LTSE Listings on IEX
We expect companies will be able to begin listing as early as this year using the new long-term focused listings standards developed by LTSE (subject to regulatory approval). These first listings would be through LTSE Listings on IEX ("LTSE Listings"), a new listings category featuring those innovative listing standards and hosted on the IEX listings platform. LTSE Listings aims to align all stakeholders around a common goal: long-term success for innovative companies that create real, enduring economic value and the investors who support them.
To see the details of the SEC regulatory filing proposing LTSE Listings standards click here.
LTSE is also working to create its own modern, SEC-regulated stock exchange designed to help build lasting businesses and empower long-term focused investors.
Interested in learning more about LTSE Listings? Email us.
Rule Change Filing FAQ
All information and characterizations of LTSE Listings on IEX ("LTSE Listings") are subject to SEC approval and effectiveness.
We believe that current public markets don't always serve the needs of today's modern companies. Despite a growing economy, and a growing number of total companies, U.S. public listings have fallen by roughly 50 percent between 1996 and 2016 (Credit Suisse). There are multiple reasons companies are choosing to stay private - such as access to an abundance of private capital and the rising cost of being a public company - but LTSE Listings believes one of the most significant is the overwhelming pressure many public companies feel to manage to the quarter, potentially at the expense of long-term growth.
- In a 2013 study, 80% of CFOs acknowledged that they would decrease spending on R&D, advertising and maintenance to meet an earnings target. (Study by Duke, NBER, and Univ of Washington)
- One study showed that, based on their particular experiment, going public was accompanied by a 40% decline in quality innovations (defined as patents heavily cited by future patents) for those firms in the five years immediately following listing. Meanwhile, the firms that considered an IPO but stayed private innovated at an accelerated rate. (Third Way)
We believe that it's a detriment to our economy when companies can't focus on the long-term. The McKinsey Global Institute found that companies that operate with a long-term mindset have in the aggregate outperformed their industry peers across almost every financial measure that matters since 2001. Additionally, companies that managed for the long term added nearly 12,000 more jobs on average than their peers from 2001 to 2015.
We are aiming to create a public company experience that makes it easier for companies to focus on their long-term vision.
LTSE Listings aims to reinvent the public company experience through innovative listing standards that are focused on novel approaches to disclosure practices, shareholder voting, executive compensation, and board and stakeholder policies.
How are LTSE Listings standards different than those on the existing exchanges?
LTSE Listings standards use IEX's existing listings standards (as detailed in the SEC filing), which are similar to those of NYSE and Nasdaq, as a baseline, and build in a set of innovative additions designed to empower and reward long-term focused companies and the investors who support them.
LTSE Listings standards are designed to promote the following goals:
- Long-term voting — Give true long-term holders a greater say in corporate governance
- Executive compensation — Reduce misaligned incentives around short-term goals
- Long-term disclosure — Focus the narrative on the long-term potential of the business
- Long-term focused board — Help prioritize long-term focused product and strategy discussions in the boardroom
- Long-term stakeholder policies — Make it easier for investors to recognize companies for addressing environment, community and diversity
LTSE Listings is a new listings option that provides a differentiated choice for companies and investors that prefer listing standards explicitly designed to promote long-term value creation. This listings category will use innovative listing standards developed by LTSE to provide issuers with a new public market experience, by incentivizing companies to make long-term choices with less short-term pressure and empowering long-term investors with more of a say in governance. LTSE Listings will be hosted on IEX. IEX has submitted a regulatory filing to the SEC to establish LTSE Listings, a new listings category on IEX.
At the same time, LTSE is continuing to build its own modern stock exchange and pursue additional regulatory approvals to become our own exchange.
Which types of companies do you expect to list on LTSE Listings?
LTSE Listings provides a new, innovative listings option for companies across industries and geographies and is designed for companies concerned with short-termism in the public markets. Any company that complies with the LTSE Listings standards, including the applicable existing IEX listings standards, is eligible to list. The LTSE Listings standards are designed to attract successful, visionary enterprises with strong values and a commitment to long-term success.
LTSE Listings will initially focus on IPOs of companies that are currently private. LTSE's goal is to eventually allow for transfers and dual listings of existing public companies when we become our own exchange.
What is the LTSE Long-Term Voting system?
LTSE believes that long-term shareholders should have a greater role in a company's corporate governance than short-term shareholders. Companies listed on LTSE Listings will provide all shareholders with the ability, at the shareholders' option, to accrue additional voting power over time – up to 10x over 10 years, accruing on a monthly basis.
What will listed companies be required to disclose as part of LTSE Listings?
LTSE Listings strives to shift investors' focus from evaluating companies' progress from quarterly results to long-term growth strategy and progress, and to give investors additional relevant information for evaluating long-term success. In addition to standard disclosures already required by the SEC and other exchanges, new company disclosures will include:
- Information about the company's annual Long-Term Growth Strategy and leading indicators of future growth, as well as progress in meeting key milestones (with certain competitive exceptions) designed to provide long-term focused metrics for evaluating success.
- New disclosures about buybacks, investments in human capital, and R&D, designed to provide focused transparency for investors and enable them to better identify companies that are making long-term choices.
- Policies on the company's impact on the environment and community, and the company's approach to diversity, designed to give investors' insight into a company's approach to these critical long-term issues
Will LTSE Listings companies operate under GAAP accounting?
Yes, companies listed on LTSE Listings are still required to comply with all GAAP requirements.
Can companies dual list on another exchange along with listing on LTSE Listings on IEX?
Yes, companies have the option to list only on LTSE Listings on IEX, or to dual list on LTSE Listings on IEX and another U.S. exchange.
Will LTSE Listings companies be allowed to make share repurchases - aka "buybacks"?
Yes. LTSE Listings companies will be subject to enhanced disclosures regarding buybacks. We want to enable investors to have greater transparency around a company's buyback initiatives and earnings per share (EPS) net of buybacks.
Pending SEC approval, we expect companies will be able to start listing this year on LTSE Listings. Interested in learning more? Email email@example.com..