Nasdaq's launch of trading system for unregistered securities
SIFMA aims to block Nasdaq's launch of trading systemSIFMA has sent a letter to the Securities and Exchange Commission asking to have the launch of Nasdaq's new system for trading in unregistered stocks blocked. The powerful lobbying group says the system, called Portal, may dissuade some brokers from trading in unlisted firms.
Top Wall Street lobby group moves to block Nasdaq
Luke Jeffs
01 Jun 2007
A powerful lobby group representing Nasdaq’s top clients has moved to block a plan by the US equity exchange to launch a new system for trading in private companies.
The Securities Industry and Financial Markets Association, which represents Wall Street’s top institutions, has sent a letter to the Securities and Exchange Commission asking the US regulator to block Nasdaq’s proposed system for trading in unregistered stocks. The system is called Portal.
SIFMA has claimed the Nasdaq system, which plans to display quotes for unlisted shares after its launch in the third quarter, may discourage brokers from trading in unlisted companies.
The Association has said there are number of areas, such as trade reporting and the nature of subscriber agreements with Portal participants, that need to be clarified.
Robert Greifeld, the chief executive of Nasdaq, announced his proposal to upgrade its system for trading in privately held companies at a SIFMA conference in New York last month.
John Jacobs, executive vice-president and chief marketing officer at Nasdaq, said: “Portal is an open system which can be used by any firm so there will be no need for banks to set up their own proprietary systems.”
The exchange has 50 participants lined up to use the new system.
According to Nasdaq, $162bn (€120.5bn) was raised through private placements last year compared with $154bn from public offerings on the New York Stock Exchange, American Stock Exchange and Nasdaq combined.
Goldman Sachs launched a rival system last month, called Goldman Sachs Tradable Unregistered Equity market. GSTrUE can be used for deals which have been led by the bank.
Deutsche Bank analysts said in a report: “We view Goldman’s development of its own private offerings market as both a positive and negative for Nasdaq. The obvious negative is competition from a very smart and well capitalised competitor. The positive, in our view, is validation that the market does offer strong potential.”
The SEC allows stock to be sold to qualified US institutional buyers, without conforming to the registration and disclosure requirements for fully marketed public offerings.
SIFMA was formed last year when the Securities Industry Association and the Bond Market Association merged.
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Labels: 144a, dark pools, NASDAQ, portal, private trading systems, unregistered stock
posted by Victor Lloyd Smith @ 5:57 PM
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