Responsibility for Trade Errors Clause Samples
The Responsibility for Trade Errors clause defines which party is liable for mistakes made during the execution of trades, such as incorrect orders or miscommunications. Typically, this clause outlines the procedures for identifying, reporting, and rectifying errors, and may specify whether the broker, client, or another party bears the financial consequences. Its core function is to allocate risk and clarify accountability, thereby minimizing disputes and ensuring that errors are addressed promptly and fairly.
Responsibility for Trade Errors. (a) You acknowledge that any Order submitted to the System is at your sole risk and will be irrevocable unless we otherwise consent.
(b) You accept continuing responsibility for Order(s) submitted, notwithstanding that such Order(s) may have been submitted erroneously or by an unauthorised user, or that its data is inaccurate or incomplete when submitted to the System, or you subsequently determine for whatever reason that the Order should not have been submitted. You will reimburse us for any Loss caused to us or any of our Affiliates due to such trade error.
(c) If you are aware that an incorrect Order has been sent via the System or if you become aware of any other unauthorised use of the System, you should immediately notify us. A request to cancel an Order will not be effective until you receive an acknowledgement from us that the Order has been cancelled, and you will be responsible for any Orders executed prior to your receipt of such acknowledgement.
Responsibility for Trade Errors. Trade errors may occur either when you trade your Account for which you provide Data to Interactive Advisors for purposes of managing a portfolio on the platform or when Interactive Advisors executes trades for Interactive Advisors Clients subscribing to your Data. To ensure pricing and execution fairness and prevent potential front-running by Portfolio Managers, Interactive Advisors places your trade order and the corresponding amounts to be routed for Clients following you (i.e., investing in a portfolio based on your Data) in a single order. Interactive Advisors then allocates the executed shares to your Account and subscribing Clients’ accounts on a pro rata basis, i.e., at the same average price per share with transaction costs shared equally. Generally, you will be responsible for trade errors in the following circumstances: ● You purchased or sold the wrong security or the wrong amount of securities in your account managing the Portfolio; ● You purchased or sold securities in the wrong account; ● You traded in your account managing the Portfolio outside IB’s online trading platform preventing Interactive Advisors from seeing the trades it needed to replicate into Client Accounts using its co-trading technology; or ● You withdrew or deposited cash into your account without providing Interactive Advisors with the 7-day advance notice required by the Trading Rules set forth in Appendix A, which prevented Interactive Advisors from properly mirroring your trade into Client accounts. Generally, you will not be responsible for trade errors in the following circumstances: ● Execution errors made by any broker-dealers, clearing firms, or custodians when an order was properly submitted for execution; and ● Unwarranted delays in trade replication for clients due to a failure in Interactive Advisors co-trading technology. You agree to reimburse Interactive Advisors for all Client losses caused by your errors in trading, including commissions or fees associated with reversal of erroneous trades in Client accounts subscribing to your Data. You agree to notify Interactive Advisors immediately in writing if you think that a trade error occurred in your Account. Interactive Advisors will in good faith determine whether a trade error for which Interactive Advisors Clients should receive compensation was caused by you or Interactive Advisors. When a trade error for which you are responsible occurs, Interactive Advisors will provide you with details regarding the error...