- Joined
- 12/23/06
- Messages
- 187
- Points
- 28
July 23 (Bloomberg) -- Five of Wall Street's biggest firms are planning a trading system for unregistered securities, seeking to compete with Goldman Sachs Group Inc. in a market on pace for record sales this year, according to people familiar with the plan.
Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Morgan Stanley are developing a system to handle securities sold under so-called 144a market rules, which allow companies to avoid regulations by selling bonds and stock to institutional investors, the people said.
U.S. Bancorp, Countrywide Financial Corp. and St. Jude Medical Inc. joined publicly traded U.S. companies that have raised $41.7 billion from 144a sales in 2007, according to data compiled by Sagient Research Systems Inc. That compares with $48.6 billion during all of last year and the all-time high of $73.6 billion in 2003, Sagient data show. The San Diego-based company doesn't track sales by private companies.
New York-based Goldman, the world's most profitable securities firm, conducted the first sale of unregistered shares in May on its GS TRuE platform. Nasdaq Stock Market Inc., the second-largest U.S. equity exchange, said last week it will enter the market with its Portal system by the end of August.
The Financial Times reported earlier today that Citigroup, Lehman, Merrill Lynch and Morgan Stanley are among firms developing a new trading system.
$100 Million
Rules limit 144a sales to no more than 499 ``qualified institutional buyers'' that each have more than $100 million in discretionary assets.
So-called private placements exempt companies from U.S. Securities and Exchange Commission regulations such as the Sarbanes-Oxley Act that are designed to inform investors about company operations and protect them from fraudulent accounting. The placements are already common for sales of convertible and high-yield bonds.
Citigroup spokesman Steve Cohen, JPMorgan's Kristin Lemkau, Lehman's Kerrie Cohen, Merrill Lynch's Terez Hanhan and Morgan Stanley's Mary Claire Delaney declined to comment. All five companies are based in New York.
The creation of the consortium comes amid a proliferation of markets outside traditional exchanges.
Liquidnet, Bats Trading
Liquidnet Inc., an electronic brokerage that specializes in handling large blocks of stock, is growing by catering to institutional investors who opt to sidestep exchanges and reduce costs. New York-based Liquidnet and other operators of so-called dark pools, which match orders anonymously and don't publicly disseminate quotes, may handle about one of every four shares in the U.S. by the end of the year, up from about 17 percent in 2006, Liquidnet Chief Executive Officer Seth Merrin said in April.
Citigroup in May acquired a minority stake in the U.S. electronic equity market Bats Trading Inc., extending its backing for smaller rivals of NYSE Euronext, which owns markets on both sides of the Atlantic, and Nasdaq. Kansas City, Missouri-based Bats has raised at least $85 million from some of Wall Street's largest firms that are seeking to bolster competition among markets and lower transaction costs.
To contact the reporter on this story: Nick Baker in New York at
Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Morgan Stanley are developing a system to handle securities sold under so-called 144a market rules, which allow companies to avoid regulations by selling bonds and stock to institutional investors, the people said.
U.S. Bancorp, Countrywide Financial Corp. and St. Jude Medical Inc. joined publicly traded U.S. companies that have raised $41.7 billion from 144a sales in 2007, according to data compiled by Sagient Research Systems Inc. That compares with $48.6 billion during all of last year and the all-time high of $73.6 billion in 2003, Sagient data show. The San Diego-based company doesn't track sales by private companies.
New York-based Goldman, the world's most profitable securities firm, conducted the first sale of unregistered shares in May on its GS TRuE platform. Nasdaq Stock Market Inc., the second-largest U.S. equity exchange, said last week it will enter the market with its Portal system by the end of August.
The Financial Times reported earlier today that Citigroup, Lehman, Merrill Lynch and Morgan Stanley are among firms developing a new trading system.
$100 Million
Rules limit 144a sales to no more than 499 ``qualified institutional buyers'' that each have more than $100 million in discretionary assets.
So-called private placements exempt companies from U.S. Securities and Exchange Commission regulations such as the Sarbanes-Oxley Act that are designed to inform investors about company operations and protect them from fraudulent accounting. The placements are already common for sales of convertible and high-yield bonds.
Citigroup spokesman Steve Cohen, JPMorgan's Kristin Lemkau, Lehman's Kerrie Cohen, Merrill Lynch's Terez Hanhan and Morgan Stanley's Mary Claire Delaney declined to comment. All five companies are based in New York.
The creation of the consortium comes amid a proliferation of markets outside traditional exchanges.
Liquidnet, Bats Trading
Liquidnet Inc., an electronic brokerage that specializes in handling large blocks of stock, is growing by catering to institutional investors who opt to sidestep exchanges and reduce costs. New York-based Liquidnet and other operators of so-called dark pools, which match orders anonymously and don't publicly disseminate quotes, may handle about one of every four shares in the U.S. by the end of the year, up from about 17 percent in 2006, Liquidnet Chief Executive Officer Seth Merrin said in April.
Citigroup in May acquired a minority stake in the U.S. electronic equity market Bats Trading Inc., extending its backing for smaller rivals of NYSE Euronext, which owns markets on both sides of the Atlantic, and Nasdaq. Kansas City, Missouri-based Bats has raised at least $85 million from some of Wall Street's largest firms that are seeking to bolster competition among markets and lower transaction costs.
To contact the reporter on this story: Nick Baker in New York at