Nasdaq seeks lenient norms to lure desi cos - ET

The year 2007 could see a fierce battle between two leading stock exchanges in the world — Nasdaq and London Stock Exchange (LSE) — to bring Indian firms in its fold.

Nasdaq has sought approval from Securities Exchange Commission (SEC) for a new trading platform with less-stringent guidelines. The move is intended to listing more companies on the exchange which could give run for its money to Alternative Investment Market (AIM) of LSE, the preferred destination of midcap Indian companies for last two years.

Sources close to the development informed that Nasdaq has launched a new portal in December 2006 which could be evolved as a trading platform with less-stringent norms. Interestingly, 14 Indian companies have so far registered to the portal.

Some of these are Bajaj Hindusthan, Cipla, Central Bank, Gail India, Kotak Mahindra Bank, Reliance Petro, Suzlon Energy, TCS and Tech Mahindra. It may be noted that Nasdaq is operating a portal from 1990. This facility provides regulatory review to ensure eligibility for the clearance and of securities through the DTC (depository trust company).

“Now Nasdaq has sought SEC approval for the portal market system for secondary trading in 144A securities among QIB’s , qualified brokers and dealers,” sources added. The section 144A of SEC allows private placement without SEC registration and US Gaap compliance.

LSE launched AIM around two years back for companies which cannot comply with the stringent guidelines of the main market. In last two years (2005 and 2006) 13 Indian companies got listed on AIM. On the contrary, the number of Indian companies listed on Nasdaq remains the same because of the stringent guidelines.

The Indian companies listed on Nasdaq are Infosys, Rediff and Sify. Besides, there are five companies listed on Nasdaq which has its main business interest in India like Cognizant. Sources pointed out that Nasdaq has over 2,600 QIB’s so the alternative market in the exchange will have an adequate depth.