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.
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.
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.
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.
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.
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:
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.
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.
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.
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:
Yes, companies listed on LTSE Listings are still required to comply with all GAAP requirements.
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.
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 firstname.lastname@example.org.