An NVDR trading order has to be designated as such, because otherwise it may be mistaken as an order for the underlying security. However, occasionally an NVDR order may be mistakenly labeled. Fortunately, in these circumstances a broker is allowed to correct mistakes in an order, as described below:
Brokers can correct an error within the same trading day (before the market closes) by designating an order as an NVDR trade, even though it may have been matched. Please note that this correction must be completed before 5:00 p.m. hours on the same trading day.
To correct an error after the trading day:
- If clearing and settlement has not been completed, a broker must adjust the transaction covering the NVDR’s purchase or sale, by using the NVDR adjustment function in the clearing house system and including the transaction’s deal number. Please note that this reverse transaction must be recorded in the system no later than 10:30 a.m. on the third business day (T+3) after the trading error occurred.
- If clearing and settlement has been completed, a broker must adjust the transaction by using the NVDR adjustment (extension) function in the clearing house system and include the transaction’s deal number. Deals that may be adjusted must have taken place over the last three months from the date of seeking correction, provided that the books have not been closed since the deal in question took place. If there has been a book closing in the last three months, only deals since the closing may be adjusted.
Fees for adjusting NVDR trades will be waived effective August 1, 2011.
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