Frequently asked questions

Market data & matching matches orders on a transparent order book and runs real-time surveillance. Clearing & risk nets matched trades and manages counterparty risk. Settlement records every settlement permanently - tamper-proof, timestamped, and independently verifiable. Each layer is separately governed so no single desk can alter the record.

In a regulated market, "trust us, our records say the trade settled" is not enough. California Stock Exchange keeps a tamper-proof, independently verifiable settlement record with segregated governance, so any participant can confirm a settlement happened at a specific time and has not been altered since - without relying on any single desk's word for it.

Every settlement produces a tamper-proof, timestamped record under regulatory oversight, with segregated governance and independent audits. No single desk - including any one at the exchange - can rewrite a settled record. Regulators and members can confirm any settlement themselves: what happened, when, and that nothing has changed since. The result is the certainty of instant, final settlement with a record anyone authorized can independently verify.

California Stock Exchange is built to be dramatically more affordable and more regulatory-efficient than legacy exchanges. Instant T+0 settlement and a single regulated venue strip out the cost, delay, and counterparty risk of multi-day cycles and fragmented infrastructure. That efficiency opens public capital markets to small-cap, high-growth companies that traditional exchanges have historically priced out - without sacrificing regulatory standing, surveillance, or investor protection.

Through standard order-entry and market-data protocols, plus REST and streaming APIs for digital-asset settlement. If your OMS or EMS speaks a common industry protocol, you can connect. Where bespoke integration is needed for a specific workflow, we scope that as part of onboarding.

Both. For digital assets, instant T+0 settlement is the default - each trade settles and is recorded the moment it executes. For equities cleared on conventional cycles, settled batches are recorded on the same infrastructure, with the same tamper-proof, independently verifiable record.

An organized securities market must either register as a national securities exchange under Exchange Act §6 (a "Form 1" application), or operate as an alternative trading system inside a registered broker-dealer under Regulation ATS. Our plan is ATS-first, exchange later - broker-dealer registration and Form ATS first, then a Form 1 as scale and regulatory engagement warrant.

On timing, we plan against the record rather than the statute. Exchange Act §19(a)(1) gives the SEC 90 days from publication of notice to grant registration or institute proceedings, but no recent applicant has cleared in 90 days. The two live precedents: Green Impact Exchange filed May 2024 and was granted April 2025 (~11 months); Dream Exchange filed February 2025 and was denied November 2025 (~9.5 months). Both consumed multiple amendments and at least one extension.

Sources: Exchange Act §19(a)(1); SEC Release No. 34-102842 (File No. 10-244, Apr 11, 2025); SEC Release No. 34-104558 (File No. 10-00248, Nov 25, 2025).

Because that denial was not about the business model. The SEC denied Dream Exchange on Exchange Act §6(b)(1) grounds - it could not find the applicant "is so organized and has the capacity" to carry out the purposes of the Act - citing a formal order of investigation and press reports raising questions about potential misuse of funds. The Commission expressly noted that "nothing precludes DreamEx from filing another Form 1 application ... in the future."

The correct lesson is that §6(b)(1) capacity is where a Form 1 dies, and it turns on the sponsor's own conduct, funding, and organization - not on whether serving smaller issuers is a permissible purpose. We take that as a direct instruction about governance and ring-fenced regulatory funding.

Source: SEC Release No. 34-104558 (File No. 10-00248), Nov 25, 2025.

Yes, and we say so plainly. Exchange Act §17A and Rule 17Ab2-1 require an entity to register as a clearing agency, or obtain an exemption, before performing clearing agency functions. A venue operating its own authoritative settlement record sits squarely in that analysis - T+0 atomic settlement does not avoid it.

There is a direct precedent: on May 27, 2026 the SEC granted Paxos Securities Settlement Company temporary clearing-agency registration under §17A to operate a central securities depository and settlement system on a private, permissioned distributed ledger, with temporary exemptive relief for a period not exceeding 18 months. The path exists - but it is temporary, conditioned, and granted case-by-case, not a general permission.

Sources: Exchange Act §17A; Rule 17Ab2-1; SEC order granting temporary registration to Paxos Securities Settlement Company, LLC, May 27, 2026.

SEC approval is granted conditioned on a defined checklist being satisfied first. The Green Impact Exchange order is the cleanest recent example - approval required the exchange to join the NMS plans (CT Plan, CTA, CQ, Nasdaq UTP, Rule 605, Limit Up-Limit Down, and the CAT NMS plan), join the Intermarket Surveillance Group, have a Minor Rule Violation Plan declared effective, put a Rule 17d-2 agreement in place or demonstrate independent ability to meet all regulatory obligations, join the multi-party 17d-2 surveillance plans, and finalize a Regulatory Services Agreement with a regulatory services provider.

The substantive ones are the last two: a new exchange either outsources regulation - FINRA is the usual provider - or proves it can regulate independently. Ongoing, an exchange is a Regulation SCI entity, collects and remits Section 31 fees, and pays CAT fees.

Sources: SEC Release No. 34-102842 (File No. 10-244), Apr 11, 2025; Regulation SCI; SEC Section 31 fee rate advisory, Apr 4, 2026.

It is an open question we are treating seriously rather than assuming away. California's Digital Financial Assets Law (AB 2269, as amended by AB 1934) requires a DFPI licence to conduct digital financial asset business activity with California residents. DFPI began accepting applications through NMLS on March 9, 2026 and required a complete application by July 1, 2026 to continue operating past that date - a deadline that has now passed. The licence carries a minimum $100,000 tangible net worth plus a surety bond or trust account.

Whether our tokenized-securities activity is covered by DFAL, or instead falls outside it as securities activity, is a question for counsel. DFPI's published guidance does not state an exemption for SEC-registered broker-dealers or national securities exchanges. Separately, California Corporations Code §25210 requires a DFPI certificate to effect securities transactions in the state absent an exemption.

Sources: Cal. Fin. Code div. 1.25 (DFAL); DFPI licensing guidance; Cal. Corp. Code §25210.

Surveillance runs continuously against the live order book, not as a periodic review. Patterns consistent with spoofing, layering, wash trading, or other abuse are flagged in real time and escalated to compliance. Because every execution and settlement is independently verifiable, regulators can reconstruct exactly what happened without relying on any single desk's account of it.

The matching and surveillance layer flags the breach in real time on the member dashboard, and the event is recorded in a tamper-proof, independently verifiable settlement record - that visibility is the point. Members that detect and correct quickly maintain standing with regulators. Concealing a breach is exactly the failure mode California Stock Exchange is designed to eliminate.

Listed issuers meet standard SEC periodic and current-reporting requirements; private and SMB issuers follow disclosure standards scaled to their market. The same verified trade and settlement record feeds whatever regulatory or investor report is required - what changes is which slice of the record is presented to which participant.

No. California is our beachhead, not our boundary. A national securities exchange registration is national in scope - NYSE and Nasdaq are not limited to New York, and we would not be limited to California. U.S. issuers in any state can list under the same charter, and foreign issuers can list under the same rulebook using the SEC's foreign private issuer framework, exactly as they do at other U.S. venues today. For context, U.S. venues account for roughly 49.1% of global equity market capitalization, and the NYSE alone lists 530+ international companies from 48 countries. We start in California because that is where the gap between capital formation and market infrastructure is widest: California is the world's fourth-largest economy and took roughly 60% of all U.S. venture capital in 2025.

Sources: SIFMA, 2025 Capital Markets Fact Book; NYSE International Listings; Office of Governor Gavin Newsom (Apr 2025, citing IMF and U.S. BEA); PitchBook-NVCA Venture Monitor Q4 2025.

Not yet. California Stock Exchange is pre-licensing and pre-revenue. There are no listed issuers, no admitted members, no live venue, and none of the regulatory registrations the business depends on - broker-dealer registration, Regulation ATS authorization, or national securities exchange registration. Everything described on this site is what we are building, not what we are running. We are funding the build through a Series A targeted to close by December 31, 2026, with operations planned to commence January 2027. The most recent comparable precedent is the Texas Stock Exchange, which received SEC approval of its Form 1 in September 2025 and opened for trading in July 2026; we are not affiliated with TXSE and its outcomes are not indicative of ours.

The CSE California 100 is the exchange's flagship benchmark index, tracking 100 leading California-listed companies across sectors. It gives investors a transparent, rules-based read on the California economy and serves as a reference for index products and market data on the venue.

California Stock Exchange runs a regulated venue for private-company shares, pre-IPO secondaries, and SMB equity - with structured trading windows, disclosure standards scaled to the issuer, and the same settlement and surveillance infrastructure as the public markets. Founders and early investors get access to liquidity that public markets historically reserved for the largest issuers.

Digital securities and a range of real-world assets, traded under a unified rulebook with instant T+0 settlement. Digital assets are only credible on a regulated venue with consistent custody, surveillance, and an independently verifiable settlement record - which is what California Stock Exchange is designed to provide beneath every instrument.

Increasingly, yes - and we will not claim otherwise. In 2026 the SEC approved both Nasdaq and NYSE to trade tokenized shares. Tokenization is no longer a differentiator at the top of the market.

The distinction is narrower and more technical than "we tokenize and they don't." Incumbent tokenized shares are fungible with the ordinary share and still settle T+1 through DTC - the token is a wrapper on the existing post-trade stack, not a change to how settlement works. Their approvals also cover a defined universe: Russell 1000 constituents and major-index ETFs. What we are building is atomic delivery-versus-payment at T+0 on our own settlement ledger, for issuers below that universe. That is a settlement-architecture difference, and it requires clearing-agency-level authorization we do not have today.

Sources: SEC Release No. 34-105047 (SR-NASDAQ-2025-072), Mar 18, 2026; SEC Release No. 34-105260 (SR-NYSE-2026-17), Apr 17, 2026.

Both are useful reference points, and neither is a straw man.

TXSE is the proof the path works. It raised $161M, filed a Form 1 in January 2025, was approved September 30, 2025, closed a second round taking total capital past $250M, and opened for trading in July 2026. It answers the two questions people ask about us first: can a new regional exchange get approved, and will serious capital fund one. It is also a well-capitalized competitor, and its success may make our task harder rather than easier. We are not affiliated with TXSE and its outcomes are not indicative of ours.

LTSE matters for the opposite reason: it is a California-founded national securities exchange, so we do not claim nobody is building for California. LTSE's experience is why we do not believe a cheaper listing fee alone wins - the defensible position is a California issuer franchise plus atomic settlement plus a continuum from private to public, not price.

Sources: TXSE Group Inc. press releases, Sep 30 and Oct 31, 2025; The Texas Tribune, Jul 3, 2026.

California Stock Exchange is custodian- and clearing-agnostic - the settlement record is structured to integrate with qualified custodians and clearing partners, and any settlement can be referenced and independently verified by any participant entitled to it. We align connectivity, reconciliation cadence, and settlement triggers with your partners during onboarding.

Onboarding is scoped around one market and one role - listing an issuer, or certifying a broker-dealer as a trading member. California Stock Exchange connects to your existing OMS/EMS and custody stack, stands up your member dashboard and a scoped read-only view for the relevant participant, and begins producing live, independently verifiable settlements. Most members are live end-to-end within a few weeks.

A point of contact on the trading or operations desk, connectivity to your OMS/EMS and custody stack, and clarity on which market and instruments you're going live with. California Stock Exchange handles matching, clearing, settlement, recordkeeping, and participant access - your team is not asked to deploy or maintain any settlement infrastructure.

Once you're live in one market, adding the others reuses the same connectivity and dashboards under one rulebook - the marginal cost and time per market drops sharply. Most members expand from a single market to full multi-market participation within a single quarter.

Counterparties and the public see the market data the rulebook publishes - quotes, executions, and prices - never your order book intentions or position-level detail. Regulators and custodians get a scoped, read-only view of exactly the settlements they are entitled to verify. The verifiable settlement record exposes only what each participant is authorized to see.

Real-time surveillance runs against the live order book and flags patterns consistent with spoofing, layering, or wash trading as they happen. Member identity is verified at onboarding, orders are attributed at source, and every execution is captured in a tamper-proof record. The system is designed so that any attempt to game the market shows up as a record, not as silence.

Every settlement is recorded in a secure, independently verifiable settlement record that is independently governed and segregated from any single trading desk. Even in a worst-case scenario where one part of the exchange failed, every historical settlement remains independently verifiable. Continuity of the record does not depend on continuity of any one desk.

By changing where compliance comes from, not by discounting fees - which any incumbent could match in a week. Our design intent is that issuer data is captured once and compliance artifacts are generated continuously: listing-eligibility monitoring, periodic reports, Section 16 filings, transfer-agent and cap-table records. The specific reason we think we can do this and an incumbent cannot: incumbent venues sit above DTC's street-name structure, where beneficial ownership is opaque even to the exchange. If the settlement ledger is the authoritative record of ownership, then float, insider holdings, short interest and fails-to-deliver become computed rather than self-reported.

Two honest caveats. Generating a filing is not the same as attesting to it - audit and officer certification stay with the issuer. And none of this is built; it is design intent for a venue that holds no regulatory authorizations today. We do not publish a percentage saving because we have no basis for one.

We want to be precise, because the honest answer has a hard legal boundary. An exchange may not support, defend, stabilize, or floor an issuer's price. Exchange Act Section 9(a)(2) prohibits transactions intended to raise or depress a price to induce trading, and Regulation M permits stabilization only by offering participants, during a distribution, at a price not exceeding the offering price, with disclosure. A venue doing otherwise would be running a manipulation scheme. We will never offer price support, and any venue that offers you price protection is describing something illegal.

What is legitimate is market design, and it is substantial: periodic call auctions for the thinnest names, which concentrate trading into discrete events and raise the cost of manipulation; designated liquidity providers with affirmative quoting obligations; volatility bands; and concentrating trading in thin names on the listing venue rather than fragmenting it across a dozen exchanges. Nasdaq implemented an auction model on First North for securities with average spreads above 7%; both Bats (2015) and Nasdaq (2017) asked the SEC to restrict illiquid names to their listing exchange. That last lever needs an exemption we cannot grant ourselves.

Sources: Exchange Act §9(a)(2), 15 U.S.C. §78i(a)(2); 17 C.F.R. §§242.100-105 (Regulation M); Reuters (Jan 2017); Nasdaq First North Growth Market.

It is best understood as a market-integrity feature rather than a speed feature. The average daily dollar value of U.S. fails-to-deliver is roughly $3 billion and has been essentially unchanged since 2005, despite Regulation SHO and two decades of enforcement. Settlement failure is the single most common grievance small-cap issuers raise. Atomic T+0 delivery-versus-payment addresses it structurally rather than by enforcement: delivery happens simultaneously with execution, so failing to deliver is near-impossible by construction.

To be clear about what this is not - it is not protection from short selling. Short sellers expose frauds, and a venue marketed as shielding issuers from scrutiny attracts exactly the issuers you would not want. We frame this strictly as settlement integrity.

Source: Petition for Rulemaking to amend Regulation SHO, SEC File No. 4-848 (Mar 12, 2025).

Largely, yes - and we think the reason matters. London's AIM launched in 1995 with deliberately lighter listing standards and has fallen from 1,694 companies at its 2007 peak to roughly 612-679 today. The decisive detail is the cost: AIM runs about £600,000 to list and £500,000 a year to maintain, after the lighter standards. A junior market that reduces standards without reducing the recurring cost of being public loses its companies, because private capital offers the same money with none of the disclosure burden.

Regulation A+ shows the mirror-image failure. Since 2015 it has raised roughly $9.4 billion across 800+ issuers - the fundraising worked - but only 2-4% of Tier 2 issuers ever reach a national exchange. It solved capital and never solved liquidity.

Our read: the answer is not a lighter public market. It is a graduated continuum on one venue - private and 144A, then Reg A+ or Reg CF, then an auction-traded growth tier, then a full listing - with the same ledger, transfer agent and surveillance throughout, so moving up a tier is a configuration change rather than a re-IPO.

Sources: Bloomberg (Feb 9, 2026); British Business Bank; AJ Bell; SEC DERA, Analysis of the Regulation A Market (2025).

One reason is structural and it is the one we lead with. Global private-markets assets grew from about $1 trillion in 2003 to about $18 trillion in 2024, while the number of U.S. public companies fell by roughly half from its 1996 peak. At the same time index concentration reached a point where about 40% of the S&P 500 sits in ten companies - roughly forty cents of every passive dollar - which structurally starved capital, analyst coverage and liquidity beneath the mega-cap tier. The Russell 2000 entered 2026 at its cheapest level relative to the Russell 1000 in twenty-five years.

The rest is a window, and windows close: the SEC's Spring 2026 agenda carries 38 rulemakings, most of them deregulatory; proposed reforms would extend scaled disclosure to ~81% of public companies; tokenized real-world assets went from $11.8B to $32.2B on-chain in twelve months; and retirement capital is beginning to open to private assets.

Sources: McKinsey Global Private Markets Report 2026; Forbes (Jun 2026); Franklin Templeton/Royce; Sidley Austin (Jul 2026); SEC Press Release 2026-46; rwa.xyz via Finextra.

Three things, and we would rather say them than have you find them. The 2026 IPO boom is not ours. U.S. IPOs raised roughly $251 billion through late July 2026 against $47.4 billion in all of 2025 - but across only 88 deals, down from 202, and a single offering was $75 billion of it. The window reopened for mega-caps, not for the companies we intend to serve. We cite it as evidence of bifurcation, not demand.

Almost none of the regulatory change is adopted. The Rule 611 rescission, the disclosure reforms, the Department of Labor rule - all proposals. Regulatory cycles reverse, and by the time a venue like ours could operate, the environment will differ from today's.

The AI mega-rounds are not our market. About 68% of U.S. venture dollars landed in the Bay Area last quarter, with AI taking roughly 81% of Bay Area startup capital - but companies raising at that scale have the least need of a public venue. Our issuer base is the long tail beneath them.

Sources: Renaissance Capital 2Q 2026; PitchBook H1 2026.