[ by Howard Haykin ] The Nasdaq OMX Group and The Nasdaq Stock Market has filed a proposed voluntary accommodation program with the SEC for qualifying members hampered by technical problems during the Facebook IPO on 6/18/12.  The final plan modifies the preliminary program announced on 6/6 in a number of ways:

• program provides for a priority of accommodation to customers of members.
• all accommodations will be paid in cash, simplifying the process, eliminating trading credits from the earlier proposal.
• after careful analysis, program has broadened the eligibility by adding a new class of orders to be accommodated in addition to the 3 classes announced in June.
• program creates a $62 million fund for voluntary accommodations, $22 million larger than the June proposal.

"We deeply regret the problems encountered during the IPO of Facebook. We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers. We have learned from this experience and we will continue to improve our trading platforms.'' -- Robert Greifeld, CEO, President of the Nasdaq OMX Group. FINRA has agreed to evaluate claims submitted by firms under the voluntary accommodations program. Nasdaq OMX has issued an Equity Trader Alert advising members on how to request accommodations. It is important for an understanding of the program to refer to the SEC filing that will be posted on our website. The program will provide accommodations under certain conditions involving 4 kinds of orders that were placed during the IPO cross:

1. Sells priced at $42 or less that did not execute.
2. Sells priced at $42 or less that executed at an inferior price.
3. Buys priced at $42 that were executed in the cross but not immediately confirmed.
4. Buys priced above $42 that were executed in the cross but not immediately confirmed and were attempted to be cancelled.

In calculating trading losses, the loss will be the lesser of:

1. Difference between the expected execution price in the cross at opening of $42 and the actual execution price received; or
2. Difference between the expected execution price in the cross at opening of $42 and a benchmark price of $40.527 (the VWAP of Facebook stock on 5/18/12, between 1:50 pm and 2:35 pm).
3. All claims under category 4 above will be reduced by 30%.

The filing of the proposed accommodation plan begins a comment period with the SEC. Under the proposed program, members will have 7 days to make an accommodation request following approval of the program by the SEC.  Details of how members may file will be posted on our website. It is anticipated all compensation under the accommodation plan will be provided within 6 months. For further details, go to:  [Traders Magazine, 7/23/12].