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May 11, 2019 03:30 am

US Regulators Approve New Silicon Valley Stock Exchange

An anonymous reader quotes a report from Reuters: U.S. regulators on Friday approved a new stock exchange that is the brainchild of a Silicon Valley entrepreneur, a move that will give high-growth technology companies more options to list their shares outside of the traditional New York exchanges. The U.S. Securities and Exchange Commission approved the creation of the Long-Term Stock Exchange, or LTSE, a Silicon Valley-based national securities exchange promoting what it says is a unique approach to governance and voting rights, while reducing short-term pressures on public companies. The LTSE is a bid to build a stock exchange in the country's tech capital that appeals to hot startups, particularly those that are money-losing and want the luxury of focusing on long-term innovation even while trading in the glare of the public markets. The stock exchange was proposed to the SEC in November by technology entrepreneur, author and startup adviser Eric Ries, who has been working on the idea for years. He raised $19 million from venture capitalists to get his project off the ground, but approval from U.S. regulators was necessary to launch the exchange. The new exchange would have extra rules designed to encourage companies to focus on long-term innovation rather than the grind of quarterly earnings reports by asking companies to limit executive bonuses that award short-term accomplishments. It would also require more disclosure to investors about meeting key milestones and plans, and reward long-term shareholders by giving them more voting power the longer they hold the stock.

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