LTSE: The Long-Term Stock Exchange

Key Takeaways

• LTSE is a U.S. national securities exchange approved by the SEC in May 2019.
• Listed companies must adopt five SEC-approved principles focused on long-term value.
• Companies dual-list on LTSE while keeping a primary listing on NYSE or Nasdaq.
• LTSE differentiates on governance standards, not on trading speed or fees.

What It Is

LTSE is a registered national securities exchange. The company filed its application with the SEC in late 2018 and won approval in May 2019, becoming one of the newest U.S. exchanges. Its founder framed it as a remedy for short-term pressure on public companies.

What sets LTSE apart is not its order book but its listing standards. To list, a company must adopt formal policies built on five SEC-approved principles covering stakeholders, long-term strategy, executive pay, board oversight, and shareholder engagement. These are filed with and approved by the SEC, so they function as real listing requirements, not voluntary pledges.

The Intuition

Public companies often complain that quarterly earnings pressure pushes them toward short-term decisions. LTSE was designed as a counterweight. The idea is that an exchange can use its listing rules to nudge companies toward longer planning horizons and more durable governance.

The five principles ask a company to consider a broad set of stakeholders, measure success over years, tie executive pay to long-term performance, give the board explicit oversight of long-term strategy, and engage with long-term shareholders. None of these change how a share trades. They change what a company must commit to in order to carry the LTSE listing.

How LTSE Works

LTSE operates the same core trading machinery as any national securities exchange. Orders match under price-time priority, the venue honors the national best bid and offer, and execution mechanics resemble other exchanges. The distinctive layer sits on top, in the listing rules.

Standard exchange listing:  financial and disclosure thresholds
LTSE listing adds:          5 SEC-approved long-term principles,
                            adopted as formal company policies

In practice, most LTSE-listed companies use a dual-listing model. They keep their primary listing on an exchange such as NYSE or Nasdaq and add a secondary LTSE listing on top. The shares are the same security and trade across all venues; the LTSE listing signals that the company has adopted the long-term principles. Early dual-listers included Twilio, Asana, and ThredUp.

LTSE has also publicly discussed tenure voting, where longer-held shares can carry more votes, though such structures are debated and not a blanket requirement of listing.

Worked Example

Suppose a software company already trades on the NYSE and wants to signal a long-term focus to investors.

It applies to dual-list on LTSE. To qualify, it adopts written policies addressing the five principles: it documents how it weighs stakeholders, states that it measures success over multi-year horizons, structures executive pay to reward long-term results, gives its board explicit oversight of long-term strategy, and commits to engaging long-term shareholders.

Once listed, the company's shares continue trading primarily on the NYSE. The LTSE listing does not split liquidity into a separate pool or change the share price. It adds a governance label backed by SEC-approved standards, which the company can point to when communicating with long-horizon investors.

Common Mistakes

1. Thinking LTSE is a separate market for the stock. Dual-listed shares are the same security and trade across venues. The LTSE listing is a governance overlay, not a separate liquidity pool.

2. Assuming the principles are marketing fluff. The five principles are SEC-approved listing standards adopted as formal policies. They carry real listing obligations, not optional slogans.

3. Confusing LTSE with a trading-cost play. LTSE differentiates on long-term governance, not on rebates, latency, or order types. Comparing it on trading economics misses the point.

4. Believing it bans short-term trading. LTSE does not stop anyone from trading frequently. It targets corporate behavior and governance, not investor holding periods on the open market.

5. Overstating tenure voting. Tenure-based voting has been discussed and is controversial. Do not assume every LTSE-listed company uses it; treat it as a debated idea rather than a universal rule.

Frequently Asked Questions

What is LTSE in simple terms? LTSE is a U.S. stock exchange that requires the companies it lists to adopt long-term governance principles. It approaches the market by rewarding multi-year thinking rather than quarterly results.

How does LTSE affect investment decisions? For investors, an LTSE listing is a signal that a company has committed to SEC-approved long-term governance standards. The shares trade like any other, so the impact is informational rather than mechanical.

What is a real-world example of LTSE in action? Twilio and Asana were among the first companies to dual-list on LTSE while keeping their primary NYSE listings, using the LTSE standards to highlight a long-term focus to investors.

How can investors use LTSE effectively? Treat an LTSE listing as one input on governance, not a guarantee of returns. Read the company's adopted long-term policies to see how it actually applies the five principles.

How is LTSE different from a regular exchange listing? A regular listing requires financial and disclosure thresholds. LTSE adds five SEC-approved long-term principles that a company must adopt as formal policies, layering governance commitments on top of standard requirements.

Sources

1. LTSE. "Listing Standards." https://ltse.com/listings/listing-standards
2. LTSE. "Listings FAQs." https://ltse.com/listings/faq
3. U.S. Securities and Exchange Commission. "Order Granting LTSE Exchange Registration (Release No. 34-85828)." https://www.sec.gov/files/rules/other/2019/34-85828.pdf
4. Cooley PubCo. "LTSE Proposes Listing Standards to Support Long-Term Value Creation." https://cooleypubco.com/2019/08/01/ltse-proposes-listing-standards/

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.