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CII petitions exchanges over dual-class shares

Joe Mont | October 29, 2018

The Council of Institutional Investors, which represents pension funds and other long-term investors, has filed petitions with the New York Stock Exchange and Nasdaq asking them to limit listings of companies with dual-class share structures.

Specifically, the petitions ask the exchanges to amend their listing standards to require that, going forward, companies seeking to list that have multiple share classes with differential voting rights include in their governing documents provisions that convert the share structure within seven years of the initial public offering to “one, share-one, vote.” The group says this will ensure voting power directly proportional to an investor’s capital at risk.

Dual class voting typically involves capitalization structures that contain two or more classes of shares—one of which has significantly more voting power than the other.

The...

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