Another Market for Unregistered Trades
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NEW YORK, Aug. 14 -- A group of Wall Street titans is creating a rival venue to Goldman Sachs Group's private system to trade the stocks of companies that don't want the scrutiny and regulatory burdens of going public.
Citigroup, Lehman Brothers Holdings, Merrill Lynch, Morgan Stanley and Bank of New York Mellon on Tuesday said they had established the Open Platform for Unregistered Securities. The firms say OPUS-5 "will provide trade reservation, shareholder tracking and transfer management for privately offered equity securities."
Bank of New York Mellon will act as administrator of the system, which is intended to "promote liquidity and efficiency for qualified institutional buyers" who trade unregistered equity securities "and enhance issuers' capital raising efforts." The firms said more securities firms are expected to participate in OPUS-5 over time. The market plans to launch next month.
Goldman Sachs unveiled its system, called GS TRuE, in May. Nasdaq's new market for smaller, unregistered securities opens Wednesday.
These markets will generally be closed to individual investors. Goldman's market is open only to large institutional investors with assets of more than $100 million. The markets also reflect a business backlash against increased regulation of public-company accounting practices.
At the time they launched their own system, Goldman executives said they did so without asking rival securities firms to participate to ensure control over the number of investors in any particular security. That was crucial, they said, because any company that has more than 499 investors must register as a public company.
