SEC Delays Ruling on Nasdaq’s Payout Proposal for Facebook IPOInyoung Hwang
The U.S. Securities and Exchange Commission delayed a ruling on Nasdaq Stock Market’s proposal to compensate brokers that lost money in the initial public offering of Facebook Inc. in May.
The SEC needs more time to review Nasdaq’s payment plan and comment letters, the regulator said in a notice today on its website. The new deadline is March 29, it said. The SEC has received six additional letters and a second response letter from Nasdaq since it last extended the deadline on Oct. 26, according to the filing.
The operator of the second-largest U.S. equity exchange increased a plan to pay brokers for losses incurred because the exchange’s so-called opening cross, which sets the first traded price for Facebook, failed to operate properly on May 18, according to a July proposal.
The exchange’s failure to disseminate confirmations about orders submitted into that opening cross for more than two hours led to investor and brokerage confusion about transactions and prevented them from taking actions to reduce their risks.