01.31.2017
By John D'Antona

NEO Exchange Gets SEC Nod

Canada-based NEO Exchange just got the OK from the U.S. Securities and Exchange Commission to trade more securities, offer traders additional safety and possibly boost its listings business.

NEO received “designated offshore securities market” status from the U.S. market regulator, according to Jos Schmitt. As of January 5, 2017, NEO listed companies and their shareholders can now rely on certain safe harbor provisions as provided by Regulation S under the Securities Act of 1933.

Jos Schmitt, NEO Exchange

Rule 903 of Regulation S provides a safe harbor for offers and sales of securities by issuers and others in offshore transactions and to non-US persons, without registration under the 1933 Act. For shareholders, Rule 904 of Regulation S provides a safe harbor for resales of securities on the NEO Exchange, as the designated offshore securities market status allows such transactions to qualify as offshore transactions under the 1933 Act.

The certification is akin to ‘Good Housekeeping’ seal, corporations can feel more confident considering the NEO Exchange as a listing venue of choice.

By receiving this SEC status, NEO has taken a step towards growing into a larger venue as the designation recognizes a higher-caliber regulatory framework of the bourse, governing its structure, organization, and reporting standards.

“Receiving this SEC status is a major achievement for the NEO Exchange,” said Michael Wilson, Chairman, Barclays Canada, and a director of Aequitas Innovations Inc. and former Canadian Finance Minister and Ambassador to the United States. “This designation speaks to the high caliber regulatory framework of NEO, governing its structure, organization, and reporting standards. Corporations can feel confident considering the NEO Exchange as a listing venue of choice.”

Jos Schmitt, CEO of NEO, told Traders Magazine that the process of certification took two months.

“Being designated an offshore securities market by the SEC is very important to NEO because it means restricted securities – in the case of NEO securities issued outside of the United States – may be bought or sold on the NEO Exchange by US citizens,” Schmitt said. “It allows US investors to feel confident that they are in-line with SEC regulation by investing in and trading a security listed on NEO.”

Furthermore, Schmitt said that by getting the designation can open up future listings opportunities.

“This is also very important for our future corporate listings, as it gives them the confidence that US investors can access their securities without having any concerns,” he told Traders. “Holistically, this SEC designation is another step in our commitment to ensure NEO-listed securities reaches the broadest possible audience, both at home and abroad.”

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