SGX sets rules to allow dual-class share listings

SGX introduced rules on Tuesday to allow companies to list under a controversial dual-class share structure in Singapore.

“SGX today joins global exchanges in Canada, Europe and the U.S. 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,” Loh Boon Chye, CEO of SGX, said in a statement on Tuesday after the market close. “Investors who understand and agree with the business model and management of DCS companies will also have more choice,” he said.

The share structure, which gives some shares more voting heft than others, has been controversial because it makes it harder to hold management accountable for its governance; minority holders also may find it more difficult to make their voices heard.

SGX said its rules for the structure would include requiring one vote per share, regardless of class, for some key decisions, such as appointing and removing independent directors and/or auditors, reverse takeovers and delistings.

It would also require most of the audit, nominating and renumeration committees, and their chairmen, to be independent directors, it said.

Multiple voting shares would be capped at 10 votes each and their holders would be limited to named individuals or permitted holder groups as specified at the IPO, it said.

Sunset clauses for multiple-voting shares to auto-convert to ordinary shares would be required, with the circumstances for the conversion stipulated at the time of the IPO, it said.