This can be done in a couple ways: a “fully” dual-listed company has separate legal entities that are listed on separate exchanges but, operationally act as one company. A cross-listed company involves no separate legal entities, therefore the shares are essentially interchangeable across exchanges. This is structured in primary and secondary tiers with shares being issued at a single exchange (primary) and traded at multiple exchanges (secondary).
The benefits of a DLC structure include greater access to capital (especially for companies headquartered in emerging markets), more liquid shares and a larger public profile. The main drawbacks of a DLC are the costs associated with listing on multiple exchanges and maintaining compliance in multiple regulatory environments.
These days, most DLCs are cross-listed in the primary-secondary structure i.e. one legal entity. Often, a “fully” dual-listed company with separate legal entities only exists due to a merger between two publicly listed companies.
Both structures provide the DLC with the same benefits and drawbacks. Typically the companies looking to dual-list are very large multinationals. As such when you compare the “fully” dual-listed versus cross-listed structure, you can imagine how an already large, complex, multinational company separated legally for no additional benefit can be cumbersome. In fact, the legal separation can prove negative as disposals, acquisitions or large strategic changes can become particularly difficult to allocate.
To conclude, a dual listing can be beneficial for companies, particularly with a cross-listed (primary-secondary) structure. Attempts by “fully” dual-listed companies to move to a cross-listed structure should be welcomed by investors looking for companies with long term growth ambitions.
