The SEC supported the validity of LTSEs Voting Rights Policy [0]. Eric Reis has clarified time-phase voting won't be mandatory [1], however the LTSE is facilitating technological / legal support for the implementation of such voting structures without directly endorsing them (presumably for legal reasons) [2].
>Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed securities bought on LTSE (which apparently is the only thing possible to do so far(.
Their rulebook disallows unfair dilution of other classes of shares.
>the Council of Institutional Investors (“CII”) advised that it could not support LTSE’s Form 1 application for two reasons. First, CII stated that the corporate governance requirements in LTSE’s Form 1 application (specifically, its “Voting Rights Policy”176) would “permit newly public companies to have multi-class structures with unequal
voting rights in conflict with [CII’s] membership approved policies supporting a one share, one vote structure” with “no sunsets on such structures.”177 Second, CII stated that LTSE’s Form 1 application “does not include any information about LTSE’s reported plans to update its application to include time-phased voting rights as a core element of its proposed corporate governance listing standards.”178 In addition, CII set forth its concerns about time-phased voting rights, including disproportionate empowerment of long-term stakeholders and challenges in tracking ownership of those with super-voting rights.
>The issues raised in the CII Letter do not provide a basis for the Commission to reject LTSE’s Form 1 application. Commission rules do not mandate that the rules of a national securities exchange must provide for a “one share, one vote” requirement for listed issuers.
> No. The exchange’s rules do not take a position on enhanced voting rights for shareholders. Our software affiliate, LTSE Services, has designed a tool to facilitate enhanced voting, should a company choose on its own to implement that.
From the linked article and FAQ, it sounds like this was once meant to be a differentiator, but the Voting Rights Policy mentioned in that SEC document is no longer a rule of the exchange, and tenured voting rights are not a listing requirement. Also not clear if other exchanges would disallow such voting rights.
Besides the complications this would raise that you mentioned, I also wonder how companies would even track tenure of ownership, since many (most?) shares of stock are not directly held and so the company may not even know who the nominal shareholder is or when transfers take place.
>Also, would this apply only to securities actually listed on LTSE or also, somehow, to non-LTSE listed securities bought on LTSE (which apparently is the only thing possible to do so far(.
Their rulebook disallows unfair dilution of other classes of shares.
[0] https://www.sec.gov/rules/other/2019/34-85828.pdf
>the Council of Institutional Investors (“CII”) advised that it could not support LTSE’s Form 1 application for two reasons. First, CII stated that the corporate governance requirements in LTSE’s Form 1 application (specifically, its “Voting Rights Policy”176) would “permit newly public companies to have multi-class structures with unequal voting rights in conflict with [CII’s] membership approved policies supporting a one share, one vote structure” with “no sunsets on such structures.”177 Second, CII stated that LTSE’s Form 1 application “does not include any information about LTSE’s reported plans to update its application to include time-phased voting rights as a core element of its proposed corporate governance listing standards.”178 In addition, CII set forth its concerns about time-phased voting rights, including disproportionate empowerment of long-term stakeholders and challenges in tracking ownership of those with super-voting rights.
>The issues raised in the CII Letter do not provide a basis for the Commission to reject LTSE’s Form 1 application. Commission rules do not mandate that the rules of a national securities exchange must provide for a “one share, one vote” requirement for listed issuers.
[1] https://qz.com/1901336/eric-ries-long-term-stock-exchange-ai...
[2] https://ltse.com/faq/
> No. The exchange’s rules do not take a position on enhanced voting rights for shareholders. Our software affiliate, LTSE Services, has designed a tool to facilitate enhanced voting, should a company choose on its own to implement that.