Source: Nasdaq OMX
The Nasdaq OMX Group (Nasdaq:NDAQ) (NASDAQ OMX) today announced the effectiveness of a rule change approved by the Securities and Exchange Commission that permits 144A equity securities that use alternative settlement processes to be included in NASDAQ OMX's PORTAL system.
"Rule 144A equity securities that use alternative settlement processes may now be quoted, traded and to otherwise enjoy the benefits of the PORTAL market," said John Jacobs, Executive Vice President, NASDAQ OMX.
"This is a necessary and important milestone towards creation of the open, industry-standard facility planned by The PORTAL Alliance that includes trading, shareholder tracking, clearance and settlement."
In November 2007, NASDAQ and 12 leading securities firms previously announced their intention to form The PORTAL Alliance, an industry standard facility designed for the private offering, trading, shareholder tracking and settlement of unregistered 144A equity securities sold to qualified institutional buyers ("QIBs"). The collaboration is subject to the execution of a definitive agreement and regulatory approvals.
Alternative settlement arrangements are mandated by issuers of 144A equity in order to monitor the number of security record holders for purposes of determining their reporting obligations under Section 12(g) of the Securities Exchange Act of 1934. PORTAL will work with third-party service providers specializing in shareholder tracking for greater efficiency, while providing the issuers of tracked securities and their investors with the enhanced trading functionality and transparency of the PORTAL system.