The MSCI released its Consultation on the Treatment of Unequal Voting Structures in the MSCI Equity Indexes soliciting input on index inclusion criteria relating to the shares of companies having a dual class structure. Many commenters have responded by releasing their views publicly. While many institutional investors have taken the opportunity to comment on their concerns regarding dual class structures, particularly those with no sunset provisions, and have voiced a strong preference for a one share-one vote model, some of the same institutional investors have advocated that MSCI indices continue to include the securities of companies with dual class structures. Some have suggested that the MSCI consider offering bespoke indices and broad-based indices. The broad-based indices would reflect the investable market, including the securities with unequal voting rights. By contrast, bespoke indices might be tailored to include only the securities of companies having certain characteristics. Along these lines, a bespoke index might omit the securities of companies with dual class voting structures.
Originally published May 25, 2018
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