The U.S. Securities and Exchange Commission (SEC) has approved a plan submitted by The Nasdaq OMX Group Inc. (NASDAQ: NDAQ) that provides up to $62 million in compensation for investors who lost money during the debacle that was the Facebook Inc. (NASDAQ: FB) initial public offering (IPO). Nasdaq itself sought the SEC’s permission to reimburse investors by adding a subsection to its rule limiting claims payments to $500,000 in any given month.

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.

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