Definition of one-share-one vote rule

the principle that public companies should not reduce shareholder voting rights. Originally, the New York Stock Exchange had a one-share, one-vote requirement for its listed companies. In 1988, the SEC adopted Rule 19c-4, which prohibited companies listed on a national securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System (NASDAQ) from disenfranchising existing shareholders through, for example, issuances of super voting stock. The rule, however, was struck down by the Court of Appeals in Business Roundtable v. SEC in 1990. In December 1994, the SEC approved rules proposed by the New York Stock Exchange, American Stock Exchange, and National Association of Securities Dealers that establish a uniform voting standard. This new standard prohibits companies listed on the NYSE, the AMEX, or the NASDAQ system from taking any corporate action or issuing any stock that has the effect of disparately reducing or restricting the voting rights of existing common stock shareholders.