World Stock Exchange

The World Stock Exchange (WSE), is a fictional securities exchange and banking role-playing game developed, owned and operated by Hope Capital Pty. Ltd. of Melbourne, Australia. The WSE has been developed using Ruby on Rails. The WSE enables listed companies to raise capital and gain brand awareness by participating in the game while providing users with an ability to trade securities and earn interest in a simulated gaming environment using a fictional currency with a license issued by the fictional currency provider that has the potential to be purchased and sold for real US Dollars. The value of the license is determined by an exchange rate set by the provider, the rate is then applied to the total amount of fictional currency assigned to that license at the time of the transaction.

The World Stock Exchange began normal operations on March 7th 2007 and to date has achieved 27,000 user accounts, raised virtual businesses over L$145 million Linden Dollars and total Exchange Turnover exceeded WIC$500 million.[citation needed]

The WSE first appeared in the virtual world of Second Life and initially used the Linden Dollar currency in Second Life. In July 2007, the WSE completed the integration of a new fictional currency independent of Second Life called the World Internet Currency (WIC, WICS, W$). In February 2009, the World Stock Exchange ceased using the World Internet Currency operated by WIC Exchange due to a reversal of the acquisition to purchase WIC Exchange by Hope Capital.
Contents
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* 1 Halting of operations
* 2 Regulation of listed companies
* 3 Development of the WSE Platform
* 4 References
* 5 External links

Halting of operations

The WSE suddenly, and without warning, suspended operations on January 4, 2008, and reopened on August 3, 2008, after telling clients that the exchange would be down for less than a few weeks, for an upgrade. After over six months of being shut down the exchange reopened with its new platform called WSE 4.0. On February 15th 2009, the WSE issued an announcement that it will be closed for further upgrades to the platform until the 6th April 2009. The WSE failed to open as the upgrade date was extended to the 30th June 2009. On the 29th June this date was again extended to the 13th July 2009. Due to continued delays with the development of the application, World Stock Exchange remains closed and the launch date has been extended to 10th August 2009.

Following the delisting of 4 companies in a single day[1][2][3][4], the WSE halted trading on November 9, 2008, pending an announcement.[5] According to the November 30, 2008 announcement, the WSE will delist any remaining Second Life-based companies, and will not reopen until late January, 2009.[6]

Regulation of listed companies

Self-regulation

Initially, the WSE was regulated by listing rules and the WSE Constitution. At the start of 2007, the WSE believed in market self-regulation.[citation needed]

Because of that, the WSE companies listed on the WSE had a relatively high failure rate and most participants were day traders, resulting in very high trading volume and a bubble when virtual stock traders saw their stock decline in value en masse for the first time.[citation needed]

Increased regulation

Because of the failure rate and the desire to operate a more serious market, the WSE's CEO, Luke Connell, decided to tighten the regulation. The WSE introduced guidelines for companies to inform investors and the WSE also heavily edited the - already existing - WSE Constitution, and added a Terms of Service. From June 2007 on, it has also increasingly done at-random and monthly checks on companies to ensure compliance.[citation needed]

The actions taken by the WSE dramatically reduced the failure rate.

Upon resuming its services to users on the 3rd of August 2008, WSE had updated the Listing rules and Terms of Service and replaced the Constitution with detailed Market Rules. However, most delistings that occurred after this date still refer to the WSE Constitution as the reason for delisting[7].

Criticism Gag Clause

The WSE includes a controversial clause in its Market Rules, which effectively bans any criticism to the service[8]. The clause is found under the "Announcements" section:

Announcements that can be perceived as negative towards the WSE are not permitted as they could have a negative impact on market sentiment and result in lower prices, poor investor confidence and less liquidity. The World Stock Exchange may edit spelling and grammatical errors or remove any content which is has deemed a breach of the WSE Game Rules or Terms of Service. Advertisements and content related to third party fictional stock exchange and banking services are not permitted.

Development of the WSE Platform

Initial platform(WSE 1.0)

The WSE initially used a stock trading system operating within Second Life, but that system was discontinued because of the limits of the Linden Scripting Language(LSL), the scripting language used within Second Life.

Second trading platform: A web-based trading platform(WSE 2.x)

In March 2007, the WSE, in cooperation with an existing stock exchange in SL, the Metaverse Stock Exchange(MSE) - which was merged into the WSE - developed a completely new, primarily web-based trading platform, called WSE 2.0. WSE 2.0 introduced better portfolio management features and more options for listed companies. The developer of WSE 2.0, Second Life Solutions CEO Shaun Altman, a Second Life avatar, has been criticized because of the errors in essential parts of the WSE 2.0 system, which was, like all WSE platforms after WSE 1.0, based on the Ruby on Rails web application framework. Because of WSE 2.0, Hope Capital decided to hire a real-world software developers to develop the WSE applications instead of a Second Life avatar reduce their risk exposure to errors and to increase the quality of the platform. It took a time to remove inefficiencies and bugs of WSE 2.0, but, after the fixing of bugs, WSE 2.0 was regarded as the first stable virtual stock exchange platform to be used by users in the virtual world of Second Life.[citation needed]

Final 2.x

The final WSE Trading Platform, version 2, included automatic charting by using Adobe Systems technology. It is still being used as of the start of December 2007 as the WSE's charting system.

The 3.x family of trading platforms: More security, a new currency

The WSE 3.x trading platform family introduced features developed by a real-world Australian software firm and included security enhancements, a new currency, new data for investors and better market data management.

WSE 3.0

WSE 3.0, which was implemented after a Second Life avatar had stolen L$3.2 million from the WSE. Version 3.0 of the WSE trading platform included 256-bit SSL-encryption, bug fixes and an RSS-powered news feed. The WSE 3.0 platform also introduced a new currency: The World Internet Currency, commonly shortened as the "WIC".

WSE 3.1

WSE 3.1 included better data management features to enable better management of the WSE's financial and regulational operations and bug fixes. This version of the World Stock Exchange platform also included the introduction of financial reports.

WSE 3.2: The current version of the WSE's platform

The third 3.x family member, WSE 3.2, included live TV via the WSE website and additional news feeds on the WSE's homepage at its website. Several bugs were also fixed. The website's layout was also slightly changed.

WSE 4.0: First Phase/Second Phase(Currently implemented into WSE 3.2)

The first phase of WSE 4.0 includes extended data, such as P/E and cash-on-hand data. It also includes an integrated application for analysts. Analysts can post their analysis of listings on the WSE website via this system.

WSE 4.0 was successfully re-launched on the 3rd of August, 2008. A new application on the Facebook Platform was added, opening up the WSE service to a new market within Facebook, similar to operations in Second Life. The main WSE website was also relaunched.

New features include an invitation system where users are paid for successful invites, meaning that the people they invite trade virtual securities on the WSE. Advanced orders, like stop and trailing orders, were also introduced. The Facebook Application includes a ranking system.