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NASDAQ Expects Market Modernization to Benefit Small and Mid-Sized Firms

NASDAQ said that technological advances and regulatory changes over the last 10 years have transformed the way that markets function, but small and medium growth firms are not feeling the benefit. The exchange operator is calling for the industry to move past the rigid, one-size-fits-all thinking of that has dominated and leverage technology to benefit these smaller players as part of a package of wider market reforms designed to reignite America's economic engine.

In a report, Nasdaq sets out how it thinks that markets should be modernized to benefit firms with market capitalizations of below US$1 billion, which have suffered because liquidity is now spread so thinly across more than 50 trading venues, none of which controls even a quarter of trading. This thin crust of liquidity can be broken by a single large order, hitting the market's ability to absorb it and hurting the investor who placed it.

NASDAQ believes concentrating that disaggregated liquidity onto a single exchange, with limited exceptions, will allow investors to better source liquidity. The exchange wants to let smaller issuers trade on a market largely exempt from Unlisted Trading Privileges - the regulation that lets exchanges offer trading in securities not listed or registered on them.

News Characteristics

Date : May 05, 2017
Region : North America
Industry : Banks
Function : Regulation and Compliance
Sub-Function : Regulatory changes