Stock voting rights and fund settlement for buying stocks. By Spencer Hurst of MercuryVote

Spencer Hurst
Thank you.
Konstantin Dubovitskiy
It is not starting to record for some reason. Just. There we go. And today as a guest speaker we have Spencer Hurst,
founder of Mercury Boat. And this is a pretty unique episode because it's not going to be entirely focused on the
payments as we usually do. There's gonna be a chunk of it. But today we are going to cover things that very, very few
know about, which is how stocks work, specifcally how the back end of the stock market operates. So you know
what happens when you buy a share of a mutual funds, who gets the money, how does the money get settled? So of
course we're going touch onto the payment side of it, but most importantly we're going to talk about the voting rights
that come along with purchase of an individual share within mutual fund or an individual stock.
Konstantin Dubovitskiy
How does that work? And specifcally how Mercury Vote is changing who actually gets to participate in those voting
thingies. Sounds horrible, sounds very unprofessional, but it's okay, we're going to stick with that point. We are going
into stuff talks today. So Spencer, save me here, take it away. Tell us about yourself and about Mercury Vote.
Spencer Hurst
Good morning Constantine. A pleasure to have you on and well, more importantly to be talking with you today. So to
give you a bit of background on myself, I ended up, you know, founding Mercury Vote as an when I was in undergrad
and ended up, you know, kind of realizing, hey, these corporate voting rights, they are fungible, they're able to be
traded independently of the stocks themselves. And that led me down a giant rabbit hole into researching and
learning about the entire back end, the stock market. So what are the topics would you want me to go over frst? We
can talk over them. We can, you know, chit chat briefy.
Konstantin Dubovitskiy
Tell us about Mercury Vote just so that everyone has a clue of, you know, where we're coming from. And then we're
gonna start with the settlement process specifcally for the settlement of the funds. And then we're gonna go into
the actual voting rights and why the are they tangible?
Spencer Hurst
Yep, there you go. Okay, so a bit of background about Merkava. Ultimately, you as a shareholder have a right in a
corporate election to decide who's on the board. And that board will end up deciding the CEO, the C suite, as well as
quite a few other things. Whether or not you're going to do a merger and more importantly, it's just the direction it
comes down to control. So when you take a company private, you ultimately end up going and trying to take over
what is 51% of the shares to be able to have 51% of the votes. You're able to pretty much push anything through at
that point. Yes, there are minority shareholder voting rights, and there's other concerns when you don't take it
completely private. But this is the general trend now. Why does this matter? Well, let's be real here.
Spencer Hurst
Retail investors, let's just take your average American, they rarely vote for the President. That's not happening. Like,
you know, it's getting them out is a billion dollar process. And I don't see busy spending a billion dollars every
election to try and get somebody out. So ultimately, it's an aggregation issue. What you end up having is retail
shareholders disaggregated, own 30% of the stock market. The rest will end up being mutual funds. And the other
institutional investors think you're Goldman Sachs, think you're State street, your vanguard. But what you end up
having is this huge pool of votes of which 70% of those shares will never go voted, so that if you multiply them out is
21%, 21% is just up for grabs.
Spencer Hurst
And what we're trying to do is create an aggregation system, an online auction, where ultimately this isn't a security
in that sense, because you aren't doing a speculation. You aren't trying to, you know, make what is a. Let's just say,
you know, plungeball asset, where I think that, you know, there's a 50 chance that there's going to be an activist
campaign in Disney. So I'm going to try and like, you know, buy up a ton of Disney, then sell it. No, we do it one time,
one sale at the actual date of record, and you're able to now decide or alternately, on the day of the election itself.
And that's where you end up getting paid out as a retail investor.
Spencer Hurst
Because let's be real here, I wouldn't know whether or not it's in my best interest right now to vote for Bezos is, you
know, individual slate of electors, or if it's his, you know, the contrasting contrarian take of some activist. It's just not
within my ballpark, nor something that I want to do every election cycle.
Konstantin Dubovitskiy
Mm. That is people, what we should have put at the beginning. Honestly, this is exactly what we're gonna jump into.
The reason why I struggle is because I do not understand this subject to the extent where I can't even describe what
we're going to talk about. So get hyped. We are going into the frst part of the conversation, which is what happens
when you buy Mutual funds. Let's, let's start with a mutual fund. Average American goes on Robinhood. I myself do
the same exact thing. I go in Robinhood, I buy a piece of a mutual fund. Do I know where the fund settled? No. Who
gets the money? Tell us about the fow of the funds here. I click the button on Robinhood saying, invest at XYZ Price.
Spencer Hurst
Welcome to the insanity of the back end, guys. It's going to be fun. So ultimately, let's, let's go back in a time
machine. We're now in the 80s. You know, is rock and roll hip at this time? I don't know. So we are now ready to go.
Your either father, grandfather, or something in between. If you're depending on the age, you know, of our listener
right now, you are now going to be actually, if you are a fnancially sensible individual, taking what is your part of your
paycheck and literally handing it over to what is one of these big mutual fund companies. What we Learned in the
70s is that what you want to have is low risk but high returns. Usually it's hand in hand. The mutual fund gets rid of
this because diversifcation was a cheat code.
Spencer Hurst
Somebody did the math giant nerd. They showed a curve on a graph and they were like, well, shit. We have now
achieved a higher return for the same average risk, which means overarchingly, that just means a greater return,
period. That is the trick of the mutual fund. So now you literally buy a subscription. You would send a part of your
check every month and they would literally physically cash that proceed to buy all those shares through a custodial
company. Custodial banks. That's going to be insane on its own side of there. But these mutual funds would now
take it. Ultimately, they don't really make money based off of how well you perform or the market performs unless
they're an actively managed mutual fund. Most of them nowadays just generally passive. It means low actual work,
low actual, you know, risk. It's.
Spencer Hurst
We just want the most money under management. And that's how Vanguard won into the modern era. Because they
would just say, hey,.02% is our fee. But now they manage trillions of dollars. And that's how you end up like
completely taking over an industry. When you have 0.2% of a trillion dollars, that hits.
Konstantin Dubovitskiy
So sure it does.
Spencer Hurst
Where should I go into next? What is where? In the back end. I can talk to you about the custodial banks where they
buy this stuff on the behalf of them. I can tell you about the. Pretty much how the money gets, you know, transferred
in. I can tell you about the incentives.
Konstantin Dubovitskiy
Let's start with the thing that you mentioned, which is where in the olden days. And let's start migrating a little bit
closer to the modern age. You said that they used to. So the mutual funds would used to just actually go out and buy
stocks on your behalf. Right. What if nowadays you can invest as little as fve bucks, less than fve bucks in
Robinhood, I'm pretty sure. So let's say you buy $5 off of mutual funds. That's not enough for any given share. What
happens there? What, what's going on? Okay, so modern age. No more disco.
Spencer Hurst
Let's go to the modern age now. We're now in techno and house music. Times are changing now. Why does this
matter? Those ETFs, exchange traded funds different than mutual funds. Because actually they're the ones listed on
your brokerage. Yes, some mutual funds are listed on your brokerage, but I'm not gonna lie to you, there are
genuinely like, let's say mutual fund from Franklin Templeton existed in the 80s. Some of them just aren't listed over
there. You actually have to go through their catalog. And this is like olden days stuff into the modern era. Okay, so
you now put money in. There is a T plus one. I can talk to you about like how the settlements work and we move
from the T plus 2 to now T plus 1.
Spencer Hurst
There's a chance it might go to T plus 1 half we can talk about. You know, I'm not gonna lie to you and your crowd
will at least appreciate this.
Konstantin Dubovitskiy
Let's do it.
Spencer Hurst
We went from what was 8 million shares being traded a day back in the 70s to now 6 trillion. So this is where like you
know, how do we create these efciencies? Ultimately we go online, we try and do these things. Mutual funds
ultimately. Well this gets into a full on side tangent. So you're going to have to pull me back later. The whole logic
here is this. In terms of the backend, how does this actual transfer work? How does the money go in? You end up
paying the mutual fund. The mutual fund goes out and buys the shares. Buys a basket. A basket of stock is just a
general grouping of it according to the mutual funds prospectus. You now go next step over.
Spencer Hurst
What they are going to end up doing is talking with a brokerage if they are not the brokerage house themselves. Or
alternatively just going into the market and getting those shares the way that works is super interesting. What you
have is what is the market efciency and the attempt to create that. What you ended up having long ago was the
creation of the DDTCC or the DTC. It goes by other names and the depository trust company, that's actually what has
your name on ownership there. They end up working in this schema, in this banner. Before I get into them though,
where this actually matters and how does this all work? You end up working with a. Feel free to retract me from like
that entire last point.
Konstantin Dubovitskiy
We're doing good so far.
Spencer Hurst
I'm gonna realize, you know, the dtcc, we'll get into that later because you'll want to hear about the transfer agencies
frst. What you end up having issuers. In the case of the mutual funds, the money now happens and they're on it now
they need to keep a table. They need to know who owns their shares.
Konstantin Dubovitskiy
Right?
Spencer Hurst
This is where you know, we get into how does the transfer money work? How does the back end work? You're a
company, you're Nike, you make shoes. You do a damn good job of making shoes. Unless you're in the modern era
where you get decided to like fre all, you know, your recent accomplishments and we're just going to make comfort
shoes. And then I slipped on a rail grate and we'll talk about that later. But you know, love my Nikes. They make good
shoes. They don't keep track of who owns their shares. That is not their job, that is not their specialty. So why does
that matter? Well, let's be real here, markets love efciency. They outsource that to a transfer agency. The transfer
agency is the modern day equivalent of the record keeper. Imagine them as the nerd in the library.
Spencer Hurst
My dear best friends, the introverts being meticulously keeping up to date all the different information. And so what
you end up seeing as we go through history once again, back in the day you'd have your name actually nexted next it
next to it in the list being able to this thing off. Then that changes because the brokerages realize we really don't
want you knowing who owns what in a lot of ways. And also, you know, we're just going to create what is an
omnibus account.
Konstantin Dubovitskiy
Oh lovely.
Spencer Hurst
And so they end up now attributing all of their shares into themselves. And now it's a huge account that says hey I'm
actually this is what we call street name versus real name. Street name is where it's held in quote unquote fdelity. If
we, it's actually, I'm not gonna lie, this is why it's called proxy voting. It's proxies all the way up and down. It's people's
being appointed in name repeatedly. And so what you have at the top level is your shares are not owned in your
name. You have an indictive ownership. You have legal rights to all of it. But the dtcc, as I mentioned that company,
for efciency's sake, we don't want to reprint every share a million times to be able to, you know, say hey, this person
owns this. We just backlog.
Spencer Hurst
And so ultimately we are taking a system that was developed in the 1800s by the Dutch and just fnagling it with as
much legal coding as humanly possible to shenanigans our way into a fnancially efcient system in the modern era
of technology.
Konstantin Dubovitskiy
All right, let's, let's slow down here. There are two terms that I want clarifcations for. Number one, omnibus. What is
it? How does it work? I'm familiar with it from the fnancial perspective where omnibuses within banks and they're
subledger. But for our listeners who might not know it, let's do what omnibus is and specifcally what it is in the case
of stock ownership.
Spencer Hurst
Okay, so it's a practical concept. What you end up having is. Let's just say I'm a big money manager in any institution.
I manage a lot of individual different people's money. I might not want you knowing who actually owns all these
individual different, you know, accounts, who owns all the different mutual funds, who owns all the individual
different shares. That's where we'll end up saying, hey, Spencer's brokerage. You know, we're just gonna the same
way Charles Schwab decided to name a brokerage after him. Why not?
Konstantin Dubovitskiy
Why not?
Spencer Hurst
There we go. I'm gonna say that hey, it's more efcient for me to keep the record keeping on my back end because
I'm a brokerage. That's literally all I do. That and doing buying and selling and open market operations. So what you
end up doing is I own that 1000 shares in my name on the DTCC through to me now down to you own that through
me. And that's where it will be shown actually on the ledgers. But it is in part to protect your name in some ways.
And it's also just a matter of me keeping private information private for myself.
Konstantin Dubovitskiy
Okay, so to clarify, there's a big account where Spencer's brokerage owns a bunch of Shares in its name. It is then
subledger to the users who buy small pieces of the ETF or mutual funds. Which is done through Spencer Brokerage.
Correct.
Spencer Hurst
There you go. And it makes trading too, by the way. That's actually the big thing. That's how we got to T +1.
Konstantin Dubovitskiy
That's how it's trading faster.
Spencer Hurst
It is because when I make a trade, it can go intra brokerage or inter brokerage. Ultimately I will say that, hey, let's say,
you know, there's this guy Constantine, he wants to sell his 50, you know, Nvidia stocks today. Let's go over here and
decide. Well, that means I need to now at least in like a state, hey, 50 are being sold. But that's not going to happen
on this moment. What's going to happen actually is I'm going to now settle that over in the DTCC through all the
omnibuses. But I'm going to go and talk to all the other omnibuses with let's go say Charles Schwab. Let's go say
Goldman Sachs. And essentially the best deal for you and the best deal for me, where we make the most money
ends up being what is sold. Where it's sold.
Spencer Hurst
It will move from my omnibus over to Charles Schwab's.
Konstantin Dubovitskiy
Okay, gotcha. So there is an actual transfer taking place or potential taking place rather than just sub ledgering
within Spencer's brokerage where yep, it just changes hands within your omnibus account.
Spencer Hurst
True. And that also can happen. That is like, you know, a current, you know, equivalence but at the like at the same
time. This is the standard practice right now it's just a huge efciency increase and it's just a matter of like, you know,
making actual settlements faster.
Konstantin Dubovitskiy
Right.
Spencer Hurst
Instead of it just being you doing it, imagine now you have a thousand people making the trade.
Konstantin Dubovitskiy
Right.
Spencer Hurst
You make that trade one time at the end of the day.
Konstantin Dubovitskiy
Right, Right. Okay, so now let's talk about the main subject of the entire podcast, which is actual money settlements.
So I make the purchase. My hard earned money goes from my bank account to the account of Robin Hood. It hangs
there until I make the choice on what I want to buy. I make a decision of buying 10 Nvidia stocks. Where does the
money go afterwards? Where is it disappearing? Who takes it?
Spencer Hurst
Okay, so welcome to the behind the scenes different things. You put the money into the brokerage, Congratulations,
you now have been accredited. That might take you genuinely a day and a half. That is like we have T plus one as I
mentioned earlier. That's like I'm, I cannot wait until we get to T +1. What you'll end up having is if your brokerage
trusts you because Robinhood, let's be real here, they'll trust a lot of people, let's be honest. Might as well trust you
with giant option goals that are, you know, look, if the federal government will trust me with a giant loan to go and
take a, you know, to go get a, what is a, A great university degree, who knows what they will trust me with?
Konstantin Dubovitskiy
So it's true.
Spencer Hurst
True enough. Let's go over to the idea of they're going to accredit you and just give you the money automatically.
That's a standard practice now, but some older brokerages might not. It will take around one day for that money to
come into your account. Also though, what you'll now have is this. You're going to place a trade, you will see it in your
account immediately. But like the actual money, the actual stocks don't settle immediately. The key Logic, it was May
2024, if I recall. The, the cornerstone of this, which ends up deciding that, hey, it's a T plus one account, the cash you
owe on the settlement. The brokerage will just, you know, deduct that temporarily because if it doesn't go through, it
is pretty much. This is like your ability to claw it back in many ways or my equivalence of that.
Spencer Hurst
So let's just say, hey, you have a confict of interest or something else, you didn't realize it, you cancel it within that
one day. Okay, now in the case where you sell it, you can't withdraw those funds like the other case where you're
seeing the money on your account, you can't withdraw the funds. They might let you do it on just the principle that
you now have accredited money on their account anyways. And so look, you quite literally have the equivalence of
the stock itself as that, you know, collateral should you pull out the money, but they truly sold, quote unquote, until
later in the day.
Konstantin Dubovitskiy
Gotcha. Okay, so that's where the delay comes from. It's not from the fact that, you know, the inter brokerage
relationships are settled through ach.
Spencer Hurst
This is dtcc, my friend. This is where it actually settled all the way up at the top.
Konstantin Dubovitskiy
All right, well, let's go back to dttc. I glazed over that one because it's too long of a name. I'm like, yeah, I'm not doing
that. All right, how is DTTC involved in the actual fund settlement process and why is it involved at all okay, so.
Spencer Hurst
This is where went from the 70s where you had 7 million shares a day being traded. Now we are at 6 trillion there.
Like by the way back, I want you to know this. Imagine me and you quite literally like you know, best of buds walking
through what is you know, Times Square to go literally hand over giant stacks of paper. And I don't mean any paper, I
mean the actual shares in your and my name because it was sold to Charles Schwab, baby. No. We are no longer at
that physical point where this could be done that has passed us by generations. So ultimately think of the DTC as a
warehouse. Pretty much. It will hold in all of this in electronic form. I like imagining it in my own mind as like
congratulations, it's the Fort Knox of the modern shareholder industry.
Spencer Hurst
In the same way Fort Knox will end up housing the entire world's nations gold unless they choose to re shore their
gold. That's a whole thing. We're ignoring France right now because the French. All right, but what you have is they
just update pallets that you when France gold with Germany. Germany just owns a new pallet of gold. They don't
actually end up you know, moving it over into Germany. That's risky risk in this industry. So the actual settlement
organization that runs this entire system, the transfer of ownership and the stocks and other securities this ends up
making it like this all works through the dtcc. You don't need to actually move physically any of these shares
between these companies anymore.
Spencer Hurst
I, I will say I do actually like you know, what a museum to exist on either you know, Wall street or more importantly,
you know, all the way in the fnancial districts at some point. Which just shows all the beautiful artistic work on these
shares because they are like if you have own a Disney share, it literally has all the old cartoon characters on there.
Disney. Well, sorry. Mickey Mouse. I'm terrible at saying that. Mickey Mouse, Minnie Mouse. All of them on those
shares. And it's beautiful artistic works. And then you know now the modern day where no one ever sees them.
Konstantin Dubovitskiy
Yeah. No corporate did the thing where.
Spencer Hurst
Yeah.
Konstantin Dubovitskiy
As it should be going back to the of course the settlement process within dttc. All right. I'm paying Robinhood or well
my funds are in Robinhood. Let's say that I end up purchasing the or Robinhood goes out and they are making a
counter trade. So I'm looking to buy, someone's looking to sell. The person who's looking to sell is located at TD
America. I forgot if that's the Thing. It is a thing. The other trading platform. Right. So the funds do have to migrate
somehow for me, the individual user, to damn the individual user. What, how does that get settled? That's the real
question for me right now.
Spencer Hurst
Okay. I believe it's called the fx protocol. I need to remember what that stands for. Fix protocol.
Konstantin Dubovitskiy
We're googling on the fy, people. We're googling on the fy.
Spencer Hurst
That's why you got this fnancial information exchange protocol developed by Fidelity back in the day, the old alma
mater. Now the whole logic there was this is like, you know, imagine like everything moving by paper back in the day
prior to the Internet, because the stock exchange really does exist prior to the modern Internet, which is something I
fip out over on a day to day. This is when I say imagine. We imagine Marcus is perfectly efcient. And then there's
me with my history degree and my CS degree just sitting here looking at this, where I'm like, this is held up by
potentially Scotch tape, duct tape, four layers of abstractions to try and make this thing work. The irony of the dtcc,
by the way, is every brokerage has some buy into it.
Spencer Hurst
The way that they ended up making this whole thing like, you know, work where like a lot of the brokerages didn't
want to move online throughout the 80s because it's like we feel like we're giving up control, we're giving up a lot of
the power that we've historically had. And the way that ended up like, you know, the DTCC is partially owned, like the
frst 1000 quote unquote owner slash investors slash like rulers of this are Fidelity, Charles Schwab, you know,
Goldman Sachs. You'll always see it in the names of the people who actually have the quote unquote buy in on it. But
that gets away from your initial question of let's talk about how does the actual, you know, technical back end work?
Konstantin Dubovitskiy
Let's do that. That's the goal. That's the goal. We'll settle that. Then we'll do a recap of what the is going on here,
because there's a lot. And then we'll move on to the subject that I'm really looking forward to, which is the voting
rights. How do they work and why can you buy and sell them?
Spencer Hurst
That. That is.
Konstantin Dubovitskiy
Yes. Cool it, cool it.
Spencer Hurst
Let's.
Konstantin Dubovitskiy
Let's do the recap. Let's, let's start with answering the question how do the funds migrate from one individual to a
different individual, where they actually go from one external account to A different external bank account that are
completely unrelated.
Spencer Hurst
Well, okay, so what you're gonna have is step one. You're gonna place the order you've already put the money into.
What is this whole, you know, the brokerage. Think of it in many ways like a bank account itself. You're putting the
money into the brokerage. They have an afliation with some bank. The money now is there. They will probably put
into a T bill where it's like, hey, we have some amount of Treasuries. That is what. Like how we're able to guarantee
you some level of return just for putting money on our platform. Because let's be real here, they just like having
assets under management.
Konstantin Dubovitskiy
They certainly do, yeah.
Spencer Hurst
So then the next one, you are going to go into the order management system and each broker has their own internal
order management system. There's a few different groups that end up like, you know, trying to deal with. How do you
do the routing logic? Because you need to like, don't get me wrong here, High frequency trading, that's a topic for me
and you to talk about in a future podcast down the line. But ignoring high frequency trading, you need a way where I
don't want. This is something you'll see in crypto as well. But crypto has it far signifcantly worse. It's where I see that
you in the distributed ledger are trying to order what is a thousand Ethereum.
Spencer Hurst
So I'm going to go and buy a thousand Ethereum at the current price, sell it to you at the markup that you're willing to
buy at, and then proceed to pretty much make purely a proft on that. It is front ordering the system because by me
ordering 1,000 before you, it presumably ramps up the price. And then I'm able to put a sell order in at the same time.
And so that's where you just pay extra gas fee. We don't have that in this fnancial system at the very least because
there's a lot of privacy protections. And also, we're not going to talk about, you know, how Robinhood works. Please,
please don't make me talk about payment forward fow. That, that gets into a whole host of.
Konstantin Dubovitskiy
No, no, let's. Let's simplify as much as possible. I'm like, wait, how do we get to gas fees from here?
Spencer Hurst
What the.
Konstantin Dubovitskiy
No, no, get back on track.
Spencer Hurst
I got you, I got you. Simplifed language, simplifying it as easily Random.
Konstantin Dubovitskiy
Joe to Random Joe is sending money or.
Spencer Hurst
Well, yeah, funds have to settle. So then you know the protocol that they end up Using. That's what I mentioned
earlier. They use the fnancial information exchange protocol. And thus that is, you know, the main one that was
developed by Fidelity. And then everyone else just kind of jumped on the bandwagon. Thank God for efciency. Now
next comes up the trade execution. And this is where you just create a market matcher. This is where you know the
internal auction. Imagine a computer, but now we have paddles and you know.
Konstantin Dubovitskiy
Yep.
Spencer Hurst
Everything comes up buy, sell. And you try and fnd what is a matching price. So will now update their internal
ledgers where it's going to be now stating unsettled shares next to your account. It's a fag. Your account now has
that. Hey, either you are buying or you're selling. This is not yet settled, but there has been things going on. Limit
orders, make this thing go more complicated.
Konstantin Dubovitskiy
All is good. All is good so far.
Spencer Hurst
All is good so far. Now clearing initiates. What you end up having is, you know, internally or externally, you'll have, you
know, Pershing, let's say your Schwab, you're now going to say, hey, the process is now begun. There is now a
clearing partner that you're working with. If you're working with Pershing. Perfect. And you know you're going to now
report it where it's going to be the price, the symbol, the size, the counterparty. And that is sent to the nscc, which is
a division of the dtcc. We're not dealing with their divisions. Welcome to fnance, guys. Have fun. There is only. There
is quite literally Alphabet letter soup. This is worse.
Konstantin Dubovitskiy
Not touching it, not touching it. Spencer, back. Back on track, back on track.
Spencer Hurst
So now what you end up having is the evening batch. You have now hit T plus 0.
Konstantin Dubovitskiy
You.
Spencer Hurst
It is D day, boys. We are now landing. And so you bought 5 million shares, you sold what broker A buys 5 million
shares. You sold 4 million. You net 1 million owed. So ultimately what I mean there is. You aggregate across all the
different net obligations because you among everybody else have made. I'm going to choose to sell Nvidia today
because I'm worried that the stock's going to crash. This is not fnancial advice. Do not take anything about crashing.
The market's doing great today. As of today, me and Konstantin talking about this stuff. So do with that information
of what you will is now you're quite literally. What that means is you now are in essence overarchingly. The netting is
done. You have overall done, dealt with it all.
Spencer Hurst
And now there's just settlement instructions where the DTC will work with this company slash organization called
Fedwire. Fedwire is where you get the cash involvement here. And so the securities movement, that is all DTC ledger
updates. That is where you know it.
Konstantin Dubovitskiy
Yep.
Spencer Hurst
It debits shares from the seller and the seller brokerage and accredits buyers with the custodian and the broker.
Account custodians, custodial banks you're going to hear much like you're going to hear proxy custodians just
means, hey, they're the ones holding on to it for you. Don't worry about it. That mostly works with mutual funds
insanity. Now in terms of the Fed wire, they're just going to get you the cash distribution. It clears it out from the
bank. It's kind of like, you know, imagine Western Union, but like, you know, not this time used by some random
Nigerian scammer. So we got this. This settlement type will end up be a delivery or a payment or a receipt. It's
delivery versus payment or receipt versus payment. And that's just to avoid like, you know, certain principal risks. But
why does that matter? It doesn't really.
Spencer Hurst
This is just like, you know, old terminology. Lastly, the fnal booking. This is on the day of T +1. You end up having the
pending settlement goes into settled. The front end UI is, you know, tells you that hey, everything's done, everything's
dealt with. We're living fancy over here. And you know, the custodian records have been, you know, completely, you
know, tagged.
Konstantin Dubovitskiy
Okay. So to clarify all of that being said and done, the fnal transaction is being made by Fedwire to connect the two
entities between each other. So eventually the Joe Randoms get their money by the fact that Fedwire settles the
funds at the end of the day on T Plus 1 and then the clearing of the funds themselves happens on the same day.
Spencer Hurst
Pretty much what you'll end up having is the clearing versus the settlement are two different things. The settlement
itself that is the next day. The clearing that is going to happen on t0day is done. We have achieved it. We're now okay
the next day. Everything works, everything's settled. It actually okay, I'm not gonna lie to you. It used to be options
because they're so time sensitive, had to be cleared day of and that was always what was T +1. You had T +3 back in
the day for what was actual shares and then it was plus 2 and now both are under T plus 1 rule sets.
Konstantin Dubovitskiy
How lovely. We live in a fast paced world and loving it.
Spencer Hurst
All right.
Konstantin Dubovitskiy
Yeah, one more Question before we move on because we do have limited time question on Fedwire. Explain that a
little bit more. You kind of glazed over it. That's the one I'm very much interested in. Familiar with it very briefy. I'm
still very new to the industry, which is weird to say after two years of being this thing. But in my understanding it's
just a wire transfer.
Spencer Hurst
So pretty much it is. It's just a real time gross settlement system. So rtgs, don't worry about it. Alphabet soup. But it's
operated by the Federal Reserve. So the main thing here is it's who uses it sometimes. And when it's the Fed, it
allows you what? Like it allows you to transfer the funds instantly and securely. When you are dealing with the big
institutions, they don't want to use what is some random Joe Schmoes actual, you know, wiring. You're using the
governments at this point because this is if not billions, then trillions of dollars. And let's be real here, you don't want
some, let's just say corrupt nincompoop on the other. Like you know, in the actual system there, where losing a
million dollars when you're on the order of magnitude of trillions is incredibly possible.
Spencer Hurst
Just because you're now dealing with something that is equivalent to $0.01. I lose a penny every other day. I don't
want to do that. But like this is a matter of, you know, you want to make sure that the interbank lending, the large
corporate payments transfers between big institutions, they work real time, they work incredibly efciently and most
importantly, it's fnal. This is like an irrevocable choice. You can no longer. The deal is done. You cannot claw that
back once Fedwire has been institutional utilized.
Konstantin Dubovitskiy
Cannot. Well actually you can dispute wires, but that's a whole other process and we're not gonna go there. Okay,
gotcha. Understood. Just to one last clarifcation, Fed wires are being sent at the end of the day or well cleared at
the end of the day. They're sent in massive batches. Two overall big institutions. So for example, I know Robin hood
user sold 100 million shares or shares worth $100 million to some outside brokerages. DTTC settles everything. Fed
wire then. Or well, fed wire through Fedwire. Robinhood gets $100 million and then it sub ledgers it to its users.
Correct. And then the users can withdraw.
Spencer Hurst
One of the big things to note though is fedwire, unlike the dtcc, this actually will be done intraday. This is done
throughout the day. The System opens at 8:30 Payments start processing at 9am System closes. Final cutoff time
7pm and then system, you know, we're off for the day, 7:30.
Konstantin Dubovitskiy
Okay, so it's not a badge at.
Spencer Hurst
The end of the day, not one big batch. That's more the DTCC and how that all ends up being utilized.
Konstantin Dubovitskiy
Okay. All right. And that gives one more clarifcation because we do have to move on to the voting rights. How
frequently do they send it then? Because I mean, wires do cost money.
Spencer Hurst
I'm pretty sure. I would assume once every fve minutes. But I'd have to double check that. Let me. That is like, not
like. That is not something that is as common to me. I think it could. This is speculation and let's actually settle that.
You know, how often do these.
Konstantin Dubovitskiy
We are googling again, people. Second question on the episode, you know.
Spencer Hurst
You know, I, I claim to be at least a decent expert on the back end of the voting rights and also the transfers. I want
to make sure I do not give any of your wonderful listeners the wrong answer. To the cases that do matter though, like
I, we could speculate on it.
Konstantin Dubovitskiy
But we'll speculate and move on.
Spencer Hurst
We'll speculate and move on. At the very least it's around. Either it isn't like high frequency trading where it's every
millisecond, or now the question, it is simply a matter of you're dealing with every second or minute where it's not.
There isn't a batching process, though it is immediately.
Konstantin Dubovitskiy
Yeah, well, I mean if it's sent every fve seconds, there's got to be batching because they're.
Spencer Hurst
You're doing every two minutes. That, that is the thing where I would assume it would be on the actual brokerage
side. They're choosing to batch rather than them choosing like, you know, the Federal Reserve forcing back in upon
people.
Konstantin Dubovitskiy
Okay, makes sense. Makes sense.
Spencer Hurst
All right.
Konstantin Dubovitskiy
We're not going to go any further into the details of the inner workings of that weird fnancial system. We have a
clear idea or somewhat clear idea of how Random Joe gets money for their shares. Let's move on to the really
interesting part. Let's do another Joe Random who just bought the shares, voting rights of those shares. Tell us
about that. So let's start with the overall and we're. We're gonna extend the episode to a full hour so we have
whopping huzzah.
Spencer Hurst
And yes, let's do this.
Konstantin Dubovitskiy
Still limited. Still limited.
Spencer Hurst
Still limited on time, but we will make it move fast and Break things in the. Okay, so in terms. You are now Joe
Schmo. You are my best friend. We are now walking to what is your local fdelity. We're opening a what? We're
opening a website in the modern day. We're not actually walking there to go buy stuff. But the key thing is you now
own one share of. Let's go with Nike because they don't have classes of shares that aren't extra, you know,
shenanigans or chicanery we need to deal with right now. That will come in later.
Konstantin Dubovitskiy
We're not touching that.
Spencer Hurst
We're not touching that. The big thing is the issuer. They're the company. They need to actually through the rules and
regulations of the SEC's like actual incorporating documents back in the 30s, dealing with 30 sex, not really fun. And
we're not dealing with that either because I'm not a lawyer. But you need to have a corporate election annually. That's
the rule. You need to be able to tell your consumers that. Hey. And that your shareholders, we are taking your
insights and your interest into account when we run this company.
Spencer Hurst
And so this is actually one of the really interesting like push pulls, much like in the federal government, where you
have the distribution of power, where you end up having this push and pull between the legislative, the
representative, and most importantly judicial branch, you end up having between the actual directors, the
management and the shareholders.
Konstantin Dubovitskiy
Right.
Spencer Hurst
And these three different groups will end up pushing around a lot of different things. We're going to ignore the fourth
pillar, which can be the union, slash also the people working there, because they aren't the, you know.
Konstantin Dubovitskiy
Yeah, let's ignore the workers. Of course.
Spencer Hurst
Yeah, whoever cared about the work. No, no. I love you workers out there. Don't, don't die on the line. Stay alive.
Konstantin Dubovitskiy
Unions are great. Unions are great people.
Spencer Hurst
We appreciate y'all doing good works. Now the key thing is those transfer agencies I brought up earlier. They're the
ledgers they keep and know who owns what. They're the not exact arbiter of truth because think of it like an inverted
feudal system. You, you would think the issuer knows everything. You would think the DTCC knows everything.
Neither does, because it has been so abstracted down to the brokerage level. What you're going to have is now a
relationship game. This is where the real game of smoke flled back rooms and most importantly, cigar and whiskey
take over. Yep, let's play. You have the transfer agencies. They have the records of who owns, quote unquote, what
who has voted all these different groups. You need the issuer to approve you to know that information. That's how
proxy solicitors work to defne that really fast.
Spencer Hurst
A proxy solicitor is simply a person hired by either the company or an activist trying to push a new slate of directors
on the board to go and call you to go and vote and get you to actually show up to this election on their behalf. Let's
be honest here. If you are actually a, like, let's say a smaller company with less institutional involvement, they won't
even do that. They don't care how you vote. They already have one. They have 90% approval for what they want to
do. They just need you to vote to reach quorums, where you have a certain number of people show up to an election
to make it valid. Me and you, let's say we're a small town. There's a town of 100 people and we all know that there's
an election coming up.
Spencer Hurst
For this election to be valid for the mayor, we agree that 50 people must show up. Otherwise, me and you just
showing up and voting for me could win the election. No one knew the election's location or anything else. It's a
security thing, right? Mutual funds, on the other hand, they don't have to have an election every year. But what they
do need to have, because of the Investment Company act, also known as the Forties act, they require 50% of people
to show up for any election for it to be valid. It has gotten bad enough that I have heard stories of genuine mutual
fund managers coming on the phone and being like, your returns, your actual retirement savings are getting partially
reduced by you not voting.
Spencer Hurst
We are so reliant on getting this next trustee in that we need you to please just show up. This one election, this one
time, we do not care. You vote yes, you vote no. Does not matter to me. Just trust the aunt level to clarify.
Konstantin Dubovitskiy
This is not in person showing up, is it? In person showing up?
Spencer Hurst
Tell me you could do that if you want to. That's rarer these days. I went to the. There was a great conference called
the Council of Institutional Investors. They. Sorry, that's an organization that runs a conference I went to like last
month. We have moved to an online setting. Now, imagine a zoom university, but for companies.
Konstantin Dubovitskiy
Oh, God.
Spencer Hurst
Yeah, you can vote by proxy. It's proxies all the way up and down. You just appoint somebody as your proxy by telling
them how to vote on your behalf. That's how a lot of the modern systems Work because as I told you, duct tape is
the order of the day. You end up going with a system and a schema that ends up how to best explain this? There is a
physical location that many of them have historically used. You would actually like if you wanted to vote in Disney's
corporate election, you would go to the actual hall, you would register that you are showing up and then you would
be able to speak or ask questions, share your mind. But now in the modern day, there was a great union
representative, I think it was the pension board.
Spencer Hurst
I'm forgetting of who from Colorado that was speaking on this panel mentioning how it is sometimes a seven minute
affair on these online platforms where instead of it being everybody shows up for the day and there's a Q and A
session and we already know the votes ahead of time because people have talked, people have already pre voted
and stuff like that. It now ends up being a matter where. Okay, the Q and A sessions are starting to die off. I would
like to make sure and mandate and see that again. But you can't do that without a legal mandated agenda. And I'm
not ready to fght that fght. That's a thing for future generations to deal with and we can fgure out in the meantime.
But investment relations teams, there are good decent processes on the back end to deal with that loss.
Spencer Hurst
Now in the meantime, to answer your question though, these are all the tangents that are relevant to the topic and
question you asked. How do the votes go through?
Konstantin Dubovitskiy
We got back to the question, back to the cornerstone.
Spencer Hurst
Guys, sorry about this big loop.
Konstantin Dubovitskiy
My God.
Spencer Hurst
This is. The intricacies. The, the tragedy of this is there aren't that many good college courses on this people.
Industry knowledge and experience.
Konstantin Dubovitskiy
No, yeah, I can imagine. I can hear it. All right, let's get back on track. Yeah. Let me simplify the question so there
would be a very simple answer. Yeah. To random. I owe one stock of Nike.
Spencer Hurst
Yeah.
Konstantin Dubovitskiy
What is going on? What am I voting for? Let me try to simplify it further so we do that.
Spencer Hurst
Actually, I'm not gonna lie, that was almost a detrimentally tough question because.
Konstantin Dubovitskiy
Yeah.
Spencer Hurst
What are you voting for? Good sir? The universe is the most complicated legal topics right now.
Konstantin Dubovitskiy
But yeah, let's not do that question. You know what, let's do the question of tell us about Mercury vote. It's a very
interesting idea that I do not understand completely. I got us about it.
Spencer Hurst
So what you end up having is this. There is a two part problem. There are thousands of corporate elections that
happen every year. Getting enough infuence. Heck, getting enough votes to reach quorum, much less have
infuence. That's incredibly difcult. That is something that you are paying potentially millions of dollars. Mutual
funds pay millions of dollars each election just to reach what they need to get their votes through. Not. Not even a
contentious one. Just, hey, we want our new slate of directors. No one is competing with us on this. That's the issue
that they're facing. Let's throw on top of this another issue. These are an asset that every retail investor has that I
don't see being used. And more importantly, if you're a billionaire, it's an aggregation issue. I call up, like, let's
presume I am billionaire Spencer Hearst. Your billionaire. Constantine.
Spencer Hurst
Constantine, I need to win this next vote. Would you like to borrow my yacht for two months? That is a. Look you can
buy and sell these voting rights. That has already been done. It was Hewlett v. Hewlett Packard. And, you know, that
is what. Ultimately, it wasn't actually a yacht trade, but during a negotiation, the board members were paid to vote in
a certain manner. And that is something that you are legally allowed to do. Oh, my God.
Konstantin Dubovitskiy
Of course it is. Of course it is.
Spencer Hurst
Welcome to the modern world, my friend.
Konstantin Dubovitskiy
Of course. Who would have thought otherwise? Jesus Christ. All right, gotcha.
Spencer Hurst
So it was an amazing time. Don't forget Citizens United, my friends.
Konstantin Dubovitskiy
Yeah, no, that one is where it all went downhill. We're not gonna touch on Citizens United today. That is not
happening on this podcast at all. Let's get back to it.
Spencer Hurst
Yeah. For the outtakes.
Konstantin Dubovitskiy
So.
Spencer Hurst
So.
Konstantin Dubovitskiy
So I don't want to vote. I have voting rights. Someone can buy them permanently or borrow them for one election.
What are we doing there? What's going on?
Spencer Hurst
So, literally think of it like this. Your stock's a factory. It generates one vote every year. Or correction, every election
that happens in a year, there are special elections. One of the most interesting ones recently that got blown out of
the water was Microsoft wanted to create a bitcoin reserve. And they said, hey, we need to take this to the
shareholders. This is going to be a potentially, like, you know, new area for us. And we want approval if we're going to
allocate potentially billions of dollars. And that giant fnancial decision ended up coming back with a, I think, 99.4%
statement of no by the shareholders. So, you know, they said they did their best, they tried. And I'm certain
somebody at the. One of the board members were like, maybe this is something we should put out there.
Spencer Hurst
And, you know, These shareholders were not for it.
Konstantin Dubovitskiy
Fair enough. Huh.
Spencer Hurst
To your own case here, Constantine. You seem to have a fulflling life, making an awesome podcast, doing many
other things in your life, spending time with friends, family, anything else. I. At the very least, like, the average
American gets seven minutes of political coverage every election cycle. You're not going to have much outside of
that in terms of what is going to be a corporate election.
Konstantin Dubovitskiy
Yeah.
Spencer Hurst
If you truly care. You want to actually march. You want to go and mobilize on the street. We'll help you with that as
well. We do have an activist side where if you want to specifcally push for, like, hey, better union representation, or
alternatively, like, hey, we support this green initiative, or we don't support this green initiative because it's irrelevant
to our type of company. We're not an oil company, or we're not a green tech company. Making any statement on this
is irrelevant to our purpose. Then you can go and try and mobilize your friends, your family, your local social network,
if not larger social network, and actually trying, like, drive investment, drive people who are interested in this. One of
the very unique cases is there's a group called. I think it's literally run by a nunnery, but nuns.
Spencer Hurst
They take their pension, invest in Smith and Wesson, and are trying to divest them from some of their arms
manufacturing.
Konstantin Dubovitskiy
But they're still investing in Smith and Wesson.
Spencer Hurst
They are, but it's for the entire activist purpose of reducing their gun manufacturing. This is insane to me. But, like,
this you can do. It's like, hey, divest from one. Like, you know, one area. One. I remember this as, like, one of the peak
statements. Please do your own research, peoples, if you want to understand them more, if you want to support
them, or if you don't want to. Other rule sets, other things apply. I'm not here to tell you how to.
Konstantin Dubovitskiy
All right, so let's say that I'm against guns, which I am. I don't want to invest in Smith and Wesson. How can I get my
foot in the door?
Spencer Hurst
Well, okay, see, to that end, two different parts you ultimately end up getting to. To have a say. You need to,
unfortunately, be invested, or at the very least, you need to have a fnancial interest in the company. That's just a
similar product where it's like, I don't want some random, like, you know, we. We walked in a tightrope here, which I
deeply care about. You want to see the company taken in a different direction. You're a shareholder of the company.
That's why you partially own it. That's why you get a partial say.
Konstantin Dubovitskiy
Right.
Spencer Hurst
The only thing is I don't want some random Joe Schmo off the wall, like off the sidewalk saying, I have like $10
million. Let me buy up the entire voting rights of this.
Konstantin Dubovitskiy
Yeah.
Spencer Hurst
Beauty company. And now I'm technically for the next four years. Well, and like that would worry me deeply. To that
end, we outsize your ownership. If you are in. Well, if you want to actually be able to assist with this, like, you know,
Nuns Against Guns group. It was given. I believe the Nuns Against Guns was the name given by. I forget which
organization.
Konstantin Dubovitskiy
It wasn't matter the name. Origins. We are not necessary. All right, so. So voting rights.
Spencer Hurst
Repeat that. You have. You have voting rights you want to be able to use.
Konstantin Dubovitskiy
Buying voting rights.
Spencer Hurst
There you go.
Konstantin Dubovitskiy
We use it. From what I'm hearing so far as I cannot just buy voting rights. I have to buy actual stocks.
Spencer Hurst
You still have to have a certain amount of stocks, but if you want to outsize your voting rights, if you want to be able
to shove instead of just push, because it's real here. I am not a billionaire being able to. I am not a random Elon
Musk, a lookalike who can go and just, you know, purchase for your shits and giggles. So to that end, that is
economically prohibitive and there's a huge amount of risk taken on to try and actually push the share price like that.
Open market operations are expensive and risky to that you can end up actually going through us and I own 10 of the
company or I own 5% of the company or you've unionized with 20 other groups of people and you now have 1% of
the company. I'll help you outsize that voting right.
Spencer Hurst
If you want to be able to purchase them and you would simply state, we want this percentage, we're willing to pay
this price. And I'll let you know if you're in the money at the time when it is, when the sale goes through.
Konstantin Dubovitskiy
Okay, so let's say that I myself have 5% of the shares of a certain company. I want to be able to have, let's say, 10%
worth of share voting. I don't know if I'm saying it correctly. I'm defnitely not using correct terminology, but who
cares what happens next? So I want that extra 5% that I don't have right now. I do not have the money to buy actual
stocks. Like another 5% worth of stocks.
Spencer Hurst
If it's an uncontested election. Congratulations. That might be three basis points. You're paying a small premium to
get this where it's like that means you're paying, take the price of the stock. If it's a hundred dollars, you're multiply
that by 0 point oh 3%. Okay, so easy enough. What you're ending up paying is a signifcant reduction. 3 bips. My main
reason here is you now are able to like purchase what is another 5% of the company or at the very least the voting
interest of the company. At what would be $0.03 on $100.
Konstantin Dubovitskiy
Yep.
Spencer Hurst
By $0.03.
Konstantin Dubovitskiy
Buy.
Spencer Hurst
You know, give me a second. If we're saying so who am I buying it from?
Konstantin Dubovitskiy
Who's selling it to me? How am I buying just the voting rights?
Spencer Hurst
That's as simple as it comes. You are another shareholder in this company. The answer is the retail shareholders
who are not interested in, you know, they're, you know, in voting in their voting rights. This is now a dividend for them.
They are able to now make a return because you're interested in purchasing the voting rights.
Konstantin Dubovitskiy
Do they have to be registered on the platform for that to happen or are you practically reaching out to them? Are you
calling people or emailing people? What's going on there now that it.
Spencer Hurst
Gets into our go to market and our business strategy Right now we want to go and work with the transfer agencies
frst. This is the groups who actually like there are still some people who own instead of in street name, in their
personal name, these actual shares. Easiest and best frst group to work with and to talk to. Throw on top of that a
second group which is I want to partner with the brokerages. I want this to be as simple as a one click solution.
Konstantin Dubovitskiy
But okay, yeah, in that situation what is stopping nuns against guns who own I would imagine 0.1% of Smith and
Wesson with their pension funds. What stops them from going out and buying up as many voting rights as they need
to get like something.
Spencer Hurst
Over, push it over, win the vote or just force management to make a concession. Yeah, I get you entirely there. The
answer there is two parts. If you are the board, you're now looking at that as what the heck is going on here? No, no,
no. You're able to compete because it's a V auction.
Konstantin Dubovitskiy
Okay.
Spencer Hurst
Put in a competing price bid to be able to prevent what would be a, we'll see a, a theocratic takeover of your arms
company rather than, you know, start a tour of the company.
Konstantin Dubovitskiy
Yep. Okay. That is very interesting. That is very interesting. We have another fve minutes.
Spencer Hurst
So I would have to tell the. The story of all the. The actual overarching, you know, how these votes go through. I'm
happy to give you more background on the.
Konstantin Dubovitskiy
Yeah, no, we're not doing that. We have fve minutes. Only fve minutes. I want to dig a little bit deeper into Mercury
Vote specifcally.
Spencer Hurst
Sure thing.
Konstantin Dubovitskiy
And how I feel like it should be at the top of the list for activist groups, for unions within those companies
themselves. What is stopping me from, say, reaching out to a bunch of people within the organization and saying,
like, hey, here's what we want. We are union, we work here. We want great things for the company, but we want to
distribute the. The wealth, you know? Yeah. What is stopping me from going out after a bunch of people and saying,
like, hey, vote this way. But if you don't want to vote, I know you don't give a. You just here for the money. I'm willing to
pay you fve cents.
Spencer Hurst
Yeah, right now, the vote this way, the way that people do it right now is literally I, the company or I, the activist or I,
the union will literally pay A proxy solicitor $7 a call to go and reach out to. $7 a call. Holy shit. Yeah, holy. It's done in
America too. So, you know, I'm here to support American companies, American people doing call centers, but, like,
not at the most efcient, I'll say, you know, use of people in their time, especially in this market. So, yeah, you are
literally paying tons of money. And the alternative to me is you, the shareholder, in a lot of ways are losing out.
Konstantin Dubovitskiy
And you're paying those callers to call people and explain why they should vote a certain way. Correct.
Spencer Hurst
Let's be real here. Are you going to vote because somebody called you to vote? Because I, I remember many. I, I see
a lot of local elections be texted to me by, you know, I'm not donating, nor am I giving my time right now because I'm
busy with my startup. You're busy with your life. No. It's a matter of time and caring and voter efcacy.
Konstantin Dubovitskiy
All right, so the calls, however, are placed for that matter. Right. So what you're suggesting is changing from that to
saying, hey, you can get paid to give your vote.
Spencer Hurst
It's guaranteed votes and guaranteed payment. And it's as easy as correct. It is a matter of giving you certainty there
are votes on.
Konstantin Dubovitskiy
The only other counterbalance is the company itself or the management of the company. Seeing that something
weird is going on, noticing it, realizing what's happening frst they.
Spencer Hurst
They are the ones who care the most about just being able to reach quorum. Historically, they literally, their entire
business model is let's just use a proxy solicitor and call and get our votes through. And right now we're helping at
least with the proxy solicitor side too, where we're trying to help assist them. Where it's like, no, no, we'll get it done
the frst time rather than you needing to adjourn three times.
Konstantin Dubovitskiy
Gotcha. And again, back to this. Okay, I understand that the main goal. I just got excited about the idea of regular
people being able to do something about it.
Spencer Hurst
I want. Hear me out. I'm happy to have a, you know, a, A dream would be to have the unions be able to walk in and be
able to have a good conversation with management, be able to genuinely make a better workplace environment for
themselves. I'd be more than ecstatic about that. It's just a matter of making sure that reality is able to be pushed
forward in a, you know, economically responsible manner.
Konstantin Dubovitskiy
Yep, yep. Very interesting subject, but we don't have enough time to dwell into that. Let's do the rep question that I
asked everyone since we do have two minutes. If there were one thing that you can teach the entire world about the
fnancial industry, like you get teleported into people's heads. Seven billion people just hear your voice saying, hey,
this is Spencer from Mercury Vote. Here's what you need to learn about real time payments or FedNow or voting
rights. What would that one thing be that you'll teach them about?
Spencer Hurst
And you're telling me I can't just say, you know.
Konstantin Dubovitskiy
No, no, no. You're not speaking.
Spencer Hurst
Okay, fne.
Konstantin Dubovitskiy
You're actually teaching them. It just, it gets deposited into their minds. That's. It can get too creative there. It's just,
it's got to be some useful knowledge.
Spencer Hurst
This is a genuine one. I do like I'm going to break with the mold. I guarantee you study your local tax policy. It is just
the matter of this is the incentive system of your modern life in modern day. The entire way that the fnancial system
runs is based off of an efcient game that people play with their taxes. So if you can create a good, efcient tax
system that enables people to, you know, both thrive and succeed and incentivizes that thriving and succeeding, that
is like, you know, the cornerstone of it. If it's an inefcient subsidy, then look at the subsidy. If it's an inefciency, you
know, well, if it's A tax on what is the poorest among us instead of, you know, all of us that should be ideally seen as
if not immoral, that at least inefcient. Help your fellow man.
Konstantin Dubovitskiy
That's a great takeaway. I do like it. All right, so the. The. The bottom line here is learn about your local taxes.
Because, I mean, honestly, local elections, local taxes sounds so unimportant, but they are the ones that make the
difference.
Spencer Hurst
They're the ones that help your local community the most.
Konstantin Dubovitskiy
Yes. And by the way, you are wrong in that we're not voting. I can't vote. My wife, however, very much does.
Spencer Hurst
So young people, go and make sure. Vote your heart. Go and vote for your next upcoming election. I also canvassed
for a little bit too. So like, hey, don't get me wrong here. Always, you know, do what you can. We live in a democracy
for a reason.
Konstantin Dubovitskiy
Correct? Correct. So far. So far, Jokes. Hopefully just jokes. All right, we are over time. This is ofcial. Our longest
episode for a good reason covered a bunch here. My call to action. My thing that I want to teach you is check out the
description of the episode. I'm going to include a bunch of stuff there. Also, go to our website, AFT Finance if you
want to see the transcript. And potentially Spencer might share some infographics on the movement of funds,
settlement processes, how DTC is factored into all that. If you're a visual creature, take a look at that. There is a
slight chance that we'll put it into substack. Unlikely. Truthfully, way too much work. Way too out of line of payment
space, but very interesting. So thank you, Spencer. We're gonna wrap it up here. Thank you. Everyone.
Konstantin Dubovitskiy
Take a look at the episode description and of course, subscribe like to your thing and we'll see you soon enough.
Spencer Hurst
Thank you.
Konstantin Dubovitskiy
Okay, that was beautiful.
Spencer Hurst
Rambled too much there. Feel free to cut me where you need to. Absolutely. Like, just don't completely recut me into
saying Spencer is a fool or anything like that outside.