Common use of Responsibility for Trade Errors Clause in Contracts

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 so that you may assist us in determining whether compensation should be provided to Interactive Advisors Clients subscribing to your Data. Failure to cooperate with Interactive Advisors in any inquiry regarding a trade error will be deemed a Portfolio Manager Violation within the meaning of Appendix D. Pursuant to this Section and Section 8, you will indemnify Interactive Advisors for your trade errors that cause monetary harm to Interactive Advisors Clients. You agree, upon your discovery or upon notice, to promptly return to Interactive Advisors any assets or funds erroneously placed by IB or Interactive Advisors in your Account in connection with any of the trades in your Account.