ASX Considers Dual-Class Shares To Revive Listings Market

The Australian Securities Exchange (ASX) is exploring the possibility of allowing dual-class shares for the first time, aiming to enhance the nation’s underperforming listings market, according to Blair Beaton, the ASX’s group executive of listings.

Currently, dual-class share structures are not permitted in Australia, putting the domestic market at a competitive disadvantage compared to major global exchanges. These structures typically involve two or more classes of shares that carry different voting rights, with some investors raising concerns that they may erode shareholder influence. However, regulators have advocated for expanding the use of dual-class shares in order to attract more listings.

Dual-class shares are widely used in markets such as the United States, and the United Kingdom’s Financial Conduct Authority (FCA) recently introduced reforms to facilitate the listing of such share classes.

“The ASX is the only major exchange that does not allow dual-class shares, and opinions on the issue are divided,” Beaton told Reuters in an interview on Wednesday. “While some investors may oppose it, others argue that if an Australian company can’t offer this structure here, it might choose to list abroad, and if it’s a strong company, investors will still buy shares on other exchanges.”

Beaton emphasized the ASX’s goal of becoming the most attractive listing venue in the region, one that can compete globally. He suggested that now is the right time to begin a conversation about dual-class shares.

In 2024, media giant News Corp successfully defended its dual-class share structure against an activist investor’s attempt to have it dismantled. The ASX first considered introducing dual-class shares in 2007 but abandoned the idea following opposition from investors.

Since then, Beaton noted, the Australian equity market has matured, and it may be time to revisit the concept in collaboration with market participants. The ASX and the Australian Securities and Investments Commission (ASIC) are under growing pressure to implement regulatory changes that could revitalize the country’s struggling listing volumes.

Data from London Stock Exchange Group (LSEG) reveals that initial public offerings (IPOs) in Australia raised just $2 billion in 2024, with $1.3 billion of that amount generated by a single company, data centre trust Digico.

This year, only listed investment trusts have debuted on the ASX, each raising A$300 million, with total IPO proceeds for 2024—excluding Digico’s contribution—hitting a near-decade low.

In response to these challenges, ASIC urged the ASX last month to streamline its IPO approvals process to make it easier for companies to list.