By Jacob Bunge
Nasdaq OMX Group Inc. (NDAQ) has pushed back the date by which
brokers and traders that lost money in the stock-market debut of
Facebook Inc. (FB) must submit requests for the exchange group to
make up some losses.
Firms were previously told to submit trading information by June
20, but on Wednesday Nasdaq OMX told traders in a notice that the
date was postponed to allow regulators to review its proposal to
compensate members that lost money due to problems opening
Facebook's stock.
Nasdaq OMX unveiled the plan two weeks ago, proposing to address
about $40 million in losses through a combination of cash and
discounted trading fees. The idea quickly drew rebukes from other
exchanges, which saw the plan as a way for Nasdaq OMX to draw more
trading business, and brokers, who raised concerns that the sum
wouldn't fully cover their losses.
The collective financial hit sustained by Wall Street firms due
to unconfirmed trades in Facebook shares has been estimated in the
hundreds of millions of dollars.
Nasdaq has yet to submit its compensation plan to the Securities
and Exchange Commission, which must approve it. Executives of other
exchange operators, including NYSE Euronext (NYX) and Direct Edge
Holdings LLC, have pledged to register formal objections with
regulators.
Firms that suffered losses during the May 18 listing of Facebook
shares on Nasdaq OMX's market submitted documentation of the losing
trades to exchange officials within three days of the session.
Nasdaq OMX soon tapped the Financial Industry Regulatory
Authority, or Finra, to look through the trading and deliver a
report to Nasdaq OMX to help parcel out compensation, and asked
firms to again submit data for that purpose. That information was
due to be submitted Wednesday, but the date now has been postponed
"until further notice," according to exchange officials.
"The new deadline will be identified in the rule filing
establishing the Program," Nasdaq OMX officials told traders
Wednesday in a notice. "Nasdaq will communicate more information as
it becomes available."
Write to Jacob Bunge at jacob.bunge@dowjones.com