SGX Issues Consultation Paper For A Possible Listing Framework For Dual Class Share Structures

 On 16 February 2017, the Singapore Exchange Securities Trading Limited ("SGX") released a consultation paper seeking responses to a possible admission criteria for companies with a dual class share ("DCS") structure. Under a DCS structure, certain shareholders have voting power disproportionate to their shareholding. Shares in one class carry one vote each ("OV Shares"), while shares in another class carry multiple votes ("MV Shares").

The permissibility of DCS structures is a matter of considerable public debate. On one hand, there is the risk that shares with multiple votes can be used to severely undermine minority interests. On the other hand, it is recognised that DCS structures may be utilised by entrepreneurs and companies to increase flexibility in capital management, and to provide greater investor choice while supporting Singapore's economic transformation. The Committee on the Future Economy (CFE) recommended exploring the merits of the DCS structures