The London Stock
Exchange’s (LSE’s) approach to dual-class shares has meandered over the
decades. Dual-class shares give privileged insiders the facility to hold voting
rights that are disproportionately high compared to their economic ownership
interests in the company. At one time, the exchange welcomed dual-class shares
with open arms, before first informally prohibiting them, then explicitly
proscribing the structure from the premium tier, the most prestigious segment
of the exchange. More recently, in the shadow of what some have described as a
failing stock market, the UK regulator’s attitude to dual-class shares has
softened. A tentative 2021 relaxation to permit what this paper describes as
‘dual-class shares lite’ gave way to 2024 reforms that foster the admission of
genuine dual-class shares companies, described herein as ‘dual-class shares
full fat’. This article outlines the most recent set of UK reforms on
dual-class shares, critically evaluating the conditions attached to the listing
of such firms. It finds that, overall, the 2024 reforms rectify the flaws of
the 2021 modifications, and will be more attractive to founders of innovative,
high-growth companies. However, a concomitant relaxation of related-party
transaction regulations that has also taken place could portend a dual-class
shares storm around the corner.