The Nasdaq Stock Market, Inc. announced on Wednesday that its new centralized trading and negotiation system for 144A securities had commenced operations. The fully automated Web-based platform, an outgrowth of NASDAQ's 17-year old PORTAL system, is the first and only centralized electronic system for displaying and accessing trading interest in 144A issues.
Rule 144A is a Securities and Exchange Commission (SEC) regulation which modified the two-year holding period (safe harbor) requirement on privately placed securities, thereby allowing qualified institutional buyers (QIBs) to trade these positions among themselves.
According to Nasdaq, the new PORTAL system is now available to all qualified users. It is intended to improve the efficiency and transparency of the private placement market, and to encourage capital formation.
"The launch of NASDAQ's PORTAL trading platform is a milestone in the transformation of the capital raising process in the US," observed Nasdaq Executive Vice President John Jacobs.
He went on to suggest that:
"The PORTAL platform will bring the same efficiency and transparency to the 144A market that NASDAQ brought to public equity trading in the US 36 years ago."
The PORTAL Market has this year alone designated more than 1,700 144A equity and debt securities as PORTAL securities, compared to nearly 2,700 in all of 2006.
Following the launch of the centralized trading and negotiation system for 144A equity securities this week, Nasdaq announced that it intended to phase in debt securities in the fourth quarter.
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