Resolution of NYSE Opening Auctions Technical Issue

On January 24, 2023, at approximately 9:30 AM, the NYSE commenced continuous trading in 2,824 of 3,421 NYSE-listed securities without attempting to conduct an opening auction due to a technical issue, following which approximately 84 of these impacted symbols entered Limit Up-Limit Down (“LULD”) pauses.  Continuous trading then resumed after satisfaction of LULD plan re-opening requirements for the impacted symbols.

Because the Exchange, for impacted symbols, entered into continuous trading in the absence of opening auctions, the LULD bands for such symbols were set based on their first eligible trade of the day, not an auction price.  Per design, these first trades were not yet themselves bounded by LULD bands.

Further, because information for LULD bands needs to be sent to the Securities Information Processor (“SIP”), which then publishes back to participant exchanges, a number of trades after 9:30 on the Exchange occurred prior to the receipt of the LULD bands from the SIP resulting from the first trades in the impacted symbols (and, by extension, prior to any bounding of the trades by the LULD parameters being set).

Thereafter, on its own motion pursuant to NYSE Rule 7.10 (Clearly Erroneous Executions), the Exchange determined to declare as null and void any trades in NYSE-listed symbols that did not conduct an opening auction and that both (1) occurred after 9:30:00 but before the receipt of LULD bands and (2) executed at a price further from the Reference Price, defined in NYSE Rule 7.10(d), than the Percentage Parameters, which are defined in Appendix A to the LULD Plan. Accordingly, the Exchange subsequently determined that approximately 4,341 trades in 251 symbols should be busted. Most of the trade breaks were processed on Tuesday, January 24. The Exchange plans to process the remaining trade breaks today, Wednesday, January 25.

For those securities that did not conduct an opening auction and entered an LULD pause before 9:30:45 AM, the Exchange determined to re-mark trades preceding the LULD pause as aberrant (i.e., Price Variation Trade (Sale Condition H)) on the consolidated tape to eliminate those executions from the calculation of the day’s High or Low price. The consolidated tape adjustments were processed after the close, resulting in approximately 1,369 trades in 84 symbols being so marked.

The root cause was determined to be a manual error involving the Exchange’s Disaster Recovery configuration at system start of day.  All exchange systems are operational, and a normal opening for January 25, 2023 is expected.

Source: NYSE