On September 23, 2016 S.J. Quinney College of Law professor Jeff Schwartz authored a story for MoFoJumpstarter titled, “Venture Exchange Regulation: Listing Standards, Market Microstructure, and Investor Protection.”
This summer, the House Financial Services Committee passed the Main Street Growth Act, which calls for legislative changes to promote the formation of venture exchanges. The idea that securities exchanges specially designed for trading smaller and younger firms might be a useful addition to U.S. equity markets has been on people’s minds at the SEC and Congress since the SEC Advisory Committee on Small and Emerging Companies proposed it in March 2013.
Both the committee recommendation and the bill, however, are skeletal in nature. Neither do much to address the liquidity and investor-protection concerns that give some lawmakers and regulators pause. In a forthcoming essay, I set out a template for venture-exchange regulation that deals directly with these issues.