Nasdaq Private Market launches service to improve settlement of private company shares
26 April 2023 US
Image: Moj Gfx
Nasdaq Private Market (NPM) has launched a service to settle private company transactions, regardless of trading venue.
NPM’s Transfer and Settlement Solution (T&S) has been designed to outsource the complex and non-core administrative activities associated with the transfer and settlement of private company shares.
The offering will provide an end-to-end share transfer workflow and dashboard for private companies, and the broker-dealers that serve them, to better manage and monitor private stock transactions.
T&S aims to address many of these systemic issues of the settlement process by storing and populating stock transfer agreements (STAs) and centralising stock transfer notice (STNs) requests.
T&S ensures issuers can verify holdings prior to transfer execution and download complete investor questionnaires, while brokers and issuers can review buyer and seller submissions.
It also includes issuer and broker-specific processes to interact with participants such as custom STNs and provides buyer and seller onboarding, Right of First Refusal (ROFR) processes, STAs and flow of funds.
Users can monitor trade activity in real-time through various dashboards, to track STA execution, view submissions, participants and transfers in progress.
In addition, T&S collects and stores payment instructions for buyer and seller entities, creates custom flow of funds for broker commissions and issues transfer fees as well as seller proceeds.
Through T&S users can also access historical events to review previous transfers, download company reports and use secondary trade data to compare transactions against peers on an anonymised basis.
Tom Callahan, CEO of NPM, says: “Demand for a trusted, efficient platform to trade private company stock has never been greater. Effective, reliable settlement is the foundation of liquidity in any asset class.
“T&S automates each step of the settlement process in private company trades, in some cases completing it inside of a week, rather than the 90 to 120 days that has been typical in this market. This will allow the largest and most sophisticated market participants to trade with confidence in the private markets.”
NPM’s Transfer and Settlement Solution (T&S) has been designed to outsource the complex and non-core administrative activities associated with the transfer and settlement of private company shares.
The offering will provide an end-to-end share transfer workflow and dashboard for private companies, and the broker-dealers that serve them, to better manage and monitor private stock transactions.
T&S aims to address many of these systemic issues of the settlement process by storing and populating stock transfer agreements (STAs) and centralising stock transfer notice (STNs) requests.
T&S ensures issuers can verify holdings prior to transfer execution and download complete investor questionnaires, while brokers and issuers can review buyer and seller submissions.
It also includes issuer and broker-specific processes to interact with participants such as custom STNs and provides buyer and seller onboarding, Right of First Refusal (ROFR) processes, STAs and flow of funds.
Users can monitor trade activity in real-time through various dashboards, to track STA execution, view submissions, participants and transfers in progress.
In addition, T&S collects and stores payment instructions for buyer and seller entities, creates custom flow of funds for broker commissions and issues transfer fees as well as seller proceeds.
Through T&S users can also access historical events to review previous transfers, download company reports and use secondary trade data to compare transactions against peers on an anonymised basis.
Tom Callahan, CEO of NPM, says: “Demand for a trusted, efficient platform to trade private company stock has never been greater. Effective, reliable settlement is the foundation of liquidity in any asset class.
“T&S automates each step of the settlement process in private company trades, in some cases completing it inside of a week, rather than the 90 to 120 days that has been typical in this market. This will allow the largest and most sophisticated market participants to trade with confidence in the private markets.”
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