The article doesn't explains what makes LTSE different than NYSE? How will it actually encourage looking beyond the next quarter? Where can one learn about that?
The only concrete(ish) thing I could find was this quote:
> ...and reward long-term shareholders by giving them more voting power the longer they hold the stock.
I'm not sure how that would affect the behavior of traders in any particular stock. Seems like it would allow a "committed minority" of shareholders the ability to control the company, without having different classes of stock determined upfront?
If this exchange is mostly for value investing, as it sounds like, what barriers will LTSE set to prevent high frequency trading and other byproducts of access focused trading?
It's designed for long term investing. Not a place for day traders, high frequency trading and all sorts of sharks and piranhas that like to eat up pensions and 401k funds...
How exactly do you believe high-frequency traders "eat up" pension funds?
The only time any limit order gets executed is when it is the best price available. From the other perspective, the price a market order is matched at is the price of the best limit order available.
In the absence of high-frequency traders, the best price available will be worse, not better.
Example of how HFTs would "eat up" money, at least in the past: many instruments trade on multiple exchanges. So when a trader wants to execute what is conceptually a single large order, in practice this order may need to be split and routed to multiple exchanges.
HFTs will see the first order executing on one exchange, and will then jump in front of the rest on the other exchanges. For the trader it looks like large orders don't work; he can't buy every offer that's on his screen. Only part of his order works, and a price rise prevents the rest from executing.
Nowadays this may be less of a problem, because large traders now probably all use software that tunes injected latency to make all related orders arrive simultaneously at their different destinations. But I would still be careful about assuming that HFTs can't do any damage anymore.
The HFT can't just know that you're going to place a market order, and then jump in front of all of the other limit orders that you're going to match with, without offering a better price than the other limit orders.
The only way that could work is if the lowest price you can buy on exchange A is $100, and the HFT knows that you're about to submit a market order, so he buys up the $100 orders until the best price is $101, and then he lists what he bought for sale at $100.99, which your market order matches against. OK, in theory this works.
To avoid this, you can just submit a limit order at $100 instead of a market order. You should always use limit orders for exactly this reason, anyway: even in the absence of foul play, the order you're trying to match against might get matched by someone else in the mean time and you could get a worse price than you expect.
Pensions and 401k funds are not required to do any sort of short-run trading, and the asymptotic value of a security on each exchange will be the same. It won't meaningfully impact any sort of long run value of a pension fund or 401k (that is passively managed)
HFT get special trading codes they use to their advantage. They can see when a large order is being placed by an institutional investor and use it to their advantage to skim off a little bit.
Even if true, that's not an inherent property of HFT, that's just standard corruption: some traders get unfair access to private information about other traders' future plans.
Getting rid of HFT wouldn't get rid of that kind of corruption, and getting rid of that corruption wouldn't get rid of HFT.
Indeed there is very little. Just some mumble mouthing about "intentions."
""But unlike those exchanges, ultimately our intention is that when companies list shares on LTSE for sale to the public, they will adopt a set of governing practices that are designed to help them build lasting businesses and empower long term-focused shareholders.""
Utterly indistinguishable from the Wooden Language heard from every such grandee.
I am not one to indulge the sort of naivety that might allow me to pretend that powerful investors are going to tolerate any more impediments to their desires than legally required, or at least enforceable, so unless there are concrete differences imposed by SEC et al. I expect this is -- or eventually will be -- simply Wall Street West.
The article doesn't explains what makes LTSE different than NYSE? How will it actually encourage looking beyond the next quarter? Where can one learn about that?