March 19, 2018 / 7:34 PM / 5 months ago

Silicon Valley firm floats listings plan via 'Flash Boys' exchange

NEW YORK (Reuters) - Stock exchange operator IEX Group has asked U.S. regulators to approve a new corporate listings program that would hold listed companies to stricter standards of corporate governance designed to put long-term growth ahead of short-term profits.

IEX filed the request in the name of the Long Term Stock Exchange (LTSE), a Silicon Valley-based startup that plans to one day launch its own exchange. The LTSE listings rules concern things like executive compensation, disclosure, shareholder voting and board and stakeholder policies.

IEX, which was featured in author Michael Lewis's book, "Flash Boys: A Wall Street Revolt," filed rules last week with the U.S. Securities and Exchange Commission that would allow the LTSE to launch its new listings program on IEX's Investors' Exchange. (bit.ly/2u67kTg)

LTSE’s listings program would bind companies that sign on to stricter standards, Eric Ries, LTSE’s chief executive officer, said in an interview.

Ries, who wrote the book, “The Lean Startup,” and has advised hundreds of companies on growth plans, said the goal of the LTSE listing rules is to help companies focus on long-term growth, which is often overshadowed by a quarterly focus on profits. For example, more director compensation would stock-based tied to long periods, and shareholders who hold stock for longer periods of time would accrue more voting rights.

Companies that go public on LTSE “are not putting out a statement that says, ‘hey, kumbaya, we plan to do good things in the future, trust us,’ Ries said. “They are saying, ‘no, I’m committed to enacting these provisions.’”

That commitment may attract growth-oriented investors looking to put their money behind firms aligned with their values, he added.

The LTSE listings program is optional and separate from IEX’s own corporate listings program. Companies could be dually listed on another exchange, such as on Nasdaq Inc (NDAQ.O) or Intercontinental Exchange Inc’s (ICE.N) New York Stock Exchange, but they must abide by the stricter rules or LTSE could delist them.

Once its listings program is up and running, LTSE plans to apply to start its own stock exchange, Ries said.

LTSE and IEX, which was portrayed in Lewis’s “Flash Boys” as a market operator that levels the investment playing field by removing potential advantages for high-speed traders, have not disclosed financial terms behind the listings deal.

“We are excited to bring more choices to market for companies, and proud to ease the path for more innovation,” IEX CEO Brad Katsuyama said in a statement.

Reporting by John McCrank; Editing by David Gregorio

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below