Exchange operator Nasdaq OMX Group wants small and emerging companies listing shares on the public markets to be allowed to choose to be traded only on the venue where they are listed so buyers and sellers have an easier time connecting.
Nasdaq CEO Robert Greifeld plans to ask the Securities and Exchange Commission to consider a "liquidity concentration program" at a SEC committee meeting on Wednesday, according to a copy of the presentation obtained by Reuters.
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"Emerging growth" companies - those with less than $1 billion in annual revenue - should be able to determine the period of time, following their initial public offering, during which their shares can only be traded on their listing market, Nasdaq said.
The Jumpstart Our Business Startups, or JOBS Act, was signed into law just over a year ago with the aim of spurring small business growth by relaxing federal securities regulations to make it easier for companies to raise capital and eventually go public.
Many smaller companies have been reluctant to go public because of the high costs involved and the lack of liquidity - the ease with which an asset can be converted to cash - often associated with small-cap stocks.
Companies can list in the United States on the Nasdaq or on NYSE Euronext's New York Stock Exchange. BATS Global Market also runs a listings market for exchange-traded products.
But the shares are traded on 13 public exchanges, up to 50 dark pools, and internally within brokerage firms.
Exchange operators have intensified their lobbying of regulators and politicians to stem the amount of trading that happens away from exchanges, which they say is now approaching 40 percent, creating more opaque markets and distorting stock prices.
Supporters of dark pools - trading platforms where buyers and sellers of stocks remain anonymous and their orders are hidden - say the competition leads to lower trading costs.
While many of the JOBS Act went into effect when it was signed into law, several key sections still require rule-writing by the SEC.
(Reporting by John McCrank; Editing by Leslie Gevirtz)