Business of Fintech

New stock exchange approved, Silicon Valley readies another

  • Recently-approved IEX aims to level playing field
  • A stock exchange for long term investors?
close

Email a Friend

New stock exchange approved, Silicon Valley readies another

After a lot of wrangling with the SEC, IEX was finally approved to become a full-fledged exchange. The startup, whose founder was made famous by his depiction in Flash Boys, hopes to even the playing field somewhat by instituting a 350-microsecond speed bump in the orders it’s routed.

Supporters of the upstart exchange welcome its fresh, democratic approach towards a market that’s essentially become a badly designed computer network: “It’s as if Comcast, Time Warner, and Charter were competing to send you Game of Thrones, every time you turned on your TV,” wrote Christopher Groskopf in Quartz.

Detractors say the approval of a new exchange just adds fragmentation to a market that already has 12 exchanges and dozens of private trading venues.

“By slowing down their outgoing market data, it becomes very difficult to determine who has the best price, and where to send that order to,” Larry Tabb, CEO of an influential market research firm, told The Verge.

Using the stock exchange to end short-termism

IEX isn’t the only new stock exchange — Silicon Valley isn’t done quite yet targeting exchanges. There’s a plan afoot (and real investors) to create the Long Term Stock Exchange (LTSE), an attempt to cure the incessant cycle of short term focus for both reporting companies and their investors. The move is being lead by Eric Ries, the author of Lean Startup, who believes it would also reinvigorate the IPO window for top startups currently choosing to stay private.

The startup is in early discussions with the SEC but the intention is that, in addition to general regulatory requirements, the body would also enforce a new set of incentives, including tenured shareholder voting power and tying executive pay to long-term business performance.

“You’re advertising to the markets that you’re willing to be held to a higher standard,” Ries told Bloomberg. “This is the gold standard, the most long-term, the most hardcore version of going public.”

0 comments on “New stock exchange approved, Silicon Valley readies another”

Business of Fintech

‘Every e-commerce platform will become a fintech’: Amazon aggregator Thrasio acquires capital-as-a-service startup Yardline

  • Yardline provides flexible growth capital to e-commerce businesses.
  • Thrasio's global reach will enable Yardline to broaden its scope and tap into new markets.
Ismail Umar | June 30, 2021
Business of Fintech, Member Exclusive

Visa expands its bank-tech matchmaking program to the U.S.

  • Visa Fintech Partner Connect recently expanded its offerings to the U.S.
  • FIs with a range of budgets can benefit from Visa’s Connect partners.
Shehzil Zahid | June 02, 2021
Business of Fintech, Member Exclusive

‘Stakeholder capitalism versus short-term shareholders’: Behind the Long Term Stock Exchange’s vision for better-principled companies

  • The Long Term Stock Exchange encourages companies to aim for long term financial gains.
  • The new stock market’s listing standards require companies to be held accountable for their commitments to stakeholders.
Rimal Farrukh | January 04, 2021
Business of Fintech, Member Exclusive

Inside Interactive Brokers’ embrace of ESG-friendly investing

  • People are calling for more transparency on environmental, social and governance issues in the investments they make.
  • Interactive Brokers has launched an ESG tool that provides portfolio scoring on important values.
Zachary Miller | December 17, 2020
Business of Fintech, Member Exclusive

How Intuit’s core mission enabled it to deploy $1 billion in PPP loans to its customers

  • When COVID-19 hit, Intuit marshalled massive resources to service its customers.
  • Within 11 days, it built a PPP app which ended up delivering over $1 billion in government assistance.
Zoe Murphy | August 13, 2020
More Articles