Cancellation of Matched Orders

January 15, 1998 PSE MEMO FOR BROKERS NO. 023-98 SUBJECT : Cancellation of Matched Orders The Floor Trading and Arbitration Committee noted the number of cases where brokers request for the cancellation of matched transactions due to trader's mistakes. To discourage the practice, the Board of Governors has approved the Committee's recommendation to charge a processing fee of P1,000 per such request. Article 15, Chapter I of the Trading Rules (Circular No. 248 dated 23 December 1997) is hereby amended as follows: "ARTICLE 15. Cancellation of Matched Orders There shall be no cancellation of done or matched trades except in computer errors or evident mistakes. In case of a trader's evident mistake, there shall be a processing fee of P1,000 per matched trade requested for cancellation . PROVIDED THAT, in the case of a cross transaction, a formal letter-request, as set out in the request form (Annex "3"), shall be signed by the firm's authorized signatories addressed to the Floor Trading Arbitration Committee, indicating the reason(s) for the request for cancellation and a confirmation that the two (2) parties involved in the transactions have agreed to the cancellation. PROVIDED FURTHER THAT, in the case of a transaction involving two (2) brokers, the letter request shall be co-signed by the two (2) brokerages authorized signatories indicating that their respective clients and/or themselves have both agreed to the cancellation and as to which of them will shoulder the cost of the processing fee . PROVIDED FINALLY, that the intended cancellation in both cases shall not violate any PSE or SEC rules and regulations. The following is the procedure in requesting for cancellation: 1. A request for cancellation shall be submitted for the approval of the Floor Trading Arbitration Committee which shall determine if the cause for the request exists. Approval of the requests for cancelations require signatures of three (3) Committee members. 2. After securing the needed signatures, the letter-request should then be sent to the Exchange Management through the Market Regulator Terminal (MRTerm) staff on each of the Trading Floors for verification of the signature of the Floor Trading Arbitration Committee members and the authorized signatories of the requesting brokers. For this purpose, specimen signatures must be submitted. Cancellation requests with defects in the signatures submitted shall not be acted upon. LexLib 3. To ensure that the Daily Quotation shall no longer include the trades to be canceled which otherwise would have distorted it, requests for cancellation shall reach the Exchange Management (the Chief Operating Officer [COO] or in his absence, the Department Head of the Information Technology [IT] Department) not later than 2:00 p.m. of the same day. 4. In cases of emergency where the letter-requests with the necessary signatures cannot be presented but trades need immediate cancellation, the concerned brokers may call the COO or the Head of the IT Dept. to have the trade canceled. The brokers shall however make representation that they have already gotten the verbal conformity of at least three (3) members of the Floor Trading Arbitration Committee Committee. The appropriate letter request should be submitted to the Management within twenty-four (24) hours from the time Management acted upon the request. 5. Requests for cancellation after 2:00 p.m. of the same day shall be incorporated the following day. This amended rule takes effect immediately. For your information and guidance. (SGD.) RAFAEL L. LLAVE Chief Operating Officer