Monday, May 21, 2012

Equity Trader Alert #2012 - 21
NASDAQ Proposes Policy for Unfilled Orders in the Facebook Inc. (FB) IPO Cross

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NASDAQ Proposes Policy for Unfilled Orders in the Facebook Inc. (FB) IPO Cross

As a result of a technical error occurring during the Facebook IPO electronic opening cross process, some orders, otherwise expected to be eligible for execution, were not executed or were executed at prices other than the opening cross price of $42. Exchange Members impacted by the error are reminded that they may seek financial accommodation from NASDAQ pursuant to NASDAQ Rule 4626 if they submitted IPO cross-eligible orders between 11:11 and 11:30 AM Friday, May 18, that were marketable at the opening cross price of $42.00 and those orders either did not execute or were executed at an inferior price.

In addition, pending review by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the Boards of Directors of NASDAQ OMX and the NASDAQ Stock Market, NASDAQ plans to implement a procedure through which FINRA will review all accommodation requests and related data. After this review, FINRA will provide a report to the NASDAQ OMX and NASDAQ Stock Market Boards regarding the total value of all valid claims. The total accommodation pool shall be the amount approved by the NASDAQ OMX and NASDAQ Stock Market Boards, in their sole discretion, after receiving FINRA's report. Please note that the pool will include all unintended gains from NASDAQ's assumption of transactions during the cross due to the technical error.

As with all claims under Rule 4626, any financial accommodation will be subject to an evaluation of its validity.

Members seeking any accommodation are reminded that claims must be submitted in writing to NASDAQ by noon on Monday, May 21, 2012. Supporting data will be requested in a format to be determined.

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