Proposed policy for getting the incorporation bill to work

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Diderot Mirabeau
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Proposed policy for getting the incorporation bill to work

Post by Diderot Mirabeau »

This is just a slightly hurried attempt to establish some sort of framework policy for where we might want to go to promote commercial activities in CDS.

As mentioned in the manifesto it is the belief of the Simplicity Party that the role of government in relation to commercial enterprise is one of establishing and facilitating an architecture of trust. The simplicity concept takes on a slightly different meaning in this case since it becomes more a question of establishing simple interfaces to frameworks that of their nature necessarily must be somewhat more complex than what the average citizen needs to deal with.

We want to make it possible to establish businesses according to more sophisticated business models than the "one man with a club, an IM group and some cash to spare on casual jobs." We want to build upon our established infrastructure to facilitate transactions between companies where the companies can rest assured that we have the institutions available to eliminate random, unnecessary risk.

At the moment we have an act to allow for the registration and incorporation of companies in Neufreistadt. However, it has failed to generate much interest beyond the handful of companies, who have desired to incorporate here. It is the belief of the Simplicity Party that it is not the act in itself that is at fault in this but rather the implementation of the institutions mentioned in the act that leaves something to be desired.

The Simplicity Party therefore proposes the following initiatives to breathe new life into our incorporation act:

1) Establish a communication plan on how to promote the message that CDS provides institutions to allow for more sophisticated business transactions to take place without unnecessary risk.

2) Establish a pilot project strategy where selected business partners are invited to test run the institutions for contractual arrangements that they need to carry out.

3) Develop a sophisticated funds management strategy for the CDS reserves held by the Treasury taking into account the possibility of facilitating a banking industry in the CDS.

4) Develop a roadmap for the establishment of a "Federal Reserve" or "National Bank" function under the auspices of the Treasury.

5) Develop a system to automate the management of company registration, incorporation, deposit of escrows and publication of outstanding liabilities as notarised.

6) Appoint a civil servant to be in charge for the execution of this strategy.

For further details about the proposed roadmap for the development of a "National Bank" take a look at this, which is basically a quote from an old post in the original Neualtenburg forum on secondlife.com:

[quote:3dx1gp9u]This is a draft for a roadmap on how we can approach the evolvement of a financial sector in Neualtenburg:

1) Incorporation bill approved

2) Neualtenburger Bank established - mandate: hold city reserves and accept escrow deposits

3) Companies begin to incorporate and deposit escrow sums

4) City gets experience with rate of attrition on deposits + City builds reserve accounts

5) Guidelines are drawn up for the certification and financial reporting of "Class A" organisations to which the Neualtenburger Bank can lend money

6) Neualtenburger Bank is allowed to "invest" (i.e. lend) risk-willing part of city reserves to a very limited "Class A" group of licensed organisations (certified investors / money-lenders presumably)

7) City gets experience with rate of return on Neualtenburger Bank investements + ratio of defaults

8) Escrow deposit sums continue to grow + City begins to get revenue from transaction fees

9) Neualtenburger Bank is allowed to "invest" risk-willing parts of city reserves to yet another class of borrowers: "Class B" (big companies, individuals with business plans) and may "invest" portion of escrow deposits to Class A organisations

10) City builds further experience with rate of return on investments

11) Neualtenburger Bank fine-tunes reserve policy to possibly invest further amounts in Class A and B organisations

12) City builds further experience with rate of return on investments

13) Escrow deposit sums continue to grow

14) Private citizens are allowed to buy bonds in Neualtenburg / Neualtenburger Bank as a "guaranteed" form of savings for individuals

15) A portion of funds from citizens purchase of Neualtenburger Bonds are invested in "Class A" organisations

16) City builds further experience with rate of return and credit ranking of individual Class A organisations

17) Guidelines are developed for the oversight and financial reporting of Class A+ organisations

18) Certain Class A organisations are promoted to Class A+ meaning that they are allowed to accept savings from individuals and re-invest them without the intermediary role of the Neualtenburger bank

I think we owe it to the various parties interested in running banking operations from Neualtenburg to provide some clarity and a vision to the direction that Neualtenburg financial policy is going to take. The above is a first step in trying to provide such a "road map" and can hopefully serve as a base on which to discuss and draft further Neualtenburger Bank legislation and policy.

As you can see from the above I do not envision licensing private banks to be allowed to take investments from private individuals for the foreseeable future. This is something of which the interested parties should take notice and that we will need to discuss in the RA. The timeframe for the above roadmap to reach completion is likely to lie in the 6 - 9 months range but this is all very dependent on the development of our reserves and escrow deposits.

Furthermore, I think it would be reasonable to discuss in the RA a policy on the future permissibility of unlicensed banking operations in Neualtenburg - especially those catering to individuals and citizens. I think that since Ginko has been around for so long and since Neualtenburg is seemingly their most voluminous cash point we owe it to them to at least have a debate on the issue before just shutting them down. Who knows the owner might even wish to be represented at the RA meeting, which would enable us to have a productive discussion with him on the possibility of him drawing up plans to become a licensed banking operation in Neualtenburg in the future.[/quote:3dx1gp9u]
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