As the deadline hit for firms to submit trading information to the exchange, Nasdaq OMX Group Inc. (NASDAQ:NDAD) extended the date on Wednesday for loss requests from the Facebook Inc (NASDAQ:FB) debacle.
The postponement came in an effort to enable regulators to review the proposal before the exchange attempts to compensate members who lost money from the opening of trading for Facebook stock.
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In a notice to its members on Wednesday, the exchange said “The new deadline will be identified in the rule filing establishing the Program. Nasdaq will communicate more information as it becomes available.”
Two weeks ago Nasdaq OMX unveiled $40 million plan in cash and discounted trading fees to account for the losses. Right away it didn’t go over well as criticism quickly came from the other financial exchanges; they interpreted the plan as a way for Nasdaq to increase its trading business in market share while brokers expressed concern the proposed sum wouldn’t be enough for their losses.
According to the Wall Street Journal, the comprehensive effect from the unconfirmed Facebook trades has been estimated at hundreds of millions of dollars.
Nasdaq has not submitted the criticized compensation plan to the Securities and Exchange Commission; they will need to approve it. NYSE Euronext (NYSE:NYX) and Direct Edge Holdings LLC plan to have their executives write formal complaints to the agency.
Firms that incurred losses during Facebook Inc (NASDAQ:FB)’s May IPO on Nasdaq OMX’s exchange sent documentation regarding the losing trades to exchange officials within three days of that inaugural trading session, reported the Wall Street Journal.
To help determine compensation needs, Nasdaq OMX looked for help from the Financial Industry Regulatory Authority (Finra) to review the trading and then submit a report to them. It also asked firms to submit data a second time for the report. This information was due on Wednesday but now it’s yet to be determined.