Mumbai: Twelve Wall Street firms that had launched competing platforms for trading unregistered securities known as 144a issues have agreed to join a single platform operated by the Nasdaq Stock Market, the exchange said.
The alliance will work with third-party service providers to create an open, industry-standard facility for the private offering, trading, shareholder tracking and settlement of unregistered equity securities sold to qualified institutional buyers.
Companies are increasingly turning to private investors - qualified institutional buyers with at least $100 million in assets - to raise capital through 144a offerings to avoid the regulatory burden of a public offering.
Nasdaq launched the portal market earlier this year to trade these private placements of stock.
The portal alliance would group Bank of America, Bear Stearns, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS and Wachovia and Nasdaq''''s marketmakers.
In recent months, many securities firms had launched their own 144a platforms, including Goldman Sachs'''' GSTrUE and OPUS-5, started by a group of five banks, including Citigroup Inc, Merrill Lynch, and Lehman Brothers Holdings Inc.
Private-placement market in the US reached $162 billion last year, outpacing the $154 billion value of overall US public offerings, according to Nasdaq data.
"Investors and issuers will benefit from a unified facility that includes trading, shareholder tracking, clearance and settlement," Nasdaq chief executive Bob Greifeld said in a statement.