Re: [BTC-TC] Virtual Community Exchange w/ Options, DRIP, 2FA, API, CSV, etc.
If you get the contracts right, the rest will take care of itself. If a contract does not indicate what financial detail will be reported and when, then it should not be approved in the first place. If a contract does indicate what will be reported, and the issuer does not deliver, then it should be suspended and if necessary delisted.
This.
I completely agree but you have to understand also, that at this moment in BTC world evolution, only the exchanges have the power to turn this ship in right direction.
I recall when I asked someone to describe their business in simple structure of a business model. You are right, it was epic fail by the issuer. He had no idea what he was really offering, why was he offering this and whom was actually hes client.
This is where we are at the moment. Yes, those are just tools to describe something. Idea is to have those descriptions organized (standardized, if you may) so it's easy to compare and evaluate. This also what fin. reports are for.
I still believe, exchanges like btct and bt can get this ball rolling and rest will follow.
The practical problem (ignoring another issue already explained by Greg - that exchanges shouldn't be doing an SEC-type role) is that there's no "one size fits all" solution for accounting.
Traditional accounts - of the type pasted earlier by yourself - are only really relevant for some types of businesses. Why, for example, should I provide them for things like pass-throughs? All that matters on those is that:
a) I hold enough of the underlying asset to back the shares I issue myself.
b) I pass on any/all received dividends (minus any fee detailed in the contract).
c) I meet any other commitments defined in the contract (such as any provisions regarding redemption or exchanging for underlying assets).
The actual cash-flow is entirely irrelevant and not the business of investors in any event.
What matters is what Greg already stated - that the contract contain a commitment to provide the appropriate level of detail for the nature of the security. And that they then provide it when operational or are delisted. There's two, MAYBE three, points at which the assessment of what an appropriate level of detail is:
1. By burnside when administratively unlocking the asset.
2. By moderators when voting to approve.
3. By every individual investor when choosing to invest.
I disagree with the apparent view that all responsibility is somehow shovelled onto #1. If #2 exists then #1 has no need to be particularly rigorous - because if burnside is personally meant to ensure quality then there's no justification for #2 to exist as a stage at all.
I don't have a moderator vote - though I do hold some shares in the BTC-TC passthrough to LTC-Global shares. Lack of any information about accounting is one of the reasons why I vote NO on a large number of its motions regarding securities - especially mining ones where there's no commitment to providing regular updated lists of assets.
EDIT: Don't read the above as meaning that I believe the current moderator system is good or working as it should. That is NOT my view. But all the time that's the system the responsibility for quality in listings HAS to primarily rest with moderators. And the responsibility for investiing wisely will ALWAYS lie with individual investors.