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LTSE uses something called the Very Simple Market, which has some benefits over the legacy platforms. A brief summary is here:

https://ltse.com/blog/introducing-the-long-term-stock-exchan...

LTSE has a different business model, so hopefully things will turn out differently

not that I'm aware of, unfortunately

We don't have such a guide yet, but it's a good idea. At the moment, all of our stocks are available through every legacy brokerage. Some brokers allow you to specify when you do a trade which venue the trade gets routed to, and you can specify LTSE today for that purpose.

I do expect over time listed companies will develop special rewards and benefits for long-term investors. Our rules are designed to make sure that any such programs are equally available to retail investors to casually join in, as you say

thanks!

The short answer is "yes" but there's a lot of nuance to it. Reg NMS does not require routing of anything - a very common misunderstanding. Reg NMS does not get you the "best price", it prevents the execution of trades at prices inferior to protected quotations displayed by other exchanges.

That is only one of two fundamental purposes of exchanges, historically speaking. Listing standards are at least equally as important

I happen to like that idea but as far as I know no company has tried it (yet)

I don't have the citation handy, but I'll keep an eye out next time I go through my archives and see if I can dig up a link. It's a fascinating branch of research, imho

At the present moment, this is illegal in the US. Some day things may change, but that's where things stand right now

I actually agree with you. Exchanges are regulatory bodies (so-called SROs) in our capital markets system. We think there should be a new one with different incentives to do a good job for companies

We looked into this extensively before deciding to pursue an exchange, but found it just isn't workable. Investors simply don't believe a "certification" is especially binding, as companies can easily undo the certification at any time.

People today think of exchanges as just platforms to facilitate trading, but historically this is not how they used to be seen. Exchanges have always had a dual role, as avatars of corporate governance as well as sources of liquidity. We are trying to bring that balance back into the financial infrastructure of capital markets.

Our reforms are fundamentally market-based. We work with companies to develop policies that commit them to the values that they think ensure their ability to pursue their mission long-term. It's not one-size-fits-all and ultimately investors will judge the results. I think you'll see a diversity of companies and views on the exchange, just as you see a diversity of views among our own investors and employees.

Yes, of course. It’s turtles all the way down - that’s how the incumbent exchanges do it too :)

Not that I’m aware of!

We have a governance platform for private companies, used by a lot of YC and other startups

Yes, I think that’s something companies may consider eventually.

XKCD as usual quite prescient about the problems of standardization. I think pretty much everyone agrees with your solution -- so long as their platform is the one that everyone standardizes on!

The sad reality is that because of these issues (and, to be fair, others) most trading is moving off lit exchanges altogether. For some companies we are talking about 80% or more of the volume, and this would be even higher if not for the requirement that day-open and close auctions happen on the "home" exchange.

We have made a proposal to the SEC to bring this off-exchange activity back into the light of the protected quote, but nothing to report at this time about how, when, or if this will come to fruition: https://longtermstockexchange.com/resources/docs/LTSE_Exempt...

It's not quite a simple as the word "lobbying" implies. But we are in active conversations with a lot of the other stakeholders on both the buy side and sell side to see if we can find ways to bring some flavor of this to the markets. But I really can't be more specific because we don't have anything concrete to report - yet.

I will say that I expect companies will also have opportunities to innovate in this area when it comes to their own stock, though I do think it will take a while as the industry is relatively conservative about things like this.

As of today, investing in LTSE listed stocks is 100% backwards compatible with every existing stock trading platform and broker. You literally will not notice any difference.

We intentionally do not offer exclusive listings at this time

I get that you're just being snarky here, but I've often wondered about comments like this. When did being virtuous become an insult? I actually think the ancient view of virtue is due for a bit of a comeback. Increasingly, investors and employees both want to know which companies are actually purpose- and mission-driven and which ones are not. I don't see the harm in giving them a way to signal that, as long as it's real.

I also don't understand the "liquidity" part of your comment either. LTSE is a participant in something called the National Market System which guarantees that every stock listed on every National Securities Exchange has the exact same level of access to liquidity.

Thanks for linking to the previous AMA from when our rules were originally approved. There's actually also one from last year when we began trading stocks, but I don't quite know how to look up the URL right now - while also typing these answers.

Although an earlier version of our proposal did have a voting-rights mechanism, as part of a one-size-fits-all prescription, we ultimately decided against it. Personally, I was hoping to offer "long-term voting" as a principled compromise between standard governance and dual-class shares. But in the interim, dual-class shares have basically won in the market. I'm still hopeful as an industry we will be able to find better solutions in the future

The requirements are embodied in the listing standards of the exchange, and have enforcement mechanisms equivalent to other listing standards. The SEC takes this stuff quite seriously - as they should - so instances of companies violating listing standards are thankfully pretty rare. I expect the same thing here.

In terms of the requirements on trading that you mention, a requirement like that would violate current SEC rules about trading. But remember that companies are the metaphorical "central bank" of their own currency and can do all kinds of things that would reward those investors who truly are committed for the long-term. We don't have anything to announce in this area at this time, but I hope to be able to say more some day.

LTSE work through what are called "principles-based listing standards" which require every listed company to adopt (and publish) a concrete policy that shows how they are committing to each specific principle. LTSE has a regulatory team that acts as a certifying agency. So while we don't have a one-size-fits-all policy that every company must enact on, for example, executive comp, they do have to make real, concrete commitments in that area in order to be listed.

In terms of trading, we don't currently have any rules of the sort you mention. Under today's regulatory framework, this would be hard (but not impossible) to do. We hope to see more work in this area, but nothing to announce at this time.

Nope, that's a very good idea. I personally don't think long-term investors should have to pay the same price to buy stock as speculators. But in finance this is still considered a very radical notion, so I think it will be some time before we see this idea adopted

Thanks!

The SEC's rules around trading (today) really prohibit a lot of the "obvious" ideas people have had about how to slow down trading. We have some stuff in the works here, but it won't be public for a while.

That said, we have adopted a construct that we call the "Very Simple Market" that eliminates a number of trading "features" such as hidden liquidity. We think this makes it a more conducive environment for the longest-term investors to trade. We also have a business model that is much more aligned with the long-term investors and companies than most incumbents. We don't seek to maximize our trading volume, so that requires us to make money by helping our customers run their businesses better.

As we say in SV, if you're not the customer, you're the product. This applies to issuers as well.

On your latter point, you've got it right. We don't think we have an exclusive on good ideas, and there's definitely examples where talented founders have found ways to build for the long-term in spite of the existing market structures.

But when was the last time you heard a CEO say that they were able to think long-term _because_ of the markets in stead of in spite? That to me is a key difference

The research is pretty clear that companies run in a long-term way are more profitable, resilient and lead to better returns for investors. I can't speak to which stocks will do better than others, but we built the listing standards to match the actions seen to drive long-term performance.

It's definitely not for everybody!

If/when the regulatory framework exists to do this in a compliant way, we would be open to it