Last time I read up on LTSE I noticed that the exchange doesn’t operate differently than a traditional stock exchange. Instead the companies in LTSE adopt specific language in their bylaws that orients them toward the long-term. Is this a correct understanding?
If you aren’t implementing any exchange-level mechanisms, why does this need to be an exchange at all? Why not just create a template for corporate bylaws that you can certify, like a B-Corp? An LT-Corp, if you will.
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.
Yeah I came back today hoping this was going to be answered. I like the vision and concept of LTSE, but have yet to be convinced there are any substantial mechanisms in place that make this any different than the other exchanges.
It's probably strictly worse than other exchanges if we're considering what the point of an exchange actually is. I've tried optimistically viewing LTSE from multiple angles but an exchange just seems like the fundamentally incorrect business model for their supposed goals.
How would you make money of templates? With this model, you can profit on the value of every trade. I assume the exchange makes more when people invest more.
An exchange usually makes more when people trade more ("we're in the moving business, not the storage business") and stocks are more volatile, so from one angle it would seem like the very worst place possible to try to encourage long-termism.
You could pay for the template-producing company to monitor the template-using ones, like an auditing company or any sort of certificate-issuing one.
It seems the companies on LTSE are not bound to be traded only there so it doesn't seem like the trading would mostly go through it, since it's bound to have less liquidity than traditional exchanges.
If you aren’t implementing any exchange-level mechanisms, why does this need to be an exchange at all? Why not just create a template for corporate bylaws that you can certify, like a B-Corp? An LT-Corp, if you will.