Clearly Erroneous Execution Rules

Texas Stock Exchange LLC ("TXSE" or the "Exchange") maintains a clearly erroneous execution ("CEE") rule that is harmonized with those of other U.S. equities exchanges, as outlined below. Under the CEE rule, CEE reviews are largely eliminated during Regular Trading Hours when Limit Up-Limit Down Price Bands are in effect, except in limited circumstances.

TXSE Rule 11.014(c)(1) specifies limited circumstances in which CEE reviews will be performed during Regular Trading Hours when Price Bands are in effect. Trades executed within Price Bands will stand barring one of the scenarios described below where a CEE review may still occur.

Specifically, if the execution time of the transaction(s) under review is during Regular Trading Hours, the transaction will not be reviewable as clearly erroneous unless the transaction:

• is in an NMS Stock that is not subject to the LULD Plan;
• was executed at a time when Price Bands under the LULD Plan were not available, or is the result of an Exchange technology or systems issue that results in the transaction occurring outside of the applicable LULD Price Bands pursuant to TXSE Rule 11.014(g), or is executed after the primary listing market for the security declares a regulatory trading halt, suspension, or pause pursuant to TXSE Rule 11.014(i). A transaction subject to review pursuant to this provision shall be found to be clearly erroneous if the price of the transaction to buy (sell) that is the subject of the complaint is greater than (less than) the Reference Price, described in TXSE Rule 11.014(d), by an amount that equals or exceeds the applicable Percentage Parameter defined in Appendix A to the LULD Plan (“Percentage Parameters”); or
• involved, in the case of (1) a corporate action or new issue or (2) a security that enters a Trading Pause pursuant to the LULD Plan and resumes trading without an auction, a Reference Price that is determined to be erroneous by an Officer of the Exchange because it clearly deviated from the theoretical value of the security. In such circumstances, the Exchange may use a different Reference Price pursuant to TXSE Rule 11.014(d)(2). A transaction subject to review pursuant to this provision shall be found to be clearly erroneous if the price of the transaction to buy (sell) that is the subject of the complaint is greater than (less than) the new Reference Price, described in TXSE Rule 11.014(d)(2), by an amount that equals or exceeds the Numerical Guidelines or Percentage Parameters, as applicable depending on whether the security is subject to the LULD Plan.

Additional Information:

• For questions or inquiries regarding regulatory matters, contact: regulation@txse.com