Wed, Aug 15th 2007 10:16pm
We've been following the recent rise of private electronic stock exchanges established by the major investment banks for the purpose of offering companies a place to sell stock without being subject to SEC regulations. While there seems to be interest in this model, a potential complication would arise if the various exchanges were incompatible. It would hamper liquidity if a company going "public "on Goldman's exchange, for example, was only open to investors participating on that exchange. According to Dealbook, listing firms are prodding the banks to open up their exchanges to promote liquidity. If this does happen, there's a much better chance of these markets having a significant impact. One other problem that won't be solved easily arises from an SEC rule which states that any company with more than 499 public shareholders is necessarily a public company and thus compelled to abide by the full spate of regulations. If participation is limited to a handful of large investing institutions, this might be okay, but the rule will prevent this system from getting too popular.
If you liked this post, you may also be interested in...
- Congress Might Actually Be Moving Forward On Fixing Outdated Email Privacy Law!
- SEC, DOJ And Law Enforcement Want To Rewrite Email Privacy Law Update... In Their Favor
- Congress Still Fighting SEC's Investigation Of Alleged Insider Trading By Its Members
- How The Federal Reserve's Own Culture Lets Wall Street Get Away With Anything
- Goldman Sachs Asks Court To Have Google Delete An Email With Client Info; Google Blocks Access To The Email