I would rather see an exchange that requires buyers to hold their shares for at least x days or weeks, and slow everything way down so that people are actually forced to make decisions based on fundamentals rather than trading based on jitters in market movement. Then the datacenter location is almost irrelevant.
You can construct a synthetic long or short position with options [0], so those would need to be removed as well. Options are much too useful for market participants (market makers in particular), so your idea is dead in the water.
[0] For US equity options, if you sell a put and simultaneously buy a call at the same strike price, you have a synthetic long that acts like owning 100 shares of the underlying asset (no dividends, but that’s already priced in to the options).
Buy a put and simultaneously sell a call at the same strike price and you have a synthetic short that acts like being short 100 shares of the underlying asset.
The proposal is because I don't think a bunch of people playing games with money provide any sort of value. If you could only buy a valuable company in such a way that options and HFT trades were excluded, then you would just have to invest in the company and support its growth. That is the goal of the structure. I completely agree with you: If the bloodsuckers don't have to do so, they never will. I would prefer it were law, but second best would be a place where companies could opt out of the anti-culture of wall street and still be publicly traded.
News happens and things change quickly. Also there is arbitrage between similar assets, and investors benefit when that arbitrage is reduced by frequent trading.
