 1982; September 13, 2001, effective February 4, 2002 (99-25); June 5, 2007 (NYSE-2006-28). |
(b)
(1) Conduct of Accounts
"Bunching" odd/lot orders
A member or member organization shall not combine the orders given by several different customers to buy or sell odd-lots of the same stock, into a round-lot order without the prior approval of the customers interested.
When a person gives, either for his own account, for various accounts in which he has an actual monetary interest, or for accounts over which such person is exercising investment discretion, buy or sell odd-lot orders which aggregate 100 shares or more, a member or member organization shall not accept such orders for execution unless they are, as far as possible, consolidated into full lots, except that selling orders marked "long" need not be so consolidated with selling orders marked "short." An exception from this consolidation requirement may be relied upon once per trading day by the person exercising investment discretion for the odd-lot orders in a particular stock that would aggregate to less than 300 shares.
"Bunching" odd/lot orders
A member or member organization shall not combine the orders given by several different customers to buy or sell odd-lots of the same stock, into a round-lot order without the prior approval of the customers interested.
When a person gives, either for his own account, for various accounts in which he has an actual monetary interest, or for accounts over which such person is exercising investment discretion, buy or sell odd-lot orders which aggregate 100 shares or more, a member or member organization shall not accept such orders for execution unless they are, as far as possible, consolidated into full lots, except that selling orders marked "long" need not be so consolidated with selling orders marked "short." An exception from this consolidation requirement may be relied upon once per trading day by the person exercising investment discretion for the odd-lot orders in a particular stock that would aggregate to less than 300 shares.
(2) Recording of transactions in accounts
Transactions in securities shall be recorded in accounts no later than settlement date.
Transactions in securities shall be recorded in accounts no later than settlement date.
| Amendment. June 28, 1978; August 18, 1992. |
• • • Supplementary Material: --------------
.10 Transposed to Rule 411(b-1) without change effective May 28, 1982.
.20 Transposed to Rule 409(f) with change effective May 28, 1982.
.30 Rescinded effective May 28, 1982.
.40 Transposed to Rule 411(b)(2) with change effective May 28, 1982.
.50 Transposed to Rule 409(g) without change effective May 28, 1982.
.60 Transposed to Rule 36.30 without change effective May 28, 1982.
.70 Transposed to Rule 36.20 without change effective May 28, 1982.