Nasdaq OMX Group Inc. (NDAQ: Quote) announced that it plans to offer $62 million fund to compensate traders for the technical glitches that marred the blockbuster initial public offering of Facebook (FB: Quote) shares on May 18. The plan is $22 million larger than the June proposal.
Nasdaq Omx said it has decided to modify the preliminary accommodation program announced on June 6 in several significant ways. The program provides for a priority of accommodation to customers of members. All accommodations will be paid in cash, simplifying the process and eliminating trading credits from the earlier proposal. The program has broadened the eligibility by adding a new class of orders to be accommodated in addition to the three classes that were announced in June.
"We deeply regret the problems encountered during the initial public offering of Facebook," said Robert Greifeld, chief executive officer and president of the NASDAQ OMX Group.
Nasdaq noted that the independent Financial Industry Regulatory Authority has agreed to evaluate claims submitted by firms under the voluntary accommodations program.
Nasdaq stated that the program will provide accommodations under certain conditions involving four kinds of orders that were placed during the IPO cross: Sells priced at $42 or less that did not execute; Sells priced at $42 or less that executed at an inferior price; Buys priced at $42 that were executed in the cross but not immediately confirmed; Buys priced above $42 that were executed in the cross but not immediately confirmed and were attempted to be cancelled.
Under the proposed program, members will have seven days to make an accommodation request following approval of the program by the Securities and Exchange Commission or SEC. It is anticipated all compensation under the accommodation plan will be provided within six months.
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by RTT Staff Writer
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