Long-Term Stock Exchange

Long-Term Stock Exchange
Name	Long-Term Stock Exchange
Type	Private
Industry	Financial services
Founded	2015
Founder	Jason L. Klein
Headquarters	New York City, New York, United States
Key people	Jason L. Klein (CEO)
Products	Stock exchange services

Long-Term Stock Exchange is a United States-based securities exchange created to promote longer-term corporate governance and investor relations. Founded in 2015, it seeks to align capital markets incentives with sustained corporate performance by modifying listing rules and governance standards. The exchange competes within the U.S. national market system and interacts with multiple participants across the securities industry.

Overview

The exchange positions itself as an alternative to incumbents such as the New York Stock Exchange, the NASDAQ Stock Market, and the Chicago Stock Exchange, while operating under oversight from the Securities and Exchange Commission. It offers listing services to issuers from sectors like Technology, Biotechnology, Energy, and Manufacturing and markets to institutional investors including BlackRock, Vanguard Group, and State Street Corporation. The initiative draws conceptual lineage from organizations and movements such as B Corps, the Council of Institutional Investors, and initiatives like the Corporate Governance debates involving figures connected to Warren Buffett, Jamie Dimon, and Larry Fink.

History and development

The exchange was launched by a team led by Jason L. Klein following proposals circulated among participants in the Harvard Business School ecosystem and dialogues tied to Stanford Graduate School of Business alumni. Early advocacy referenced ideas from Benjamin Graham-influenced value investors and governance reforms debated after events like the 2008 financial crisis and legislative responses such as the Dodd–Frank Wall Street Reform and Consumer Protection Act. The application and approval process involved filings with the Securities and Exchange Commission and consultations with market intermediaries including Nasdaq, Inc., Intercontinental Exchange, and advisory firms like PwC and Deloitte. Key milestones included conditional approval, technology buildout collaborations with trading technology vendors, and the first listings that linked to venture capital backers from firms like Andreessen Horowitz and Union Square Ventures.

Governance and structure

Corporate governance for the exchange follows rules comparable to other national securities exchanges and references best practices from bodies such as the Council of Institutional Investors and the Financial Industry Regulatory Authority. Its board and advisory panels have included individuals with backgrounds at institutions like Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, The Carlyle Group, and academic appointments at Harvard University and Columbia University. Compliance frameworks align with standards from the Securities Exchange Act of 1934 and reporting regimes influenced by the Public Company Accounting Oversight Board and audit practices advocated by firms such as KPMG. The governance model emphasizes charter provisions and shareholder protections that echo reforms discussed in forums involving the Rockefeller Foundation and think tanks like the Brookings Institution and the Hoover Institution.

Listing standards and requirements

Listing criteria were designed to differentiate issuer behavior by requiring commitments reminiscent of covenants seen in private markets and venture capital term sheets held by firms like Sequoia Capital and Benchmark. Requirements include shareholder rights protections and disclosure practices influenced by precedents from Sarbanes–Oxley Act compliance and proxy access matters litigated in venues like the Delaware Court of Chancery. The exchange’s standards reference corporate governance norms promoted by Institutional Shareholder Services and proxy advisory activities involving Glass Lewis. Financial thresholds and corporate governance commitments echo practices used by issuers that listed on NYSE American and NASDAQ OMX.

Market operation and trading model

Operationally, the exchange integrates trading protocols and market data dissemination similar to systems used by BATS Global Markets, Direct Edge, and Cboe Global Markets. It interacts with brokers and dealers including Citadel Securities, Virtu Financial, and order routing firms such as ICAP and Eurex. Market structure elements—order books, tick sizes, and market maker obligations—are framed against industry standards set by the National Market System and regulatory directives from the SEC Division of Trading and Markets. Technology stacks draw on vendors associated with Nasdaq OMX Technology deployments and clearing links to entities like The Depository Trust Company and the Options Clearing Corporation.

Reception, criticisms, and impact

Reception among academics and practitioners has been mixed: supporters include scholars at University of Pennsylvania Wharton School, MIT Sloan School of Management, and London Business School who view longer-term incentives favorably, while critics from publications such as The Wall Street Journal, The New York Times, and commentary in forums like Bloomberg question enforceability and competitive advantage versus incumbents. Skeptics point to potential regulatory arbitrage, referencing debates seen in European Union capital market reforms and controversies involving exchanges such as IEX Group. Policy analysts from think tanks including American Enterprise Institute and Peterson Institute for International Economics have weighed in on systemic effects, liquidity implications, and investor choice.

Notable listings and milestones

Notable milestones include the exchange’s initial SEC approval, its first completed listings drawn from sectors tied to Software, Healthcare, and Green Energy, and several publicized corporate decisions to adopt charter commitments similar to those promoted by the exchange. Issuers and investor coalitions referencing the exchange include startups backed by Y Combinator, Accel Partners, and Founders Fund, as well as institutional dialogues with CalPERS and university endowments like Harvard Management Company. Other milestones involved outreach to state regulators such as the New York Department of Financial Services and participation in conferences hosted by organizations including SIFMA and SEC convenings.

Category:Stock exchanges in the United States