A registered venue does not register the shares traded on it

The record

Nasdaq Private Market's own site describes two lines of business: company-led tender offers, which it calls "scalable, company-controlled programs that let employees sell a portion of their vested equity at a defined price, within a defined window," and an Investment Platform through which accredited investors buy into and sell shares of pre-IPO companies. The site's own footer disclosures name the regulated entities behind those services: NPM Securities, LLC, "a member of FINRA/SIPC and a wholly-owned subsidiary of Nasdaq Private Market, LLC," that "operates an SEC-registered alternative trading system (ATS)"; NFSTX, LLC, a second FINRA/SIPC member also operating an SEC-registered ATS; and SecondMarket Financial, LLC, described as an SEC-registered investment adviser. A FINRA BrokerCheck record for NPM Securities, LLC (SEC file/CRD number 69312) confirms the firm's registration status as active, with its first FINRA registration approval dated 15 January 2014 and no disclosure filings on record.

What the documents establish

The two records establish different things. The company's own site is Nasdaq Private Market's description of what it offers and to whom; a BrokerCheck record is FINRA's own regulator-maintained data on a specific registered firm, confirming NPM Securities, LLC is in fact an active FINRA-member broker-dealer rather than an unregistered platform. Together they establish that the platform layer facilitating a private-company tender offer or secondary trade can be a registered broker-dealer operating a registered alternative trading system, distinct in kind from an informal, off-platform introduction between a buyer and a seller of restricted stock.

The operating read

Registration at the platform level does not extend to the securities changing hands on it. This is the operative distinction, drawn from the two records rather than stated in either outright: an SEC-registered ATS is a regulated venue for matching buyers and sellers, and a FINRA-member broker-dealer status governs the firm's own conduct, but neither fact registers the underlying private company's stock with the SEC or relieves a seller of the resale restrictions, such as Rule 144's holding period or the issuer's own transfer restrictions, that already attach to that stock. A private-company employee using a platform like this to sell vested shares is still relying on whatever exemption or restriction governs the shares themselves; the platform's registration addresses how the trade is matched and executed, not whether the shares were free to sell in the first place.

What to check before you decide

Before assuming a platform-facilitated sale of private company stock is a registered transaction end to end, check:

• Which entity is actually executing the trade, and is that specific entity's broker-dealer or investment-adviser registration current on FINRA BrokerCheck or the SEC's own adviser database?
• Does the underlying stock still carry transfer restrictions or a right of first refusal under the issuer's own governing documents, independent of the platform used?
• Is the transaction a company-authorized tender offer with a defined window and price, or an open-ended secondary match, since the two carry different documentation?

This entry describes Nasdaq Private Market's own disclosed structure and FINRA's record for one of its subsidiaries; it does not evaluate the platform or any transaction conducted on it.