NYSE Tweaks Its Rules for Fixing Mistaken Stock Trades
Published Date: 10/23/2026
Notice
Summary
The New York Stock Exchange is updating its rule about fixing big trading mistakes to make it clearer and fairer. These changes affect traders by explaining how price limits work during different trading hours and improving how multi-stock errors are handled. The new rule also adds better coordination with other markets and removes outdated parts, aiming for smoother, quicker fixes without extra costs.
Analyzed Economic Effects
8 provisions identified: 7 benefits, 1 costs, 0 mixed.
Trades During Regulatory Halts Are Nullified
If a trade executes after a regulatory trading halt, suspension, or pause (declared by the primary listing market or imposed by the SEC) and before that halt officially ends, the Exchange will nullify that trade. An Exchange Officer can nullify such trades on their own motion or at the request of a third party, and will do so without regard to the Percentage Parameters or Numerical Guidelines and without regard to which trading session the trade occurred in.
Trades Outside Correct LULD Bands Will Be Nullified
If a transaction occurs during LULD Protected Hours outside the LULD Price Bands when those Bands were available and correct (as determined by an Exchange Officer), the Exchange will nullify the transaction. An Officer may act on their own motion or at the request of a third party, and such nullification is to be done without regard to Percentage Parameters or Numerical Guidelines.
Missing Price Bands Trigger Review Backstop
If LULD Price Bands are unavailable or missing during LULD Protected Hours—for example, before the first Price Bands are received after an opening or reopening—clearly erroneous review is available. In that case, a transaction will be found clearly erroneous if its price differs from the consolidated last sale immediately prior to the execution (or, if there were no prior trades, the previous day's official closing price) by an amount that equals or exceeds the applicable Percentage Parameter.
Erroneous Price Bands Allow Revised Reference Price
If Price Bands during LULD Protected Hours are available but erroneous (as determined by an Officer), the Officer may consider factors such as whether the LULD Reference Price equaled/exceeded Numerical Guidelines, processor calculation issues, incorrect LULD Tier classification, or corporate-action/new-issue errors. The Officer may use a Revised CEE Reference Price based on the theoretical value of the security, and a transaction will be found clearly erroneous if it differs from that Revised CEE Reference Price by an amount equal to or exceeding the applicable Percentage Parameters (e.g., the Rule notes Tier Percentage Parameters of 5% or 10% in context).
Rules for Trades Outside LULD Coverage (Numerical Test)
For NMS stocks not subject to the LULD Plan and for trades outside LULD Protected Hours, the Exchange will find a transaction clearly erroneous when, subject to additional factors, the trade price is greater than (or less than) the Reference Price by an amount that equals or exceeds the Numerical Guidelines. The Exchange may consider additional factors such as system malfunctions, volume and volatility, derivatives tracking >100%, news, recent halts/resumptions, IPO status, corporate actions, and overall market conditions.
Overnight Protections and LULD Rules Extended
The proposal specifies the interaction of missing or erroneous LULD Price Bands with the availability of clearly erroneous review during both the Core Trading Session and Overnight Protected Hours. The Exchange previously filed (September 14, 2026) to extend the restrictions that apply in the Core Trading Session to the Overnight Protected Hours when Overnight Price Bands are in place; this filing reorganizes and clarifies how those protections and reviews apply.
Multi-Stock Event Threshold Raised to 50
The proposal defines a 'Multi-Stock Event' as an event involving 50 or more securities whose executions occurred within 5 minutes—an increase from the current 20-security threshold. The Exchange would remove the current separate treatments for events involving 5–19 securities and 20 or more securities and instead analyze smaller multi-stock events on a security-by-security basis using the other Cases.
Adds Reasonable Cross‑Market Coordination
The Exchange proposes to add an explicit provision allowing reasonable cross-market coordination when addressing clearly erroneous executions. This formalizes that the Exchange may coordinate with other market centers or SROs in resolving clearly erroneous execution events.
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