The Wall Street Journal reported exclusively on plans by the London Stock Exchange to create a special market for the shares of private companies for limited public trading. The plan itself is not yet public, so the Journal was only able to report on limited aspects of what is contemplated. In the same way that U.S. private companies have increasingly been able to access public-like markets with new exemptions like Regulation CF, Rule 506(c) and Regulation A+ and the development of secondary trading markets for large private companies, this is an effort across the pond to provide some of the benefits of public market access to small and fast-growing companies.

One unusual aspect of the proposal, at least as compared to what’s been done in the U.S., is the plan to have only limited trading windows during which these companies’ shares can be available for trading. (In the U.S., public company insiders are subject to trading windows from time to time to protect against insider trading, but what the LSE is apparently proposing relates to all trading in the stock, not just by insiders.) The article suggests that the windows would be from one to five days once every month, quarter or six-month period. As the LSE hasn’t yet formally made any rule proposals, we don’t have the benefit of their thinking on the reasons for such a limitation, but I can think of a few:

• The shares of smaller companies are usually thinly traded, leading to wide bid-ask spreads, so by artificially limiting time available for trading, there will be a more liquid market when trading does occur.
• Being a public company means constantly having to think about public disclosure. In the U.S., various important events trigger a requirement to file a Form 8-K within a few business days, as opposed to being able to wait until the next quarterly filing. For the new LSE market, however, the companies will presumably need to focus on public disclosure only in the lead-up to each new trading window, so the small company isn’t forced to have a staff constantly focused on disclosure matters.
• Limiting the ability to sell will condition investors to think of these shares as a long-term investment, as opposed to something you hold for a week or less to make a quick profit.

It will be interesting to read about the LSE’s thinking if it moves forward with this. The notion of limiting trading windows is an interesting thought, which U.S. regulators may want to consider even with already-public companies that are thinly traded.

I can’t claim to have invented remote work, but I can say that I was doing it well before the majority of the workforce was forced into it in early 2020. My firm’s address, since its formation in 2010, has been at 565 Fifth Avenue in midtown Manhattan. For the first several years, I took the Long Island Railroad in every day and worked in my office, like any other lawyer. As the firm evolved, I built a network of freelance attorneys that worked for the firm. Especially given that the first two of them resided in Spain and Alabama, respectively, I was never going to need to provide extra space for the attorneys; accordingly, they worked from wherever they wanted.

After a few years of this, it occurred to me that without any opportunity for literal face-time with my co-workers, it was kind of silly for me to endure the commute on days where I had no meetings with clients or others. So, I set up shop in a spare bedroom at home in Port Washington, LI, and went into the city only when there were meetings. Aside from the occasional unwanted noise during conference calls from dogs or teenagers, it’s worked quite well.

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Thoughts on Remote Work from a (Relative) PioneerRead More »

I have found over my 23 years of law practice that, assuming I’ve consumed my usual copious amount of coffee, I can be quite productive and efficient when I get into a flow. When that flow is interrupted – by a phone call, someone popping into my office for a quick question, a car alarm going off, etc. – it can be difficult to get back into the groove. The good news is that a number of workplace trends in recent years have resulted in a general decline in interruptions, leading to more efficient work.

At least for me, the key development has been the advent of email. Everyone likes to complain about email – not me! As long as you don’t set your email system to notify you of every incoming email, which for me would be crazy-making, you are in control of when you look at it. Unlike someone making a phone call, the sender of an email is not expecting a literally immediate response. Of course, law is a service business and clients have reasonable expectations of a prompt reply, but the checking of the email can wait until you’ve finished reviewing that convoluted contractual provision.

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The Golden Age of Non-InterruptionRead More »