SINGAPORE (Feb 16): The Singapore Exchange (SGX) has launched a public consultation on whether it should introduce dual class share (DCS) structure where certain shares have higher voting rights than others.

The consultation will be open for two months.   

In an aftermarket announcement on Thursday, the bourse details that its consultation is also seeking feedback on possible safeguards, such as an admission criteria over and above current Mainboard perquisites; prohibiting the issuance of multiple vote (MV) shares by a company that is already listed; and subjecting the appointment of independent directors to a vote where both MV shares and one-vote (OV) shares are treated equally, among others.

Through DCS structures, entrepreneurs and companies can increase their flexibility in capital management and provide greater investor choice while supporting Singapore’s economic transformation, says SGX.  

SGX adds that Singapore’s Committee on the Future Economy – which last week released a report detailing its recommendations for Singapore’s future – has also suggested “exploring the merits of the DCS structures, as DCS listings are increasingly being considered by companies in high-technology industries”.

If DCS companies are to be listed, their securities will be clearly identified for investors, while investor education activities will be organised.

According to the bourse, they will also be required to prominently disclose risks of the structure in their IPO prospectuses, in addition to making known all holders of MV shares at the point of listing and in every annual report.

“A DCS structure could enable entrepreneurs to swiftly accelerate business expansion while continuing to lead the strategies and growth of their company. SGX must keep innovating as a fundraising platform and feedback from our stakeholders will be crucial in helping to construct a DCS offering which is in the interest of investors and attractive,” says Loh Boon Chye, CEO of SGX.

“We welcome views on whether DCS should be implemented as well as possible safeguards for risks many see as specific to DCS,” he adds.

Shares of SGX closed 0.5% higher at $7.63 on Thursday.