Last Updated: December 2024
OpenYield Trading LLC (“OpenYield”) offers access to trading on the OpenYield ATS for the purposes of matching orders for fixed income securities between two subscribers (“Subscribers”) to the OpenYield ATS. OpenYield will use this Clearly Erroneous Trade Policy (“Policy”) to support its efforts to:
OpenYield will follow this Policy to address trade errors and disputes involving or arising from transactions on the OpenYield ATS. OpenYield provides Subscribers with access to the OpenYield ATS solely on the condition that each Subscriber has agreed to abide by OpenYield’s determinations under this Policy.
BY PARTICIPATING ON THE OPENYIELD ATS, EACH SUBSCRIBER AGREES TO BE BOUND BY, AND COMPLY WITH, THIS POLICY. IF YOU DO NOT AGREE TO BE BOUND BY, AND COMPLY WITH, THIS POLICY, DO NOT SUBMIT ORDERS TO THE OPENYIELD ATS. THIS POLICY IS SUPPLEMENTAL TO, AND DOES NOT SUPERCEDE, THE APPLICABLE SUBSCRIBER OR DEALER AGREEMENT ENTERED INTO BY EACH SUBSCRIBER WITH OPENYIELD.
Subscribers that wish to initiate the review of a transaction by OpenYield on a “clearly erroneous” basis must follow the procedures set forth in Section 4 (Request for Review) within fifteen (15) minutes of the execution of the trade.
If OpenYield determines, in its sole discretion, that a transaction is a Clearly Erroneous Trade (as defined below) or is impacted by a System Disruption or Malfunction (as defined below), OpenYield may either:
A “Clearly Erroneous Trade” is defined as a trade that OpenYield determines, in its sole discretion, was:
A “System Disruption or Malfunction” is defined as, and where determined by OpenYield in its sole discretion to be, any:
The OpenYield ATS employs order-acceptance protocols that incorporate price controls designed to reasonably prevent the entry or maintenance of orders that are outside of OpenYield’s bid-ask tolerance range. Accordingly, any trades executed on the OpenYield ATS will be presumed to be at a pricing level that is consistent with the current or expected market for that security at the time of execution. OpenYield will only find the price of an execution on the OpenYield ATS to be Clearly Erroneous under clause (a) of the definition of a “Clearly Erroneous Trade” (set forth above) where OpenYield determines, in its sole discretion, that one of the following set of events occurred and, as a result, the trade was executed at a price level that was clearly inconsistent with the current market for that security at the time of execution:
In the event of a Catastrophic Error, OpenYield shall have the right to:
A “Catastrophic Error” will be deemed to have occurred, even if such trades may not otherwise be Clearly Erroneous Trades, where:
A Subscriber may initiate the review of any trade to which it was a party pursuant to Section 5 (Review Process) below. Similarly, OpenYield may initiate a review of a transaction(s) pursuant to Section 5. For this purpose, OpenYield reserves the right to initiate a review of a trade prior to trade settlement, regardless of whether a party to the trade has requested a review, if OpenYield determines, in its sole discretion, that circumstances warrant such a review.
In all circumstances, the trade will remain the obligation of the Subscribers that are the parties to the transaction until OpenYield notifies such Subscribers in writing (by email) that the trade has been adjusted or canceled pursuant to this Policy.
To request a trade review, a Subscriber that is a party to the applicable transaction must notify OpenYield by telephone at (908) 409-3542 or via email to erroneous@openyld.com within fifteen (15) minutes of the matching of the trade. Review requests must include the following information:
In determining whether a trade is either a Clearly Erroneous Trade or impacted by a OpenYield ATS Disruption or Malfunction, OpenYield will utilize any information, and consult with any relevant parties, that in its sole discretion it deems adequate or appropriate, including, without limitation:
Each request under this Policy will be considered on a case-by-case basis by a principal of OpenYield. At the time that a review is properly initiated under this Policy, OpenYield will promptly notify the appropriate persons at the counterparty to the trade by phone or electronic communication that such review has been initiated. OpenYield will use its commercially reasonable efforts to resolve any trade review within four (4) business hours of the time that the trade review is commenced. OpenYield will notify the involved parties of any final determination by an electronic communication. All decisions by OpenYield pursuant to this Policy are final and not subject to further review or appeal. The party requesting a trade review may withdraw its request prior the time OpenYield notifies the parties to the transaction of its final determination.
Upon the communication by OpenYield of any final determination of a trade review, each Subscriber shall promptly implement the results of the determination. If the final determination by OpenYield is that a transaction shall be canceled, OpenYield and each affected Subscriber shall cancel the transaction at issue and amend any previously submitted transaction reports, as applicable, in accordance with market convention (unless both Subscribers have agreed to modify the terms of the trade in accordance with Section 1 of this Policy). If the final determination by OpenYield is that a transaction shall stand, the relevant Subscribers shall take such steps as may be necessary to settle such transactions in accordance with market convention.
In no event can resolution of trade errors or disputes occur under this Policy after the trade has settled.
In the event that a trade is not eligible for review under this Policy (e.g., due to a review request being initiated later than the applicable deadline after the trade), a Subscriber to such trade may request that OpenYield attempt to reach a mutually agreed upon trade adjustment, cancellation or reversal with the participant, although OpenYield will be under no obligation to do so. In such an instance, OpenYield solely facilitates such requests by contacting the counterparty Subscriber for assent to voluntarily adjust, cancel or reverse the subject transaction; however, OpenYield will not have any discretion over the actions of counterparties in this regard.
Subscribers are responsible for ensuring the accuracy and completeness of all information transmitted to the OpenYield ATS. Accordingly, Subscribers should:
An assertion that a Subscriber made a mistake in entering an order or that a Subscriber failed to pay attention or update a quote, may not be sufficient for OpenYield to determine that a trade is considered a Clearly Erroneous Trade.
OpenYield provides no assurances or guarantees that a price adjustment or cancellation will be provided and, as a result, a trade will stand unless and until OpenYield notifies the Subscribers in writing (by email) that the trade has been adjusted or canceled.
Use of the OpenYield ATS constitutes acceptance of OpenYield’s right to cancel or adjust any trade as described in this Policy. OpenYield shall not be liable for losses or damages arising as a result of OpenYield’s action or inaction pursuant to this Policy. Each Subscriber shall reimburse OpenYield for any losses, costs or expenses OpenYield incurs as a result of such Subscriber’s failure to abide by OpenYield’ determinations under this Policy.
OpenYield may amend, modify, supplement, or replace this Policy upon notice to Subscribers, without Subscribers’ explicit affirmative consent, upon 30 days’ advance notice of the effective date of the amendment, modification, supplement, or replacement of the Policy. Such notice may be made by letter, e-mail or notice on the OpenYield Website, or other platform established and made available for Subscriber communications describing the relevant changes.
© 2025 OpenYield Inc. OpenYield Trading LLC, a wholly-owned subsidiary of OpenYield Inc., is a broker-dealer registered with the SEC and MSRB, and is member FINRA/SIPC. OpenYield Trading LLC operates an Alternative Trading System (ATS) registered with the SEC.
The views and opinions expressed on or through this website are for informational and educational purposes only. OpenYield Inc. (and its affiliates) make no representation or warranty as to the current accuracy, reliability or completeness of, and does not accept liability for, any investment or trading decisions based on such information. Information presented does not constitute an offer or solicitation of an offer to buy/sell securities or any other products. Information presented is for institutional investor use only and is not intended for use by retail investors. Information or services offered may not be available or appropriate for use by all potential subscribers. There is no intention to offer products and services in countries or jurisdictions where such an offer would be unlawful under the relevant domestic law.
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