It's well recognized that the equity markets work pretty
well for companies that trade in high volumes, but companies with
low trading volumes? Not so much. Thinly traded securities often
face liquidity challenges, including wider spreads, higher
transaction costs, fewer market makers and potential difficulties
for investors that seek to unwind their positions. These issues can
discourage small- and medium-sized enterprises from accessing the
public markets, a problem that the SEC has been anxious to address.
To find potential solutions for these problems, in October 2019,
the SEC solicited proposals for changes in equity
market structure designed to improve the secondary trading markets
for thinly traded securities. Nasdaq has just announced that it has submitted to the SEC an
application for exemptive relief that would
facilitate its proposal "to establish a tier nestled [sounds
very cozy!] within the U.S. public equity markets that is better
tailored and far more
