How do you start a local stock exchange?

Question

I recently moved back to my home town and found it in a state of disrepair. The local economy is embarassingly weak and the newly relocated gangbangers are going to turn the whole town into a crackhouse if my fellow hometowners don't get off the couch and give each other something constructive and profitable to do.

My fix involves establishing a local stock exchange and including the stock of local businesses in thoughtfully arranged compensation packages for local workers. This should allow the locals to foster some concern about the lawlessness that's been errupting.

With a 'rational self-interest' involved in our lives, we'll definitely be more prone to do the little things that equal substantial improvements. Tens of thousands of people in this suburb...

...hrmmm sounds kinda like Iraq... the locals aren't getting work - you know? If they all had jobs and stock in HAL and KBR, they wouldn't cause as much trouble. They might even become more pro-active.

No, I don't have a series 7 NASD or even a 65 yet (working on that). I'm looking for all the criticisms, such as "you need a series 7.4 NASD, an MBA in finance, a private placement, and $5M in legal fees." - You know, the kind of stuff that makes it sound impossible - all the barriers to entry.

I'd start with 15 small businesses who want to bone up and incorporate and include each others' stock in their employees' min wage compensation... something like that... big or small really shouldn't matter ... if we're up to it... no fixing your own town and not telling me how to do it - I call.

Please, no clowns with "call the SEC." I need to know what issues to bring up when I do call someone, not "ask someone else."

Please, if you think it's a waste of time to gather info on this - don't answer. Go discourage someone else. That's a poor attitude.

I'm not looking to start a conversation about how to motivate losers, either.

ONE - yes, that's what I'm talking about. SBIC. I'll definitely investigate that. Wiki first, and that will definitely be something that my professors and local people will have comments on.

Someone said something about incorporating a local credit union into the equation. Another person said that publicly traded doesn't necessarily mean that it's traded on the NYSE - just that you can publicly advertise the equity and sell it to the public through SOME advertising and sales vehicle other than word of mouth. Anyone have comments on that?

Answer 1

I applaud your effort to come up with a creative solution, but am not sure that a 'stock exchange' would be the best solution for several reasons...
-> stock exchanges are highly regulated and require massive amounts of capital
-> exchanges deal in publicly traded stocks, which tend to be larger corporations which would not necessarily have programs targeted to the area you are interested in helping
-> orienting toward smaller, locally owned businesses would generate more local re-investment

... however a SBIC (small business investment corp) or other vehicles that encourage smaller scale investment and incubation of small owner-operated businesses might be a better starting point. Working with the SBA (Small Business Administration) or similar organizations might be one approach. HUD grants or other state programs also sometimes provide funding for revitalization.

Best of luck with your venture.

Answer 2

The local Homeowners don't want to get off their couch now, what makes you think that buying stock in anything is going to help? If I'm not mistaken anyone can already buy and sell stocks to make a profit. Why aren't they doing it already?

Answer 3

Contact the The Securities Exchange Commission, as they control and license that activity.