Dual-class Shares Structure in the Premium Tier in the UK - Arguments in Favour and Applicable Conditions

Abstract

After a long wait, the UK’s Listing Rules were relaxed in December 2021, following Jonathan Hill’s Listing Review. The so-called ‘specified weighted voting rights shares’ were enshrined into the Listing Rules along with certain conditions and requirements that attempt to create a balance between maintaining corporate governance standards and modernising the premium tier’s legal framework. However, by issuing the Consultation Paper CP 23/10 in May 2023, the Financial Conduct Authority is proposing a new reform to the UK’s Listing Rules, which seeks, inter alia, to introduce a more permissive dual-class share structure in the UK’s premium listing segment. This paper explores some arguments in favour of permitting dual-class shares in the premium tier in the UK and critically assesses the conditions applicable to this capital structure under the UK’s Listing Rules and the new proposal by the FCA.