Silicon Valley meets ‘Flash Boys’ on new corporate listings program

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NEW YORK (Reuters) – A new would-be stock exchange based in Silicon Valley is teaming up with IEX Group, the newest U.S. stock exchange and focus of author Michael Lewis’s book, “Flash Boys: A Wall Street Revolt,” on a corporate listings program, the company said on Thursday.

The Long Term Stock Exchange’s (LTSE) listings program will consist of initial public offerings on IEX, pending regulatory approval of its listings standards, which have not yet been filed, Michelle Greene, the company’s chief policy officer, said in an interview.

LTSE, started by entrepreneur Eric Ries, did not say when its listings program would start on IEX and declined to comment on the financial terms of the deal.

IEX launched as the 13th U.S. stock exchange in August 2016, but was thrust into the spotlight in 2014 with Lewis’s controversial “Flash Boys.”

The book focused on IEX’s founders as they set out to build a more investor-focused market, which included a “speed bump” that slows down stock orders in an attempt to level the playing field for fast and slow traders alike. Many high-frequency traders said the book demonized their industry.

IEX now has a market share of around 2.5 percent and it recently received approvals for its own listing standards, which are similar to those of more established rivals Nasdaq Inc and the Intercontinental Exchange Inc-owned New York Stock Exchange.

The IEX listings program is set to start in early 2018. Unlike the LTSE plan, IEX listings will initially consist of companies that move over from Nasdaq or NYSE, rather than new companies doing initial public offerings.

“LTSE listings on IEX” will promote long-term thinking by companies and their shareholders through stricter standards around executive compensation, disclosure, shareholder voting and board and stakeholder policies, Greene said.

She would not give any more details on the program because it still has to be filed with the U.S. Securities and Exchange Commission.

The arrangement will allow the LTSE to begin listing companies using standards that include more disclosure and governance than existing listings standards, even before the LTSE becomes an exchange itself, Greene said.

The LTSE has not yet applied to become an exchange with the SEC, but is in discussions with the regulator, she said.