Clearly Erroneous Trade Policy

Definition - the execution of an order to buy, sell, or sell short a security, entered in error (e.g. in terms of price, quantity, side or symbol) at a price substantially away from, or inconsistent with, the prevailing market price for that security at the time of execution.

Chi-X reserves the right to initiate a review of a clearly erroneous trade, regardless of whether or not a Subscriber request has been submitted, if it determines in its sole discretion that circumstances warrant such a review.

In such instances Chi-X will notify the relevant Subscriber trading contacts, as provided by the Subscriber, via electronic mail or telephone as conditions warrant, that a trade will be reviewed pursuant to this policy. Market participants that are not relevant parties will not be notified that a trade is under review.

Chi-X designated principals will exercise their sole discretion under this policy to cancel clearly erroneous trades in a timely fashion and in all cases a decision will be made no later than the close of business on the trading day of the occurrence which led to the review being initiated.

Criteria used by the designated principals in determining whether a trade is clearly erroneous include, but are not limited to: discussions with relevant parties, discussion with IIROC, analysis of market data and analysis of market events.

Chi-X will promptly notify the relevant parties and IIROC via electronic mail, and telephone as conditions warrant, of its decision to cancel a trade or trades.

In a case where a Subscriber requests a trade cancel and/or Chi-X does not determine the trade to be clearly erroneous, at the Subscriber's request Chi-X will contact the counter-party to the trade on the Subscriber's behalf to request a voluntary cancellation of the trade. If both parties to the trade mutually agree, Chi-X will cancel the trade.

Chi-X will also cancel trades when specifically instructed to do so by IIROC, regardless of whether or not a review of the trade had been initiated by Chi-X.

After Chi-X processes the cancellation of any clearly erroneous trade the trade is null and void.