The US Securities and Exchange Commission (SEC) has approved stock exchange NASDAQ’s new centralised trading and negotiation system for 144A securities – privately placed, unregistered securities under the SEC’s Rule 144A. Following this approval, NASDAQ expects the new system to be available to all qualified users on August 15 this year.
The new system is an update of NASDAQ’s 17 year old PORTAL system. NASDAQ claims the new PORTAL system is the first centralised electronic system for displaying and accessing trading interest in 144A issues. The new system is designed to improve the efficiency and transparency of the private placement market.
“NASDAQ has operated The PORTAL Market since 1990, so we are uniquely qualified to play a significant role in the 144A market of the future,” says NASDAQ executive vice-president John Jacobs. “We believe this centralised automated platform will bring added liquidity and transparency to the 144A market and is a natural progression for NASDAQ given our expertise in electronic trading systems.”
NASDAQ says the private placement market has grown substantially in the last five years. The exchange estimates that the amount of equity and debt capital raised using Rule 144A has grown three-fold since 2002 and exceeded $1 trillion in 2006 for the first time. In the first half of 2007, global equity and debt capital raised in conjunction with a 144A tranche was almost $1 trillion, a 43% increase over the first half of 2006.