SEC Postpones Ruling on Nasdaq's Facebook Plan

WASHINGTON—U.S. regulators are taking more time to decide whether to approve Nasdaq OMX Group Inc.'s plan to make up losses for firms damaged in this past May's botched Facebook Inc. stock-market debut.

The Securities and Exchange Commission said in a notice on its website Monday that it needed additional time to review "legal and policy issues" raised by the $62 million proposal. Some large banks have decried the plan as woefully inadequate.

The SEC said in its notice that market participants have already raised questions about whether Nasdaq's plan "would promote just and equitable principles of trade, protect investors and the public interest, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers."

In July, Nasdaq proposed a $62 million, all-cash compensation package that would be split up among afflicted firms—a plan that itself was modified after an outcry over the terms of the original $40 million proposal of cash and discounted trading fees. Estimates of Wall Street's total losses in the Facebook debut on May 18 have been put at some $500 million.

The SEC had to approve the latest Nasdaq plan by Tuesday or else act as it did to formally extend its consideration. The commission now has until the end of January to approve the plan, or it may delay a final decision until late March.

A Nasdaq spokesman declined to comment on the SEC's decision Monday.

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