The rule change specifically addresses the Facebook IPO. Claims will be paid on four categories of realized or unrealized direct trading losses. Claimants have seven days from SEC’s approval to file written claims for compensation. The Financial Industry Regulatory Authority (FINRA) will evaluate and process the claims.

According to the SEC, payments will be made in two tranches:

First, if the [Nasdaq] member has provided customer compensation, the member would receive an amount equal to the lesser of the member’s share or the amount of customer compensation. Second, the member would receive an amount with respect to covered proprietary losses, however, the sum of payments to a member would not exceed the member’s share.

Payments in each tranche will be prorated if the amount claimed exceeds $62 million.

Of the 17 comment letters received by the SEC, only two approved of the proposed settlement, while 14 objected and one expressed a broader view of exchange liability.

The SEC’s letter is available here.

SharesPost and SecondMarket Inc. are among the exchanges that match early investors, founders and employees wishing to sell shares that are not yet listed on regulated exchanges with buyers who want access to shares in a company that has not yet held an initial public offering. SharesPost, for example, traded pre-IPO shares of Facebook Inc. (NASDAQ: FB) and currently includes trading in Spotify and Violin Memory.

The Nasdaq Private Market (NPM), as the new joint venture is to be called, is intended to provide liquidity to investors and employees of privately funded companies that are now staying private longer before holding an IPO. The new marketplace is expected to launch later this year. pending regulatory approvals.

Those approvals might be a bit tricky to come by. About a year ago, Bloomberg reported that the SEC was looking into the trading practices of SharesPost and another firm, Felix Investments Inc. No action appears to have been taken, but now that pre-IPO market is going mainstream, regulatory scrutiny is likely to be more intense.

The Shanghai index was at a 52-week high, and it took very little news to undermine that. No one should be surprised if many markets around the world are overbought. However, the difference between these markets and the Shanghai index is that the Chinese market is nowhere close to its all-time high. It traded 80% above current levels five years ago. In that way, it is like the Nasdaq, which reached highs in 1999 and 2000 that never will be matched again. Optimism in tech pushed the U.S. index to unsustainable levels.

All of this is to say that, although the market in China has sold off, it may still be inexpensive, at least compared to a period of irrational exuberance reached half a decade ago.

Either there is something very wrong with the Chinese economy, or the drop is little more than a blip, based on historical prices.

IntercontinentalExchange Inc. (NYSE: ICE) was reinstated at Buy with a $170 price target as the transformational acquisition of NYSE Euronext Inc. (NYSE: NYX) is going well with strategic benefits as a result of the deal.

Nasdaq OMX Group Inc. (NASDAQ: NDAQ) was reinstated at Buy with a $34 price target as the exchange has attractive cash flow and optionality, and it is well positioned with more stable non-transaction revenues and can take advantage of new growth opportunities in the near term. It also can target a pick-up in trading activity and can potentially pursue strategic options.

CBOE Holdings Inc. (NASDAQ: CBOE) was reinstated only with a Neutral rating and a $36 target price. The report said:

While we view CBOE as well positioned for a pick-up in trading volumes, to remain differentiated from peers (given proprietary and exclusive products), to take advantage of new growth opportunities, and for management to continue to manage its cost and capital base effectively, given the current valuation, somewhat sluggish volumes, and rising costs, we see limited upside.

Still, it is said to have over 90% of the index option market share.

The Wall Street Journal reports:

The discussions, which haven’t progressed into formal merger talks, illustrate the pressure on exchanges to expand by fusing their operations following a multiyear slide in trading activity.

It also reflects the stepped-up challenge to CME as rivals forge deals to create stronger competition to the Chicago-based company.

Deutsche Börse said in a statement Monday it isn’t in merger negotiations with CME Group and is focused on “organic growth.”

A spokeswoman for CME declined to comment.

In December 2012, the boards of both IntercontinentalExchange Inc. (NYSE: ICE) and the NYSE Euronext Inc. (NYSE: NYX) approved a merger of the two exchanges.

The Wall Street Journal has discussed that private equity player The Carlyle Group LP (NASDAQ: CG) has held discussions with NASDAQ OMX about possibly going private. The talk is that the private equity group approached the electronic trading exchange but it is also said that talks are not ongoing as the two companies did not see eye to eye on price. The tie here is that NASDAQ’s former CFO is now the Carlyle CFO.

We have said that exchange mergers are likely to consider as long investors understand that regulatory risks are present here. The NYSE and Deutsche Boerse were blocked from merging. Other exchange mergers might first be formed by ventures and alliances if they feel that regulators would get involved.

Another issue to consider is that the reason these entities came public in the first place was to unlock the value for the exchange seat-holders and to get access to the capital markets. If a private equity group buys an exchange, chances are high that the exchange will be sold down the road or might even come public yet again in an IPO.

NASDAQ shares are up about 4% at $30.75 at a new 52-week high above the $21.03 to $29.49 share price range of the last year.

The company is also changing its ticker symbol to BBRY and the stock will continue to trade on the Nasdaq. Trading under the new symbol is set to begin February 4.

While the new phones and the new BlackBerry 10 operating system have received favorable notices in advance of today’s launch, technical capability will only take the newly monikered company so far. Competing against Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) with their vast ecosystem of smartphone apps almost dooms BlackBerry to no better than third place in a sector it once dominated.

Even to reach third place it needs to battle the Nokia Corp. (NYSE: NOK) and Microsoft Corp. (NASDAQ: MSFT) combination that released a new phone and operating system last fall. The BlackBerry 10 handset and operating system have arrived a year late. And the company has not yet provided a ship date for the new phones, although one report has the devices available March 1.

Shares are down about 6% at $14.71 following the announcement, in a 52-week range of $6.22 to $18.32.

The real value here is not just the floor operation of the New York Stock Exchange. In fact, that may actually be a drag holding the NYSE value down to under $8 billion today. To prove the point, the NYSE share price of $32.00 and change after the buyout compares to a share price peak above $90 back in 2007 before the recession.

This begs a question. With exchange mergers continuing to take hold, will CME Group Inc. (NASDAQ: CME) with its $17 billion market value go after the Nasdaq OMX Group Inc. (NASDAQ: NDAQ) and its $4.3 billion market value. The CME competes against ICE and the NASDAQ and NYSE are longstanding rivals. The NASDAQ and ICE were looking for a NYSE bid in 2011 and the Deutsche Boerse merger with NYSE was blocked. Recent reports showed that the CME was interested in buying the NYSE.

This brings up a simple yet serious question. Will CME go after NASDAQ? The answer is not so simple. Stay tuned. The global consolidation of financial exchanges is not yet finished.

JON C. OGG

The transaction requires a lot of approvals, including from the European Commission (EC), which in February of this year rejected a $10 billion merger between NYSE Euronext and Germany’s Deutsche Boerse A.G. That deal was killed because the EC said the combined company would have controlled more than 90% of all trading in European derivatives, effectively closing out any potential competition.

Similar mergers in the U.S. have beefed up both the CME Group Inc. (NASDAQ: CME) and the Nasdaq OMX Group Inc. (NASDAQ: NDAQ), but it is not unthinkable that the two might now have to consider their own merger. And certainly CBOE Holdings Inc. (NASDAQ: CBOE) and its stable of valuable commodities options contracts also figure in the mix.

CME, which owns the Nymex, is by far the largest of the three, and the one that could face the most troubles from the NYSE-ICE tie-up. ICE’s electronic trading of crude oil futures is particularly a threat to Nymex, and it will be more of a threat when Brent crude becomes the international benchmark, replacing WTI.

Shares of NYSE Euronext and ICE were halted in premarket trading this morning. NYSE Euronext closed at $24.05 last night, in a 52-week range of $22.25 to $31.25. Intercontinental shares closed at $128.31 last night, with a 52-week range of $110.67 to $142.75.

Paul Ausick

WhiteHorse Finance Inc. (NASDAQ: WHF) was set to offer 6.67 million shares at $15 a share. An unnamed source told Reuters, “This was a human error, this wasn’t a trading system or a computerized glitch.”

The mistake calls to mind the problems that Nasdaq had with the Facebook Inc. (NASDAQ: FB) IPO in March. Unlike the Facebook fiasco, however, no shares of WhiteHorse were issued and all orders were cancelled according to a Nasdaq spokesman.

WhiteHorse issued a press release a few minutes ago saying that the commencement of trading “has been delayed” and that the company is “awaiting confirmation from NASDAQ on a timing window to begin trading which is expected shortly.” Who knows?

Paul Ausick