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NASDAQ OMX private market now open

First Published 5th March 2014

NASDAQ Private Market launches new marketplace for private companies.

Bob Greifeld, CEO, NASDAQ OMX

Bob Greifeld, CEO, NASDAQ OMX

"We are excited to support the launch of NASDAQ Private Market and to extend our product offering to private companies."

San Francisco and New York - The NASDAQ Private Market has launched its new capital marketplace for private companies. Built as a company-first platform, NASDAQ Private Market aims to enable qualifying private companies to raise capital, control secondary transactions, and manage their equity-related functions. Securities-related services will be offered through a wholly-owned broker-dealer and SEC registered alternative trading system, NPM Securities, LLC, member FINRA/SIPC. Member Companies on NASDAQ Private Market can also connect with its network of registered broker-dealers representing qualified institutional buyers as well as family offices and other accredited investors.

"We are excited to officially open NASDAQ Private Market for business," said Greg Brogger, President of NASDAQ Private Market. "We listened to the needs of private growth companies and developed NASDAQ Private Market to serve as a fully integrated end-to-end solution for managing their equity functions. NASDAQ Private Market will bring liquidity, efficiency and control to private companies. Member broker-dealers and their investor clients will benefit from greater access to financial information, transaction flow and liquidity."

"A critical component of the NASDAQ OMX mission is providing support to the innovators and entrepreneurs in today's marketplace," said Bob Greifeld, CEO of NASDAQ OMX. "For over 40 years, NASDAQ OMX has been committed to serving the needs of companies for their entire life cycle - whether emerging growth companies or mature corporations. We are excited to support the launch of NASDAQ Private Market and to extend our product offering to private companies with this new efficient and transparent market."

A Platform for Controlled Liquidity

To assure a community of quality private companies, member companies must meet NASDAQ Private Market's membership requirements.

Companies can use the NASDAQ Private Market platform to manage liquidity programs for employees and other shareholders. These liquidity programs have become an increasingly common tool used by leading private companies to recruit and retain the most talented employees. NASDAQ Private Market supports such programs by enabling companies to identify a pool of potential buyers and set parameters on the percentage of holdings that shareholders can sell. Participating shareholders gain liquidity, and the company is able to facilitate the transition of ownership into the hands of long-term institutional holders.

Compliance with regulatory requirements is critical to the success of these liquidity programs. "The NASDAQ Private Market has been designed to reflect industry best practices and to hardwire tools to assist with securities law compliance into the system," said Steve Bochner, partner and former CEO of Wilson Sonsini Goodrich & Rosati and Chair of NASDAQ Private Market's Board of Advisors. All investors will be accredited by NASDAQ Private Market Member Broker-Dealers. In addition, to ensure investors have appropriate financial information, a Member Company will agree to make certain limited disclosures to those that transact in its shares.

Optimizing the Transition to Public Markets

In addition, NASDAQ Private Market will enable private companies to improve their transition to the public markets by facilitating engagement with long-term institutional investors well in advance of a public offering. By establishing a regular dialogue with investors over the platform, private companies can efficiently build relationships over time with those institutions they are targeting as purchasers in their eventual IPO. Private companies can also enhance their IPO operational preparedness by migrating to the integrated equity management solutions they will need as a public company.

"NASDAQ Private Market gives entrepreneurs more flexibility in deciding if and when to go public," said Bruce Aust, Executive Vice President at NASDAQ OMX and Chairman of the NASDAQ Private Market Board. "By obtaining interim liquidity relief, companies can choose to enter the public markets based on the needs of their business and with the proper corporate solutions and institutional investor relationships in place for a seamless transition."