A basic premise of securities trading is that once a transaction is executed, it should not be canceled and settlement should be carried out to completion. This certainty of settlement is one of the fundamental sources of reliability in a securities market.
However, an erroneous order may cause an abnormally large and unforeseen amount of transactions to be executed. This may lead to settlements not being completed for an extended period of time. When this occurs, functions of the securities market become paralyzed, causing a major disruption.
To address such a situation, the Tokyo Stock Exchange (TSE) has established a system for canceling already-executed transactions (the Rules for Canceling Executed Transactions). This will only apply to transactions involving erroneous orders with extremely high potential to impede the settlement of transactions over an extended period of time, and cause significant disruption to the market. (Implemented on September 30, 2007)