Reforming UK Listings: An Assessment Of Dual- Class Share Structures And LSE Competitiveness
- IJLLR Journal
- Jul 29
- 1 min read
Neeti Mujalda, University of Bristol
ABSTRACT
This paper examines the Financial Conduct Authority's (FCA) reforms to the London Stock Exchange's (LSE) listing rules, specifically concerning dual class share structures. Initially introduced in December 2021 as the Specified Weighted Voting Right Shares (SWVRS) structure, these reforms aimed to enhance the LSE's global competitiveness by allowing founders to retain control post-IPO while balancing investor protection. However, the initial SWVRS framework, characterised by restrictive conditions such as limited enhanced voting rights and a five-year sunset clause, proved largely ineffective in attracting high-growth companies.
Drawing upon Bobby Reddy's critical assessment in "The UK and dual-class stock-lite – Is it really even better than the real thing?" (2024), this essay argues that the 2021 reforms failed to adequately balance founder flexibility with investor safeguards, thus hindering the LSE's appeal. It further analyses the FCA's subsequent amendments in 2024, which significantly liberalise the dual-class share provisions by unifying listing segments, removing the sunset clause for natural persons, and broadening the scope of enhanced voting rights. While these recent changes represent a more permissive approach and acknowledge past missteps, the paper concludes by assessing whether they truly strike the necessary balance to foster growth and innovation on the LSE while maintaining robust investor protection in a globally competitive market.
