The PORTAL Market - Transforming the Capital Formation Process

NASDAQ has managed the process to designate 144A securities as "PORTAL securities" since 1990. Serving the investment needs of broker-dealers, qualified institutional buyers (QIBs) and private and public companies from around the world, the PORTAL Market facilitates the quoting and trading of unregistered securities eligible to be resold pursuant to SEC Rule 144A. PORTAL provides review of qualified 144A equity, fixed income and derivative securities for access to the clearance and settlement services of the Depository Trust Company (DTC).

Now, with 17 years experience designating and servicing 144A market securities, NASDAQ is uniquely qualified to build the 144A market of the future. NASDAQ will launch a new trading system exclusively for 144A debt and equity securities providing a transparent, one-stop solution from negotiation through settlement.

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The PORTAL Online Application System

NASDAQ offers an online application system for processing 144A security applications seeking PORTAL designation. This online service allows issuers and their advisors, such as investment bankers and general counsels, to manage the application process and the information delivery requirement seamlessly through a convenient web-based product.

The PORTAL Market Trading System

NASDAQ is leveraging its industry leading technology and expertise in electronic market structure to develop the next generation of the PORTAL Market - a fully electronic, closed PORTAL Market trading system for qualified entities to quote and trade 144A securities. Through enhanced trading and informational transparency and efficiency, NASDAQ hopes to increase the opportunities for capital formation and improve the liquidity in secondary market trading for 144A securities.

Key Features
  • All PORTAL eligible equity, derivative and debt
  • Indicative quote display in price or alternative yield options
  • Order negotiation
  • Pre-trade anonymity on quotes and orders
Quote Management
  • Manual quote update
  • Indications of interest
  • Price or yield-based entries
  • Symbol or CUSIP entries
Orders
  • Preference - direct a negotiation to a specific MPID
  • Broadcast - solicit an invitation to negotiate with any participant
  • Non-negotiable - price or yield and quantity firm
Execution and Post Trade
  • Negotiation via order delivery
  • Real-time trade reporting and clearing via NSCC
Order Types
  • Symbol or CUSIP based entries
  • Limit orders only
  • Time-in-Force
    • Immediate or cancel
    • Up to 99 minutes on counter
  • Price or yield-based
  • Quantity in actual shares
  • Attributable and pre-trade anonymity
  • MAQ
    • All-or-None
    • Any
    • Non-Negotiable
PORTAL Montage
Displays top-of-file in actual shares for each quoting participant's MPID and PRTL MPID for unattributed quotes, ranked in time/price priority.
  • Aggregate size is displayed at each price level
  • Unpriced indications of interest rank lowest
  • High/Low/Last/Volume and trade blotter represent current day trades
  • Alternative display for Bonds allows yield-based options
    • Current Yield
    • Yield to Maturity
    • Yield to Call
Hours of Operation
Quote Entry                                                             7:30 a.m. - 6:30 p.m.
Entry, Negotiation, Trade Reporting, Clearing         8:00 a.m. - 6:30 p.m.

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What is Rule 144A? - An Efficient, Low-Cost Way to Access U.S. Capital and Institutional Investors
U.S. Securities and Exchange Commission (SEC) Rule 144A allows for the immediate resale of private placement securities among qualified institutional buyers (institutions that manage at least $100M in securities and are referred to as QIBs) without requiring public registration. This provides efficient access to U.S. capital at a lower cost than traditional public U.S. offerings. Companies from all over the world have used Rule 144A to raise capital and increase their company's profile with U.S. institutional investors including banks, savings and loan institutions, insurance companies, investment companies or employee benefits plans.

The Benefits of 144A for Public and Private Companies
SEC Rule 144A provides public and private companies with another option for effectively raising capital in the U.S. Thousands of public companies raised 144A capital as a transitional step toward a U.S IPO. With private placement capital in hand, companies have the time and flexibility to grow the business, evaluate options, gain experience and develop more accurate pricing, all of which can help lead to a more effective IPO.

Many global companies have found that using the private 144A market via PORTAL as a first step to becoming publicly traded in the U.S. offers significant advantages. That's why in 2006, 7 of the top 10 IPOs raised capital using a 144A tranche* and why the 144A market has grown so substantially in the past five years. In 2006 over $1.5 trillion was raised globally in the 144A market.* Additionally, for the first time, 144A equity capital raised, including PORTAL designated securities, exceeded the amount raised on NASDAQ, NYSE and Amex combined.*

* Source: Thomson

Download an Introduction to 144A and the PORTAL Market