UK Financial Authorities Propose Expanded Application of Dual-Class Voting Rights at London Stock Exchange

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] The UK's Financial Conduct Authority (FCA) has proposed allowing dual-class voting rights for founder-led innovative listed companies on the London Stock Exchange (LSE) 'Premium' market for an initial period of five years, according to major foreign media reports on the 5th (local time).

The London Stock Exchange is divided into three types of markets: 'Premium,' 'Standard,' and 'High Growth.' Among these, companies listed on the Standard market that meet the requirements are already permitted dual-class voting rights.

The FCA's proposal is interpreted as an effort to strengthen the competitiveness of the London stock market following Brexit (the UK's withdrawal from the EU). Foreign media note that dual-class voting rights are widely prevalent in the US New York Stock Exchange and major EU stock markets such as Amsterdam.

In this proposal, the FCA also suggested lowering the mandatory free float ratio from the current 25% to 10%.

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