In Focus

Singapore Stock Exchange Moves to Permit Dual Class Listings

The Singapore Stock Exchange (SGX) indicated on January 19 that it will permit primary listings of weighted voting shares, as global stock exchanges continue to retreat from the one-share/one-vote principle. The Hong Kong Exchange’s recent proposal to permit dual class listings, itself prompted by NYSE’s listing of Alibaba, appears to have pushed SGX, although critics said the SGX move would prove harmful to markets and the SGX itself. The Singapore exchange launched a consultation on dual class share structures in February 2017, but did not appear to be moving forward until this month. CII commented in opposition to the change, notwithstanding suggested safeguards that are missing from NYSE and Nasdaq rules that are driving the race to the bottom on this issue.

CII Asks SEC—Again—to Tighten Rules on 10b5-1 Trading Plans

Amid questions about the timing of recent trades at Intel, CII wrote to the SEC to reiterate a long-standing request for reform of Rule 10b5-1 plans to reduce activity that undermines their intended purpose. Among the changes CII seeks: setting parameters on when companies may adopt 10b5-1 plans; barring overlapping plans; establishing a three-month delay between plan adoption and initial participation; disallowing frequent plan modifications or cancellations; requiring greater transparency; and getting boards more actively involved in the oversight of such plans.

Most U.S. IPOs Continue to be One Share, One Vote 

CII analysis of 124 IPOs on U.S. exchanges in 2017 finds that 101 (81%) provided equal voting rights.  However, the two largest companies to IPO as measured by market cap were dual class.  While Snap, Altice USA and Blue Apron pushed the envelope with authority for non-voting shares, no companies went public with non-voting share classes in the second half of the year, after strong reaction against Snap.  Six companies that IPO’d in 2017 with unequal voting rights put in place time-based sunset provisions on those structures.

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CII Priorities

Fair Financial RulesSensible, effective rules safeguard investors and strengthen markets.

Dual-Class StockEach share of a public company's common stock should have one vote.

Majority Voting for DirectorsIn uncontested elections, directors should be elected by majority vote.

Universal ProxyIn contests, investors should be free to vote for the nominees they prefer.

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