Hard to escape governance risks of dual-class shares

IF the Singapore Exchange (SGX) wants to have dual-class shares, it will have to avoid some of the missteps by its rival in Hong Kong, but may ultimately still have to accept higher levels of governance risk in the marketplace.

The independent Listings Advisory Committee (LAC) has produced a set of safeguards that it believes will be sufficient to address the key concerns about dual-class shares, giving SGX a blueprint to follow should the market operator decide to allow listings with dual-class structures.

LAC's recommendations encouragingly try to avoid some of the flaws that led Hong Kong regulators to pull the plug on Hong Kong Exchanges and Clearing's (HKEX) proposals in 2015.