Nasdaq is preparing to introduce a revised system for brokers and institutions that want to trade securities in the US private market by the end of June, allowing centralized trading for the first time, Financial News has reported.
At present, institutional buyers must find others with which to trade stocks, and there is no price transparency.
Robert Greifeld, chief executive of the US stock exchange, said a three-month comment period with US regulator the Securities and Exchange Commission will begin soon and its Portal system should be ready to launch at the end of it.
He said the change could be as significant to the capital markets as the founding of Nasdaq 36 years ago. Last year, more capital was raised through securities on Portal than on Nasdaq, the New York Stock Exchange and American Stock Exchange combined.
The SEC allows stock to be sold in the US to qualified institutional buyers, without conforming to the registration and disclosure requirements for fully marketed public offerings. In 1990 the rule was amended to allow qualified institutional buyers to trade securities between each another, rather than holding them for two years.
Nasdaq then introduced its Portal system incorporating security authorization and allowing access to clearing and settlement services at the US Depository Trust and Clearing Corporation, but not providing for secondary trading.