NYSE Proposes Rule Change To Limit Vendor Liability

Law360, New York (March 10, 2009, 12:00 AM EDT) -- The New York Stock Exchange is seeking comments on a proposed rule change aimed at limiting litigation against third-party vendors whose electronic systems malfunction during trading.

The proposed change to Rule 17 would require broker-dealers who lose money because of a system malfunction to submit a claim for reimbursement to the exchange before filing suit against the vendors, according to a Federal Register notice published Monday.

The proposal has been relaxed to provide broker-dealers with avenues for recovering their losses since NYSE first suggested changes to...
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