A new stock exchange focused on long-term investing has applied to the Securities and Exchange Commission, the agency said.
The SEC on Nov. 30 published a notice of the Nov. 9 application by Long-Term Stock Exchange and called for comments on whether to approve the proposed exchange. The public has 45 days to comment on the application.
The Silicon Valley-backed startup's website calls its proposed exchange "a new ecosystem" that would reduce short-term pressure on companies. "By creating a new set of standards (subject to SEC approval) designed to support the methods of experimentation and scaling that modern companies use to find continuous success, the LTSE aims to open the way for innovation and value creation for all companies, far into the future," the website said.
LTSE's baseline listings would be similar to those of IEX Group, New York Stock Exchange and Nasdaq, with further additions "designed to empower and reward long-term-focused companies and the investors who support them," LTSE said, by addressing voting, executive compensation, disclosure, board structure and stakeholder policies from the perspective of "true long-term holders," the website said.
If its application is approved by the SEC, LTSE intends to accept National Market System stocks.
"The commission will take any comments it receives into consideration in making its determination about whether to grant LTSE's request to be registered as a national securities exchange," said the SEC, adding that it will grant the registration if it finds that Securities Exchange Act rules and regulations are satisfied. At least one commissioner, Robert Jackson Jr. has expressed concerns that the new structure could give company founders an advantage over other shareholders.
IEX Group withdrew a proposal to partner with LTSE. IEX spokesman Gerald Lam said the decision was made to give investors more time to study LTSE's rules and structure but that IEX supports the focus on long-termism.