The Financial Conduct Authority released new proposals regarding listed companies that employ dual-class share structures (DCSS) for purposes such as employee share schemes. While these proposals don’t impact SMEs (or any company with less than £30 million in turnover), they set the legal and regulatory stage for perceptions of control. Among the new proposals for companies with DCSS premium listing requirements:

• Raising the ownership threshold for significant transactions that require shareholder approval to 33%, from its current 25%;
• Limiting the use of dual-class share structures based on weighted voting ratios of no more than 20 to 1;
• Setting restrictions on who may hold premium shares, both regarding when such shares are available, and to whom, other than founding directors, the shares may be issued;
• A reduction in the required level of free float for companies adding premium stock schemes to 10% of turnover; and
• An increase in the minimum market capitalisation required for listing on the main market to £50 million—ostensibly to increase investor trust and reduce perceived smaller-company risks.

FCA released the proposals last month, but Clare Cole, director of market oversight, presented an outline of their intent.