The one time payout would aim to subside the discontent among banks and trading firms who experienced technical difficulties and losses during the IPO's opening. The Securities and Exchange Commission still needs to approve the payouts, which seems to be small. Collective losses have been estimated by some to exceed $100 million.
Investors put the blame on Nasdaq after a shaky opening day.
The stock opened on May 18 after a 30 minute delay, which itself spread confusion among traders. Traders complained they were not able to confirm changes or cancellations made to Facebook orders starting as early as 4:30 a.m. PT. Later on in the morning, some traders said they had not received confirmation from Nasdaq that transactions had actually been completed.
Nasdaq representatives previously said it would set aside the $10.7 million the exchange gained from its position in the IPO, along with Nasdaq's standard $3 million system outage cap.
The submitted plan has Nasdaq paying $13.7 million in cash to member firms that suffered losses, including the profit it made from first-day trading. The rest would come in the form of trading discounts.
Three types of transactions will qualify for "accomodations," Nasdaq said:
Sell orders priced at or below $42 a share that didn't execute
Sell orders priced at or below $42 that executed at an inferior price
Buy orders priced at $42 that were executed but not immediately confirmed