Does it take three years to register securities?

Yesterday, the US SEC issued an exemption order allowing NASDAQ members to continue to trade (till August 2009) a handful of securities that have not been registered with the SEC nor are deemed to be registered with it. The vast majority of NASDAQ listed stocks are covered by a separate order under which the SEC treats them as registered securities on the basis of the information that they have already filed with the SEC under different statutory provisions. The exemption order that I am focusing on covers only four insurance companies and nine private foreign issuers. Even for these issuers, I can well understand the need for a transitional provision as the NASDAQ converts itself into an exchange, but I am amazed that this exemption lasts for as long as three years. An SEC registration is an expensive and time consuming process, but to the best of my knowledge the time involved is measured in months and not in years. A one year exemption would have been much more appropriate especially when the number of issuers involved is so small.

By granting a three year exemption, the SEC is signaling that it regards the conversion of NASDAQ into an exchange to be a mere change of nomenclature in which nothing substantive changes.

Posted at 4:10 pm IST on Tue, 1 Aug 2006         permanent link

Categories: exchanges, regulation

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