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Forums > SL CapEx Public Forum > Topic: A strawman proposal for the future of SLCAPEX

Jan 11th 2008, 13:52
Arnaud Villota 		A strawman proposal for the future of SLCAPEX
After trolling the forums the last few days, and throwing in my two cents worth every now and then, I would like to propose a fairly simple solution based on some things that have been floating around in my head and the ideas that I have seen on various forums. I think the goal to any proposal is to keep our exchange operating long term with minimal intrusion from regulatory bodies or Linden Lab. This proposal is based on the following assumptions/thoughts:

1) Stock trading in SL is a game. That is all that it was ever intended to be. We may make a little money or lose a little money, but at the end of the day, we are playing a game that we enjoy.
2) In order to adhere to Linden Labs “bank” policy, SLCAPEX, as an exchange, cannot endorse, promise, hint, advertise, or participate in, the distribution of interest, dividends, or other "returns on investment" on behalf of itself or others. Also it cannot “invest” or offer "investments" or otherwise use any money it receives from players either for its own profit or the players.
3) The exchange should be, in its purest form, a platform for buying and selling fictional shares in SL companies. The exchange can collect a fee for providing this platform. Currently the fee is a commission on every trade.
4) The exchange at its discretion can enforce rules of conduct for companies and trading players, enforce some standard of reporting that companies must adhere to, etc.
5) Players must be able to deposit and withdraw Lindens into and out of the game freely and unobstructed and without waiting. Players will not receive any return from the exchange on any money deposited. Players in effect pay each other by the buying and selling of shares. The only money that the exchange has on hand is the money from the commissions. All other monies are in the players own personal accounts, provided by the exchange for convenience.
a. Actually we all know that the money is in the exchange’s avatar, however what makes it different from a bank, is that all money paid into the avatar, stays in the avatar. It cannot be pulled out for any other purpose. In other words, No Float! So if Linden suddenly finds this offensive, we would all be able to draw our money out the same day if necessary.
b. To make this completely transparent, the exchange should also show the current balance of the exchange (less commission/fees)
6) Dividends are paid at a company’s discretion, not the exchange. Dividends, if paid, will be paid directly to the Players avatar, not to their account. Also, the CEO’s need to do the distribution, not the exchange. The exchange should have no part in dividend distribution, lest it be misconstrued. When the player buys shares in any particular company there must be an understanding that dividends are not promised, nor required. However it is in the CEO's best interest to reward the players with a share in the profits, since they would not exist without the players.

So based on these thoughts I am proposing the following 3 steps to move the exchange along to accomplishing the goal of independence:

On or before Jan 22, 2008 (the sooner the better)

1) Modify the web page and TOS for SLCAPEX and delete all references to interest, returns, dividends, long term growth, etc. Any concept related to investments, securities, or return on same should also be stricken.
2) A new exchange avatar needs to be created for the exchange only. The associated ATM’s for the avatar would be used to deposit or withdraw money to be used solely for trading. All the investors who want to continue trading on SLCAPEX would need to visit the ATM to open a new account. Then if they wanted to transfer money from the bank to the exchange, they could open a support ticket on SLCAPEX requesting the transfer. This should help alleviate the reserve requirement for the bank, since I think a lot of people would be willing to stay in the game if they knew for sure the exchange could meet or exceed Linden's latest requirements.
3) If Unoti would be willing, he could modify his dividend distribution scripts to pay directly to an avatar rather than an account. This script could then be sold to each CEO as a tool for distribution of income. Otherwise the CEO’s would need to do this (or pay someone to do it) manually.

So that’s it. I just offer this as a possible way of preserving the game of stock trading in SL. I am not a lawyer, but after reading the new Linden policy for the umpteenth time, I don't see anything in this proposal that would violate any of their new restrictions. I think as long as we don't lose sight that we are in SL and have been enjoying a good game of trading, and not try to incorporate or burden ourselves with RL regulations and corporations, etc. I think we can pull through this.

The only downside to this proposal is “What happens to SLCAPEX stock?” I do not have a good answer to that. I am heavily invested in SLCAPEX and I was looking forward to dividends finally, but unless someone can come up with a loophole, I don’t think SLCAPEX can be a pure exchange and pay dividends at the same time. It kind of violates the new Linden rules as I understand them. One thought would be that SLCAPEX could charge 1% more than they are charging now for commissions and use that 1% to begin buying back stock. The stock should be halted by Jan 22 (or sooner) though, in order to be in conformance of the new policies.

I am sure that there are many details that I am overlooking, but I hope that doesn’t deter discussion and expansion of this initial idea.

Thanks for sticking with this long winded post to the end.
And thanks to others who have posted on the other forums who I hope see part of their ideas in this post.
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Jan 11th 2008, 14:35
Bogart Beck 		Re: A strawman proposal for the future of SLCAPEX

Arnaud,

Your suggestions are relatively close to my research thus far as to what may or may not be permissable under the new rules LL has mandated.

I am still awaiting clarification on two fundamental pieces to the puzzle, primarily related to in-world transfer of Lindens between a gateway of some sort (nee ATM) and an Avatar, and also some very clear direction regarding the LL statement "direct return on investment" which I'm sure you've read and also questioned (aren't we all).

The other critical element is essentially the position I have ALWAYS taken (and spoken about at length - often with barbs and mud slung back at me for saying so) is that of SL CapEx being a Skill Game only. We'll need some very clear unambiguous language and a modified EULA to defend that threshold if we're to maintain a viabkle goodwill relationship with both Linden Labs, the game players and the US regulatory bodies.

THAT's what I'm working on while Arb focuses on liquidating the JTF Investments and returning deposits to its constituency. We still have MUCH work to do between now and the 21st!

Bo
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Jan 11th 2008, 15:22
Arnaud Villota 		Re: A strawman proposal for the future of SLCAPEX
Bo, thanks for the reply and thanks for posting as a System Announcement. I never expected that!

In regards to the "direct return on investment" that is why I unhappily had to state that SLCAPEX stock be halted and no dividends paid. I believe, if I am interpreting things correctly, that as long as the exchange pays nothing to the "players" then the exchange would be in conformance with the new policy.

I hated to say what I had to about SLCAPEX because I have a rather large stake, but you, Sando, Arb, and others have an even larger stake. That is why I put forward a suggestion of a buyback based on an extra 1% of the commission. As long as you halt trading of the stock before the 22nd you shouldn't be in violation of LL's policy.

As for the buy back, I think the only fair thing, is that the original IPO holders be bought out at the original IPO price (.50/share I believe). As for the rest of us "interlopers", what we paid would be fair I think. I know that this will be a lot of work, but maybe Unoti can program it for you. If not, I will do it for you at no charge, provided I can use my own tools in RL. I am not a scripter at Unoti's level and probably will never be. But I am an expert Java programmer as well as other languages, so it wouldn't be to bad for me. Point me to an Oracle or MySQL, or (yuck!) MS SQL server and I can go to town!

Anyway, anything I can do to help, let me know.

Thanks.
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Jan 12th 2008, 16:50
SynCere Talon 		Re: A strawman proposal for the future of SLCAPEX
ok i know i am a minor investor and do not possess the financial knowledge that many of you have dislayed. Would it be fair to say that since SL has an exchange of their own with the participants being able to purchase and sell Lindens either at a market rate or at a chosen rate, impose fees on those transactions and basically encourage day trading, that is what is good for the goose is good for the gander. Changing SLcap over to conforming to basically Lindens own system would prevent them from further policing the exchange without also policing themselves. Unfortunately smaller traders like myself who became involved with SLcap before the ruling came down will not have any of the advantages of the larger "investors" or traders. Which brings me to a question that no one seems to be able to clarify for me so far. The dictionary defines investmensts as "the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value". Ok, it is the appreciation of value part that perplexes me. Wouldn't the purchasing and selling of Lindens on the SL Exchange fall with in this parameter? In RL the selling and purchasing of currency is a banking function and used by many companies, they purchase foreign currency when it is deflated and sell it when it is inflated. This is an everyday activity not performed in secret or within only the private sectors but internationally on the exchanges, oh hell Lindens must be doing this themselves too. What about the financing of land purchases? Isnt the receiving of interest under the same ruling as the paying of interest? I am starting to wonder a) how much research Linden's put into this before they made this ruling OR b) how much they are not telling us is down the road based on these rulings with the fear of what it will do to their financial standing. Do they really expect people to come to SL and spend money that only the Lindens will benefit from? Heading in this direction you can bet this would have a major impact on whether people will even want to have a premium account or not. just my 2 cents (USD)

Thanks
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