SGX opens listing to firms with dual class shares

It set rules on voting rights for shareholders regardless of class.

Singapore Exchange (SGX) opened listing to companies with dual class shares (DCS) structures.

According to an announcement, it set rules that followed consultations on specific risks associated with DCS.

It required an enhanced voting process where all shares carry one vote each regardless of class, for the appointment and removal of independent directors and/or auditors, variation of rights attached to any class of shares, a reverse takeover, winding-up or delisting.

It also required the majority of the audit committee, the nominating committee and the remuneration committee, and each of their respective chairman, to be independent directors.

DCS companies that wish to list have to cap each multiple voting (MV) share at 10 votes a share and limiting the holders of MV shares to named individuals, or permitted holder groups whose scope must be specified at IPO.

They also need to have sunset clauses where MV shares will auto-convert to ordinary voting (OV) shares under circumstances the company must stipulate at the time of the IPO.

“SGX today joins global exchanges in Canada, Europe and the US where companies led by founder-entrepreneurs who require funding for a rapid ramp-up of the business while retaining the ability to execute on a long-term strategy, are able to list. Investors who understand and agree with the business model and management of DCS companies will also have more choice,” said SGX CEO Loh Boon Chye.

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