Nasdaq Offers Exclusive Home for Small Cap Issuers

Nasdaq is seeking to come to be the distinctive buying and selling venue for the small cap providers that are mentioned on the exchange.

At the moment, small caps have “unlisted buying and selling privileges” (UTP), which make it possible for their shares to be traded on any of the thirteen nationwide securities exchanges even if they are not mentioned there.

But in a letter to the U.S. Securities and Trade Commission, Nasdaq claimed providers that have an ordinary everyday buying and selling quantity of significantly less than a hundred,000 shares in every of the prior 6 months need to be authorized to choose out of UTP and trade solely on Nasdaq.

“Nasdaq proposes to establish a tier nestled within just the U.S. public equity marketplaces that is far better tailored and significantly far more hospitable to thinly-traded securities than is the all-function, undifferentiated sector setting in which they go through today,” it claimed.

The SEC had asked exchanges in October for recommendations on how to cut down sector complexity, indicating a suspension or elimination of UTP may be a worthwhile thought.

As S&P International Market place Intelligence reports, the suitable providers “are significantly smaller than the home names that represent the other 53% of Nasdaq’s mentioned securities,” accounting for 2.6% of the overall sector capitalization of all of its listings.

But Nasdaq believes its proposal would really encourage far more SMEs to tap the public equity marketplaces, citing its First North Progress Market place in the Nordic states as a product.

“We have to have to make development on this,” Tal Cohen, who heads Nasdaq’s North American sector companies business, advised S&P. “It’s time for the market, the SEC and the exchanges to display issuers and investors that we’re severe about this.”

Rival exchanges, nonetheless, are anxious that listing exchanges would have outsized affect around the shares solely offered on their venues.

“[Nasdaq’s] proposed take care of is to restrict buying and selling to a single nationwide securities exchange, featuring a single sector construction,” Cboe International Marketplaces advised the SEC in December. “The irony of this resolution is not missing on Cboe.”

Nasdaq claimed it would not impose any distinct price on existing sector data products for holding info about thinly-traded securities whose issuers terminated UTP.

NASDAQ, small cap providers, U.S. Securities and Trade Commission, unrestricted buying and selling privileges