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ComCap The Podcast

Apr 12, 2017

Local Stock Exchanges with John Katovich and Amy Pearl


Are local stock exchanges the answer to the local investing question? Learn why the answer is likely no.

John Katovich of Cutting Edge Capital takes us on a journey starting from high hopes around local stock exchanges to the hard truth about the challenges – understanding this topic is central to finding the right answers to the question of local investing liquidity.  

In this episode you’ll learn:

  • Why a local stock market is probably not the answer to the local investing liquidity question
  • Why regulations around investor protections have to be taken into account.
  • Why our current stock market is not the same as it was in 1940. (In 1940 investors held stocks held stocks for an average of 7 years, by 2007 that was down to 7 months)
  • How high frequency trading is transforming the stock market, shifting transaction time to as low as 11 seconds
  • Why an exchange would not work economically if it needed to make money or be self-sustaining.
  • What a “market maker” is.
  • Why some oversight is critical, how to verify companies, and select which companies should be listed.
  • Whether a general “bulletin board” would work.
  • What is “speculation” and “arbitrage”.
  • The difference between an ATS and an exchange.
  • How nonprofits could participate in the sale of securities. A non-profit could operate at ATS, as long as it operates under a charter that allows it to regulate the market of the postings (buy/sell) and assumes the responsibility of broker dealer.


Amy Pearl, Hatch Innovation


John Katovich, Founder and Principal, Cutting Edge Capital


Cutting Edge Capital

What is an Alternative Trading System (ATS)?

SEC Announcement of adoption of new ATS Rules from 2000

Article: “Shining a Light on Dark Pools”