According to CNBC, the U.S. government recently approved the creation of a new Silicon Valley stock exchange.
Called the Long-Term Stock Exchange, the exchange was formulated by “the nation’s tech elite” who weren’t in favor of the market’s focus on near-term profit. The goal of this new exchange is to minimize short-term pressures and support innovations that are meant to boost companies in the long run, CNBC says.
One of the Long-Term Stock Exchange’s benefits could include scaling voting power “the longer an investor holds a stake in a company,” CNBC says. There’s a also a chance that companies on the exchange might have to follow certain rules, such as “a ban on tying executive pay to the company’s short-term financial performance.”
The exchange also has the Long-Term Investor Coalition, which is made of investors working towards building businesses that last for the long run; plus, the Long-Term Stock Exchange is building tools, including software, to help decision makers better manage these businesses, including table management, runway planning, hiring, and other things.
The new exchange was sparked from “regulatory criticism” from late 2018; it was filed with the Securities and Exchange Commission late last year, and was criticized for its structure. Specifically, Commissioner Robert Jackson Jr. told the Wall Street Journal “the structure of the exchange could grant founders and early investors in startups excessive power at the expense of other shareholders,” CNBC says.
“We welcome the approval, which advances our vision of a new way of being public for a generation of companies that aspire to build their businesses and generate value for decades to come,” Zoran Perkov, the top operations executive at the exchange, told CNBC.
The Long-Term Stock Exchange is expected to accept listing and start trading later this year.