US Securities and Exchange Commission (SEC) chairman Jay Clayton says he’s looking at ways to open up the private market to mom-and-pop investors, allowing them the chance to get in on fast-growing companies like Uber Technologies and Airbnb.
Instead, he should be looking for a quicker way for companies to move from private to public markets, and back.
Last week, Mr Clayton, speaking at a conference for entrepreneurs in Nashville, outlined a proposal to make it easier for less-than-wealthy individuals to invest in private companies. Right now those investments are restricted to high-net-worth individuals. Mr Clayton said the SEC will take a few months to deliver a “lengthy” paper on the matter, but not long after that the games would begin. “I think you could move pretty quickly on this kind of thing,” media reported him as saying.
The proposal seems to mark an end to Mr Clayton’s silly war on private markets. Ever since becoming head of the SEC nearly a year and a half ago, Mr Clayton has repeatedly cited the shrinking number of public companies as a major problem. He has said the fact that Uber, Airbnb and other larger tech companies are staying private longer has robbed individual investors of the ability to get access to potentially high-return investments, as well as cut off a needed funding source for less well known companies that would like to go public. To remedy that, Mr Clayton has proposed loosening regulations, which he says are discouraging companies from going public, but have also limited fraud.
His new proposal is a recognition that the issue may not be that public markets are regulation-clogged and broken, but that private markets actually work quite well. The bad news is, Mr Clayton’s proposal could put an end to that.
Yes, the private market has allowed Uber, AirBnB and other so-called tech unicorns to flourish. But there have also been widespread instances of aggressive accounting, failed businesses, and outright fraud. That, in part, has caused the hype around the tech unicorns that rose in 2015 and 2016 to subside. But it’s done so without the calamitous economic impact that accompanied the bursting of the dot-com and housing bubbles.
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The private market’s ability to limit hype and investment is a feature, not a bug. If Mr Clayton opens the market up to all investors, that feature is likely to go away, and fraudsters looking to take advantage of limited disclosure requirements are sure to flood in.
But what about those small, legitimate businesses that can’t get access to venture capital, perhaps because they aren’t on the coasts? Is there a way to grease the wheels for them to gain access to funding?
If Mr Clayton is in the market for ideas, I have one of my own to sell - limited-life public companies, and I will throw in the trademark for free. The idea would be that smaller companies could go public as long as they promise to return a portion of the equity they have raised, say 10 per cent, each year.
Most small businesses don’t make very good public companies because they have a limited life span. My imagined structure solves that, being self-liquidating, with the companies using up their capital to buy back investors’ stakes until the company is either private again, or gone.
Like a common stock, the value of the investment vehicle would rise and fall based on the company’s ability to pay out more, or less, than expected. But the constant capital return should limit investor losses. Financial disclosure could be limited, and in return companies could be required to set up a pre-funded capital-return account, or prove to an auditor that the company has the ability to do that.
I’m not sure this financial structure would take off. I could see how some entrepreneurs would say its cost of capital might be too high, especially given the current level of interest rates.
But if the SEC is really looking to narrow the gap between public and private markets that Clayton thinks is holding back our economy, why not try something new? Giving individual investors the ability to lose their money in risky markets won’t cause funding resources or the economy to grow.
In fact, it will likely do the opposite.
TOURNAMENT INFO
Fixtures
Sunday January 5 - Oman v UAE
Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
Thursday January 9 - Oman v UAE
Saturday January 11 - UAE v Namibia
Sunday January 12 – Oman v Namibia
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Mohammed Usman, CP Rizwan, Waheed Ahmed, Zawar Farid, Darius D’Silva, Karthik Meiyappan, Jonathan Figy, Vriitya Aravind, Zahoor Khan, Junaid Siddique, Basil Hameed, Chirag Suri
Kill
Director: Nikhil Nagesh Bhat
Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal
Rating: 4.5/5
COMPANY PROFILE
Name: Kinetic 7
Started: 2018
Founder: Rick Parish
Based: Abu Dhabi, UAE
Industry: Clean cooking
Funding: $10 million
Investors: Self-funded
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Dengue fever symptoms
- High fever
- Intense pain behind your eyes
- Severe headache
- Muscle and joint pains
- Nausea
- Vomiting
- Swollen glands
- Rash
If symptoms occur, they usually last for two-seven days
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
Specs
Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)
The specs
Engine: Single front-axle electric motor
Power: 218hp
Torque: 330Nm
Transmission: Single-speed automatic
Max touring range: 402km (claimed)
Price: From Dh215,000 (estimate)
On sale: September
57 Seconds
Director: Rusty Cundieff
Stars: Josh Hutcherson, Morgan Freeman, Greg Germann, Lovie Simone
Rating: 2/5
A Round of Applause
Director: Berkun Oya
Starring: Aslihan Gürbüz, Fatih Artman, Cihat Suvarioglu
Rating: 4/5
Quick facts
- Storstockholms Lokaltrafik (SL) offers free guided tours of art in the metro and at the stations
- The tours are free of charge; all you need is a valid SL ticket, for which a single journey (valid for 75 minutes) costs 39 Swedish krone ($3.75)
- Travel cards for unlimited journeys are priced at 165 Swedish krone for 24 hours
- Avoid rush hour – between 9.30 am and 4.30 pm – to explore the artwork at leisure
Dubai Rugby Sevens
November 30, December 1-2
International Vets
Christina Noble Children’s Foundation fixtures
Thursday, November 30:
10.20am, Pitch 3, v 100 World Legends Project
1.20pm, Pitch 4, v Malta Marauders
Friday, December 1:
9am, Pitch 4, v SBA Pirates
RESULTS
6pm: Al Maktoum Challenge Round-2 – Group 1 (PA) $55,000 (Dirt) 1,900m
Winner: Rajeh, Antonio Fresu (jockey), Musabah Al Muhairi (trainer)
6.35pm: Oud Metha Stakes – Rated Conditions (TB) $60,000 (D) 1,200m
Winner: Get Back Goldie, William Buick, Doug O’Neill
7.10pm: Jumeirah Classic – Listed (TB) $150,000 (Turf) 1,600m
Winner: Sovereign Prince, James Doyle, Charlie Appleby
7.45pm: Firebreak Stakes – Group 3 (TB) $150,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer
8.20pm: Al Maktoum Challenge Round-2 – Group 2 (TB) $350,000 (D) 1,900m
Winner: Hot Rod Charlie, William Buick, Doug O’Neill
8.55pm: Al Bastakiya Trial – Conditions (TB) $60,000 (D) 1,900m
Winner: Withering, Adrie de Vries, Fawzi Nass
9.30pm: Balanchine – Group 2 (TB) $180,000 (T) 1,800m
Winner: Creative Flair, William Buick, Charlie Appleby
The pillars of the Dubai Metaverse Strategy
Encourage innovation in the metaverse field and boost economic contribution
Develop outstanding talents through education and training
Develop applications and the way they are used in Dubai's government institutions
Adopt, expand and promote secure platforms globally
Develop the infrastructure and regulations
Low turnout
Two months before the first round on April 10, the appetite of voters for the election is low.
Mathieu Gallard, account manager with Ipsos, which conducted the most recent poll, said current forecasts suggested only two-thirds were "very likely" to vote in the first round, compared with a 78 per cent turnout in the 2017 presidential elections.
"It depends on how interesting the campaign is on their main concerns," he told The National. "Just now, it's hard to say who, between Macron and the candidates of the right, would be most affected by a low turnout."
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900