NASDAQ has teamed up with SharesPost, an electronic platform for trading in private companies, to launch NASDAQ Private Market.
“Built as a company-first platform on industry-leading technology, NASDAQ Private Market will provide qualifying private companies the tools and resources to efficiently raise capital, control secondary transactions, and manage their equity-related functions,” according to a statement.
The platform, launched in March, joins a small number of similar electronic exchanges, including SecondMarket, SharesPost, NYPPEX and Secondcap. When SecondMarket launched in 2009, secondaries market players reacted coolly.
“The complexity of the transactions, which often comprise a mixture of different positions and assets, as well as tax and accounting issues, mean that only a few trades at the simplest end of the spectrum will ever get done,” one secondaries investor told us.
For NASDAQ Private Market, securities-related services will be offered through a wholly-owned broker-dealer and SEC registered alternative trading system, NPM Securities, said NASDAQ.
Further services will be offered through a “global network of registered broker-dealers” which NASDAQ said represents qualified institutional buyers, family offices and other accredited investors.
Private Market president Greg Brogger said member broker-dealers and their investor clients would benefit from greater access to “financial information, transaction flow and liquidity”.
Minimum entry requirements set by NASDAQ include a minimum AUM for market participants of $50 million, with an annual net income of $750,000.
Founded five years ago, SharePost’s trading platform has helped private companies, their shareholders and qualified investors facilitate trades on the online secondaries market. According to its website, the platform has completed more than 2,000 private company transactions totalling $1 billion since 2011.