On The Construction Of The Dual Share Class System In China

The dual class share structure,is considered to be a means of effective control over the company by separating cash flow rights from voting rights.Compared with the system such as preferred stock system,The dual class share structure has considerable advantages in solving the contradiction between dilution of ownership and maintenance of control rights in the financing process.In addition,the value of The dual class share structure is also reflected in the long-term development of the company,Improveing corporate governance efficiency,preventing hostile takeover and so on.Although The dual class share structure has many advantages,it is still in great dispute for its malpractice and different countries(regions)have different attitudes towards it.Though American dual-class equity is the most developed in the world,its development is not going smoothly.it has long been questioned and opposed,but the competition between exchanges propels the implementation of the system.In recent years,due to the pursuit of "new economy" and "unicorn" in various countries and regions,the attitude towards The dual class share structure is gradually loosening.For example,the new listing rules of the Hong Kong Stock Exchange allow the same share with different rights,and the new listing rules came into effect on April 30.And the Hong Kong Stock Exchange formally accept the listing application of enterprises with the dual class share structure.On the evening of January 30,2019,the China Securities Regulatory Commission(CSRC)announced ? its views on the implementation of a Science and technology innovation board and a pilot registration system on the Shanghai Stock Exchange?As a bright spot of the listing rules of Science and technology innovation board,Dual-class share structure,has finally come into being.Although the legal application foundation of the Dual-class share structure needs to be perfected,.however,,its introduction has an extraordinary practical significance,which is not only beneficial to the development of the emerging industrial enterprises in China,but also to reduce the loss of high-quality listed resources.Under the background that the new economy has become the trend of the global economic development,it is undoubtedly an important and urgent issue to further liberalize the the dual class share structure..In the space reserved by the current law,the construction and development of the dual class share structure in China can be promoted by the combination of substantive law norms and the autonomy of the articles of association.On the one hand,enacting and improving rules and regulations of the dual class share structure,including scope of application,the restriction and the exiting mechanism.On the other hand,it is necessary to improve the supporting systems,such as information disclosure,independent director,fiduciary duty of controlling shareholder,investor litigation.By doing this,we can provide institutional protection for the introduction of the dual class share structure.