I don’t see how that could work generally. Sure, it might be possible to enforce by-laws when making a sale/purchase (but extra obligations would inevitably drive down the sale price), but what of situations in which collateral shares are foreclosed upon, they are inherited, or other non-voluntary transfers of ownership? What if one day they ended up even temporarily in the hands of a government (for example, the Italian government’s property and assets cannot by law by encumbered in such a manner). What then? The chain is broken.
Would it be legal to simply grant extra rights to owners who adhere to the LTSE's rules? Ie, one share carries 1 'point' of voting power, unless the owner is an individual or an entity which adheres to the LTSE rules, in which case the share carries 1 + kt points of voting power.
If an entity outside the LTSE holds some shares, that's fine. They just extract very little value from them compared to an entity within the LTSE, increasing the value of all other shares outstanding and creating a strong incentive for that entity to sell back into LTSE.
> for example, the Italian government’s property and assets cannot by law by encumbered in such a manner
Well, depending on the country the LTSE is based in, and whether that law is honored through some trade agreement signed into law in that country, I imagine what the Italian government thinks about the issue is moot.
> what of situations in which collateral shares are foreclosed upon, they are inherited, or other non-voluntary transfers of ownership?
I'm wondering if they have or are considering a grace period where if the shares are reacquired within that period the voting rights remain the same. I imagine they definitely wouldn't want the rights transferred in the case of foreclosure.
Inheritance is an interesting one, but then again, it's only a problem if you take the view that your assets should all be transferred to your relatives on death. As with inheritance taxes, there are competing incentives. Maybe shares under a certain quantity could transfer over with voting weight intact, or maybe they should just lose half their time-based voting weight (or just have the time halved, which might still leave them in the top tier of voting weight).
There's lots of ways to structure it to achieve certain goals. I'm sure some would see new case law made.
I’m going to harp on the Italian case (not because I am Italian and think it is the centre of the world, but because it illustrates just how broad one’s rules need to be to be dependable).
I am an Italian citizen. Say I own shares on the LTSE. Say I also owe the Italian government some back taxes, and that the government moves to expropriate my assets to cover my liability. My LTSE shares are now the property of the Italian government and have been shorn of whatever by-laws they might have had attached. The government then proceeds to auction off the components of my esistiate to the highest bidder, who purchases the shares without any obligation regarding his duties and structure.
This is why in general (in the mathematical sense, meaning ”in all cases”) the scheme you posit is not iron-clad. Probably it will work in most circumstances but that’s a lesser level of certainty that offers no guarantees whatsoever.
The contracts for share ownership can simply proscribe the conditions that trigger change of ownership for purposes of tenure. In such a case it would not matter if you sold the shares, gifted them, had them siezed, or offered them in a lottery -- change of ownership resets the tenure clock. In your example case, as soon as the shares were seized then for purposes of tenure they were sold by you to the Italian government to cover your debts.
