SEC’s Jackson Urges Exchanges to Consider Sunsets for Dual-Class CompaniesIn a February 15 speech in California, SEC Commissioner Robert Jackson Jr. urged U.S. stock exchanges to consider changing their standards to require listed companies with dual-class structures to sunset those structures. “I hope that our national securities exchanges will soon consider proposed listing standards addressing the use of perpetual dual-class stock,” Jackson said in the prepared text of his remarks. In the speech, he likened dual-class shares that do not sunset to “corporate royalty” and said such structures were “antithetical to our values as Americans.” He added: “If you run a public company in America, you’re supposed to be held accountable for your work—maybe not today, maybe not tomorrow, but someday.”
MSCI Proposes Reducing Index Users’ Exposure to Dual-Class CompaniesIndex provider MSCI on January 31 released an expanded consultation and accompanying discussion paper proposing to adjust multi-class MSCI equity index constituents based on free float and voting power. MSCI estimates that if the proposal were adopted, 12 companies with zero voting power in the hands of public investors would be excluded from its equity indexes, 209 dual-class constituents would see their index market cap reduced and another 32 would see no impact. The changes could take effect for new constituents as early as November of this year, and as early as November 2021 for existing constituents.
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