2.8.3. Erroneous Reports and Error Accounts on the NYSE
The NYSE requires members effecting transactions on the exchange floor to participate in an error account. Each member firm must have one error account for the firm, or participate in an error account made up of a group of member firms. The NYSE defines “error” as an execution outside of an order’s written instructions. An error is not a failure to meet customer expectations and error accounts are not intended for use to accommodate customers. Any members that use error accounts for non-legitimate errors may be subject to disciplinary action. Some examples of errors include:
•Bought or sold the wrong security
•Traded on the wrong side of the market
•Traded at a price outside the limit price of the order
•Purchased too many or too few shares of the security
•Duplicated a trade
NYSE Rule 441 states that customers will receive the actual price that occurred during the transaction unless they are willing to accept the corrected price, described through an erroneous report. If the customer does not accept the corrected price and wants the market price, the firm will clear the difference between the two prices through its error account