NEW YORK ( TheStreet) - -The Nasdaq OMX Group (NDAQ - Get Report) has announced a $40 million compensation plan for financial organizations that lost out in the botched Facebook (FB - Get Report) IPO last month.
The board of the Nasdaq OMX Group has approved a "voluntary accommodations fund" of approximately $40 million, according to a statement. Under the terms of the proposal, which is subject to review by the
Securities and Exchange Commission, approximately $13.7 million would be paid in cash to member firms.
The balance would be credited to members to reduce trading costs, Nasdaq said. All benefits are expected to be delivered within six months for the vast majority of firms, it added.
The Financial Industry Regulatory Authority has agreed to evaluate claims submitted by firms, which follows weeks of speculation about the exchange's compensation plan.Even though the widely anticipated first-day pop failed to materialize, Facebook's IPO saw the Nasdaq struggle with unusually heavy volume. The exchange resorted to manually delivering executions to brokerage houses. Shortly after the IPO on May 18, Robert Greifeld, the CEO of Nasdaq OMX Group, acknowledged technology problems related to Facebook's listing, according to a published media report, saying the exchange was "humbly embarrassed" by the events on the company's debut. In its statement released on Wednesday, the Nasdaq OMX Group said that the technical problems experienced on May 18 have been remedied. Nasdaq has also picked tech giant IBM (IBM - Get Report) to review its processes for designing, developing, testing, deploying and operating market systems. Facebook shares gained 1.16% to reach $26.17 on Wednesday. --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org. Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices.