Notice of fee change on GLBSE

[RandomQ]

I don't know. What do you suggest, we can't have contracts being changed willy nilly.

Well in my cases I need majority shareholder or higher approval to change the contract, so its not willy nilly.

But I could change the contract at any time, as long as i got voter approval with no cost.

This appears to me as a shack-down of Asset Owners, because if we don't pay 5 BTC to change our contracts to address all area your default contract will address them.(possibly without shareholder approval)

As an asset owner I consider a default contract to be Interference and a direct violation of the contract I made with my Shareholders.

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[stochastic]

I don't know. What do you suggest, we can't have contracts being changed willy nilly.

Well in my cases I need majority shareholder or higher approval to change the contract, so its not willy nilly.

But I could change the contract at any time, as long as i got voter approval with no cost.

This appears to me as a shack-down of Asset Owners, because if we don't pay 5 BTC to change our contracts to address all area your default contract will address them.(possibly without shareholder approval)

As an asset owner I consider a default contract to be Interference and a direct violation of the contract I made with my Shareholders.

Asset issuers have a contract with GLBSE as well.  That is the terms the asset issuer had when they created the asset.  GLBSE should make it so any new assets that need to be changed will require a 5 btc fee.  Any created before the fee change should have the same rate that was done before 0 btc.  There did not seem to be any restrictions previously on changing the contract as long as it was per the original contracts requirement.  Also, there was no restrictions on changing the assets name.  Just grandfather the old assets and make any fee changes on the new assets.

[Nefario]

I think you missunderstand, I'm not interested in the 5BTC fee, I would like your opinion on how best to handle proposed changes to asset contracts.

[stochastic]

I think you missunderstand, I'm not interested in the 5BTC fee, I would like your opinion on how best to handle proposed changes to asset contracts.

If you are speaking about administrative issues, then those decisions would have to be done by GLBSE.

If you are speaking of more the fairness of changing contracts then there could be a lot of opinions of this.

It seems if an asset holder wants to amend their contract then of course they need the shareholders approval according to the contract.  They then contact GLBSE to get the contact amended.

There could be problems with just allowing direct democracy rule though.  Asset holders that are not being watched carefully could create more shares, send them to sockpuppet accounts, and then have enough shares to change the contract whenever they want. 

Another way, might be to require future assets to be listed to not only have one account holder, but a board, maybe the issuer is the head and the next few largest holders could make up the board.  They would be required to authorize any more shares/bonds to be issued.

For assets that are dead, as in no shares out.  The contract could be changed upon request by the asset issuer and approval by GLBSE based on any new contract guidelines.

I think what is most important though, is to get a contract between GLBSE and asset issuers.  Set out what is required of an asset issuer, the expectations of privacy, the fiduciary duty to shareholders, etc.

[Puppet]

One shouldnt allow a change of contract without unanimous shareholder consent.  Every share represents a contract between issuer and shareholder, a third party (other share holders) has no right to change that contract.

There might be an argument to be made to allow addendums to a contract if a majority votes for it, but only as long as the addendum doesnt infringe on the original contract.

[DeathAndTaxes]

One shouldnt allow a change of contract without unanimous shareholder consent.  Every share represents a contract between issuer and shareholder, a third party (other share holders) has no right to change that contract.

There might be an argument to be made to allow addendums to a contract if a majority votes for it, but only as long as the addendum doesnt infringe on the original contract.

That isn't universally true.  As long as the contract specifies the contract can be modified under conditions (x,y,z) like say approval of 66% of outstanding shares then a change doesn't violate the original contract.  The original contract was subject to modification.  The shareholder agreed to that when buying their shares.

I do agree in general that if Nefario wants to tighten up standards it will need to be done forward looking.  Simply forcing changes on existing contracts shows a lack of respect for the property rights of others (both asset issuer and shareholders).

[Puppet]

That isn't universally true.  As long as the contract specifies the contract can be modified under conditions (x,y,z) like say approval of 66% of outstanding shares then a change doesn't violate the original contract.  The original contract was subject to modification.  The shareholder agreed to that when buying their shares.

Doesnt change my opinion that you should not allow it. Allowing it means a majority shareholder can change the contract so that he is entitled 100% of the dividends or give himself the right to buy other shares at 0% of face value.  You may argue that the minority shareholder should have thought of that possibility before buying, and technically that might be true, but its still a terrible idea IMO. The issuer will want to have the possibility to alter the contract, so every issuer will put it in there, and its only a matter of time before its grossly abused.

[stochastic]

That isn't universally true.  As long as the contract specifies the contract can be modified under conditions (x,y,z) like say approval of 66% of outstanding shares then a change doesn't violate the original contract.  The original contract was subject to modification.  The shareholder agreed to that when buying their shares.

Doesnt change my opinion that you should not allow it. Allowing it means a majority shareholder can change the contract so that he is entitled 100% of the dividends or give himself the right to buy other shares at 0% of face value.  You may argue that the minority shareholder should have thought of that possibility before buying, and technically that might be true, but its still a terrible idea IMO. The issuer will want to have the possibility to alter the contract, so every issuer will put it in there, and its only a matter of time before its grossly abused.

Like I said earlier, contracts in the future should require some kind of better organization structure.

[DeathAndTaxes]

That isn't universally true.  As long as the contract specifies the contract can be modified under conditions (x,y,z) like say approval of 66% of outstanding shares then a change doesn't violate the original contract.  The original contract was subject to modification.  The shareholder agreed to that when buying their shares.

Doesnt change my opinion that you should not allow it. Allowing it means a majority shareholder can change the contract so that he is entitled 100% of the dividends or give himself the right to buy other shares at 0% of face value.  You may argue that the minority shareholder should have thought of that possibility before buying, and technically that might be true, but its still a terrible idea IMO. The issuer will want to have the possibility to alter the contract, so every issuer will put it in there, and its only a matter of time before its grossly abused.

Well that possibility exists in every shared contract.   However there are remedies.  One option would be to prohibit certain actions in the contract and a second would be to allow minority shareholders to challenge any change in arbitration (judge.me for example).  You could make a term of the contract that all parties (to include GLBSE, the asset owners, and all shareholders agree to binding arbitration in the event of a dispute).

The problem is most contracts to date have been a paragraph is size.  They are woefully inadequate to provide shareholders any real protection. 

[stochastic]

That isn't universally true.  As long as the contract specifies the contract can be modified under conditions (x,y,z) like say approval of 66% of outstanding shares then a change doesn't violate the original contract.  The original contract was subject to modification.  The shareholder agreed to that when buying their shares.

Doesnt change my opinion that you should not allow it. Allowing it means a majority shareholder can change the contract so that he is entitled 100% of the dividends or give himself the right to buy other shares at 0% of face value.  You may argue that the minority shareholder should have thought of that possibility before buying, and technically that might be true, but its still a terrible idea IMO. The issuer will want to have the possibility to alter the contract, so every issuer will put it in there, and its only a matter of time before its grossly abused.

Well that possibility exists in every shared contract.   However there are remedies.  One option would be to prohibit certain actions in the contract and a second would be to allow minority shareholders to challenge any change in arbitration (judge.me for example).  You could make a term of the contract that all parties (to include GLBSE, the asset owners, and all shareholders agree to binding arbitration in the event of a dispute).

The problem is most contracts to date have been a paragraph is size.  They are woefully inadequate to provide shareholders any real protection. 

If they are more than a page, most will not read them and won't understand.

[markm]

I am starting to be glad that in Open Transactions assets are identified by the hash of their contract so that even a totally trivial and semantically null change results in a different hash thus a different asset. It means this entire argument will not have to be rehashed (hahahaha punny) when using Open Transactions platform.

-MarkM-

[Puppet]

Well that possibility exists in every shared contract.   However there are remedies.  One option would be to prohibit certain actions in the contract The problem is most contracts to date have been a paragraph is size.  They are woefully inadequate to provide shareholders any real protection.  

If the contract has to list changes that are prohibited, such list can never be exhaustive and include all possible swindles. Its just unfeasible.  A much more realistic solution is that any shareholder that doesnt agree to a change has to be bought out on terms he agrees to, which is the same as requiring unanimity.

and a second would be to allow minority shareholders to challenge any change in arbitration (judge.me for example). You could make a term of the contract that all parties (to include GLBSE, the asset owners, and all shareholders agree to binding arbitration in the event of a dispute).

On what grounds would you allow a dispute? IOW, what would judge.me be ruling on? whether or not a contractual change is "fair"?

[DeathAndTaxes]

If they are more than a page, most will not read them and won't understand.

Then they shouldn't be investing.  That is the reality.  The operating agreement for our LLC is 18 pages and is stripped down excluding all legalese and just starting the right and responsibilities of members (LLC have members not shareholders).  The operating agreement or articles of incorporation for a major company is on the order of 50-100 pages.  Now I am not saying a contract on GLBSE needs to be 18 pages.  It might not even need to be more than a page but it should cover all major aspects of the operation. 

If the contract is a paragraph or less then the shareholder really has no rights.  It is merely a honor system.  
The shareholder is implicitly trusting the exchange and asset issuer won't screw them over. While that is fine but GLBSE is never going to grow beyond its current state unless people can trust larger sums will be handled in an equitable manner.  To do that requires putting more details explicitly in the contract and not left up to assumption.

[DeathAndTaxes]

On what grounds would you allow a dispute? IOW, what would judge.me be ruling on, whether or not a contractual change is "fair"?

Essentially.  People have this mistaken conception that the "law" (and we will use third party arbitration in place of the courts here) defines every aspect of every scenario imaginable.  The reality is it doesn't.  The law, contracts, regulations are more like guidelines.  A lot falls between the cracks.  Most of the time all parties can reach an equitable solution even when something isn't explicitly defined.  If multiple parties can't reach an equitable consensus then it falls on an independent third party to make a decision.

So lets take Matt's idiot bet.  I am 100% convinced that any third party arbiter would squash his "reason" for nothing paying.  It was nonsensical.  The contract doesn't have to define that the example isn't binding and is just an example in order to make that so. 

Look I am not saying it "should" be done this way or that way.  I am just saying that in the real world contracts do need to be revised, and amended.  The idea that you can't have that without allowing 51% of shareholders to rob the 49% is just silly.  As Bitcoin "grows up" it will need to forge its own standards otherwise things like GLBSE are merely toys where nerds rob other nerds pretending to be doing real business.  In other words GLBSE is just Eve Online without the starships.

[stochastic]

If they are more than a page, most will not read them and won't understand.

Then they shouldn't be investing.  That is the reality.  The operating agreement for our LLC is 18 pages and is stripped down excluding all legalese and just starting the right and responsibilities of members (LLC have members not shareholders).  The operating agreement or articles of incorporation for a major company is on the order of 50-100 pages. 

If the contract is a paragraph or less then the shareholder really has no rights.  It is merely a honor system. 
The shareholder is implicitly trusting the exchange and asset issuer won't screw them over.

Most people don't even read their prospectuses for their mutual funds.  It is just the reality of investing.

[DeathAndTaxes]

Most people don't even read their prospectuses for their mutual funds.  It is just the reality of investing.

Which is why they pay taxes to the SEC to handle their responsibilities for them.  Entities like the SEC ensure that even idiots are shielded from the true risks of blindly investing.
So getting a little meta either you give over responsibility for the state OR you take person responsibility.  You can't have it both ways.  Nefario seems to be taking some of that "SEC like" role.  By putting up min requirements and specifying default contracts it would provide at least some protection.

Also I would point out in a community each shareholder isn't a "island" they can ask questions.  While the responsibility is still personal they can draw from the knowledge and expertise of others.  Community members can provide explanations.  Members can point out the risks of a contract saying X or not specifying Y.  At least putting it in writing creates a starting point.  Better and better contracts will be built by looking at prior contracts.  Simply having all rights undefined and nebulous prevents any sort of "best practices" to emerge.  

[silverbox]

 ... In other words GLBSE is just Eve Online without the starships.   ...

lol, it isn't??