APPENDIX “D”
BLOCKBOOK-SPECIFIC RULES, POLICIES AND PROCEDURES
All orders input into BlockBook are subject to the following:
(a) Any “corporate action” by or in respect of any issuer of any securities, including, but not limited to, any sub-division, consolidation, mandatory conversion or exchange for other securities or cash, merger, formal tender offer, bankruptcy event or rights offering, will be treated by BlockBook for trading purposes as per the treatment by the principal Canadian stock exchange (if any).
(b) All advantages and entitlements to receive dividends or any other distributions made or right given to holders of an equity security shall be treated in the same way as if the trade had occurred on the principal Canadian stock exchange (if any).
(c) If the principal Canadian stock exchange or the applicable regulatory or self-regulatory authority has determined that there is not a fair market price for the security, or has otherwise “unwound” certain transactions on the principal Canadian stock exchange, then at our discretion: (a) any or all transactions in such securities on BlockBook during the applicable period may be set aside, or (b) any or all transactions in such securities on BlockBook during the applicable period may remain valid, or (c) any or all transactions in such securities on BlockBook during the applicable period may be deemed to have occurred at the price, if any, determined to be a fair settlement price by the principal Canadian stock exchange or the regulatory or self-regulatory authority.
(d) Cease trade orders, exchange de-listings, trading suspensions and halts will have the same effect as per the treatment by the principal Canadian stock exchange.
(e) In our capacity as a regulated entity, we retain discretion, acting reasonably, to decline to act on any orders submitted on BlockBook.
(f) All transactions are subject to BlockBook’s Clearly Erroneous Policy, which appears on the following pages of this Appendix “D” (and which may be amended from time to time upon 30 days’ prior written notice to subscribers). We shall be entitled to apply and enforce the Clearly Erroneous Policy in our sole discretion, and shall have no liability whatsoever, to any person, for any action or for any omission related thereto directly or indirectly. For greater certainty, none of us, our affiliates or any of their respective directors, officers, employees, agents, representatives and independent contractors will in any event be liable for any Damages (as defined in Section 12 of the Agreement) whatsoever arising out of our action or failure to act pursuant to the Clearly Erroneous Policy. This provision shall survive any termination of the Agreement.
(g) All BlockBook orders interact according to our matching methods described in our BlockBook Specifications manual, a copy of which is provided to each subscriber prior to joining BlockBook and is available at any time upon request.
APPENDIX “D” (continued)
BLOCKBOOK’S CLEARLY ERRONEOUS POLICY
Trades Executed Through BlockBook
Perimeter Markets reserves the right, to be exercised in our sole discretion (if applicable in consultation with the applicable regulator or self-regulator), to cancel transactions executed through BlockBook that we determine to be the result of clearly erroneous orders placed by a subscriber into BlockBook. Each subscriber’s use of BlockBook constitutes acceptance of our right to cancel such transaction in accordance with this Clearly Erroneous Policy. It is the duty of each subscriber to fully understand the terms of this policy.
Clearly Erroneous Trades
If a subscriber clearly erred in its entry of an order into BlockBook and such order is executed in whole or in part, then such subscriber may request that we exercise our right to cancel such transaction or we may do so on our own initiative. The subscriber making this request must demonstrate to our satisfaction (or we must be satisfied) that its entry of the order or any term thereof, such as price, quantity or identity of the security, involved an unintentional and clear error. An example of an unintentional and clear error in order entry could include, among other things, entering an order to buy or sell at a price substantially away from the current market price. In the event that we determine in our sole discretion (if applicable in consultation with the applicable regulator or self-regulator) and upon such information that we deem adequate, that a material term of such order was clearly erroneous as entered, we may cancel any resultant transaction. If we do not cancel the transaction as requested by the subscriber, the subscriber may commence arbitration proceedings specified under the Agreement within five Business Days of notice to it of our decision, failing which the subscriber will be deemed to have irrevocably accepted our decision.
Defined No Bust Range
We maintain a “No Bust Range” equal to our “Reasonable Range” (as determined in accordance with our BlockBook Specifications manual). When a potential error trade is brought to or comes to our attention, we will determine whether the trade price is at or within our No Bust Range for the particular security.
If we determine that the price of the potential error trade was at or within the No Bust Range, then the trade will stand and no further action will be taken.
Liability of Perimeter Markets
Whether or not we cancel a transaction pursuant to this policy, we shall have no liability whatsoever to any subscriber.
Notification of Error
Any subscriber must notify us of any executed tradewhich the subscriber believes was the result of a clearly erroneous order entered by the subscriber as soon as possible, but in no event more than 30 minutes after the execution of the transaction at issue. The subscriber must provide us with a description of the relevant details and other information substantiating the subscriber’s claim that it entered the order unintentionally and in clear error. The subscriber should also reference this policy and specify what action it is requesting us to take. Written notification of the details of the claim is required by fax or e-mail. Notification may be initiated orally. We may consider, in our sole discretion (if applicable in consultation with the applicable regulator or self-regulator) and on a case-by-case basis, requests received after such time period, depending on the facts and circumstances surrounding such request. Once made, the subscriber cannot withdraw a request to us made under this policy without our consent. We will attempt to render a final decision in the transaction at issue within one hour of receiving such description. If we decide to cancel an order upon our own initiative (if applicable in consultation with the applicable regulator or self-regulator) as outlined above, we will promptly provide oral notification of such decision to the parties involved in the transaction at issue, and thereafter, will provide written notification to any of such parties upon request. An affected subscriber may commence arbitration proceedings under Section 9 of the Agreement within five Business Days of notice to it of our cancellation decision, failing which the subscriber will be deemed to have irrevocably accepted our decision.
Transaction Reviews Initiated by Perimeter Markets
In the event of a BlockBook malfunction that affects and alters the terms of any subscriber’s orders, we shall (if applicable in consultation with the applicable regulator or self-regulator), if we become aware of such malfunction, cancel all affected altered orders and shall declare transactions resulting from such affected altered orders to be clearly erroneous hereunder, and cancel such transactions. Except in extraordinary circumstances, we will exercise our discretion to cancel any transaction rendered clearly erroneous due to any such BlockBook malfunction by 6:00 p.m. (Toronto time) of the Business Day following such malfunction.
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CONFIDENTIAL
v.2007/2