Nasdaq Private Market (NPM) has announced a new service to transfer and settle securities regardless of the trading venue. NPM serves institutions and individuals by providing liquidity for private shares. Founded in 2013, NPM provides solutions for private companies pre-IPO, including pre-direct listing continuous trading.
NPM’s Transfer and Settlement Solution (T&S) is built for private companies, broker-dealers, and investors. The goal is to support administrative activities associated with the transfer and settlement of private company shares, and NPM states that it is offering T&S at no direct cost to private companies.
Chief Executive Officer of Nasdaq Private Market, Tom Callahan, said that companies can stay private for a decade or more before going public. This fact creates a need for liquidity in the “$4 trillion market for private, pre-IPO company shares. ”
NPM explained that there are several contributing factors to settlement latency in the private markets. Transactions typically require approval by the issuer and steps for matching trades can be disorganized, and the general process lacks standardization. At the same time, the number of trade requests and demand in the market continues to grow.
NPM reports that it has executed more than $43 billion in transactional value across over 625 company-sponsored liquidity programs for venture-backed private companies as well as 160,000 individual shareholders and investors.
As the regulatory environment intensifies and public markets naturally decline due to excessive costs, NPM’s services should see rising demand.