Delcy P. Sweet is a Associate in our Northern Virginia office
On March 6, 2013, NASDAQ OMX Group, Inc. and SharesPost, Inc. issued a joint press release announcing that they will enter into a joint venture to form a marketplace for the trading of shares of unlisted companies. The new marketplace is to be called The NASDAQ Private Market (NPM) and will "provide improved access to liquidity for early investors, founders and employees while enabling the efficient buying and selling of private company shares."
As an increasing number of companies are choosing to remain private longer, NASDAQ sees NPM as an efficient means to access liquidity for employees and investors and allow private companies to control the marketplace for their shares. Provisions of the JOBS Act will also allow growing companies to remain private longer, so the existence of an efficient marketplace for the unlisted securities of these companies should also make it easier for these companies to remain private and allow NPM an opportunity to thrive.
NASDAQ will own the majority of and will control NPM, including ensuring that industry standards for security, compliance and client support are met, but will use SharesPost's existing trading platforms and infrastructure. NPM's president will be SharesPost founder Greg Brogger. Depending on the speed of regulatory approval, NPM could be operational later this year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
