BATS Admits Price Execution Error
A statement on the exchange operator's website said that it hopes to resolve the "system issue" by January 25. US securities law is designed to enforce execution at the best possible price, potentially landing BATS with another serious problem following embarrassment over its own failed initial public offering (IPO) last year, and continuing scrutiny from ratings agencies.
"Please be advised that BATS has determined that upon an NBBO update on BATS' BYX Exchange, BZX Exchange and BATS Options, there are certain cases where the Matching Engine will allow for a trade through or an execution of a short sale order at a price that is equal to or less than the NBB when a short sale circuit breaker is in effect under Regulation SHO," the statement reads. "These cases result from the sequencing of certain required events in the Matching Engine related to re-pricing and sliding orders in response to the NBBO update."
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