SHAREHOLDER RIGHTS CAMPAIGN
A CAMPAIGN MANAGED BY SHARESOC
Guaranteed Rights for Shareholders
In October 2014 ShareSoc launched a campaign to give full rights to ALL shareholders.
Why are Shareholder Rights Important to You?
At present most private investors purchase shares in nominee accounts. With a very few exceptions this means that they have no automatic rights to vote, to attend General Meetings of companies or even receive information on the affairs of the company. The nominee system disenfranchises the vast majority of private shareholders.
Commercial Interests have taken Precedence
This situation has arisen because the nominee system offers certain commercial attractions to stockbrokers and other financial market intermediaries, and because the Government has not given priority to the protection of the rights of individual investors.
Rights not Exercisable
Although in theory investors via nominee accounts have rights to vote, attend meetings and receive information under the Companies Act, those rights are in practice not exercisable, and are not exercised, by the vast majority of private investors. In addition many rights that are otherwise available to shareholders who are on the register of a company are lost.
Shareholder Democracy Destroyed
Shareholder democracy has been fatally undermined by the historic changes to the way the UK stock market operates to the detriment of good corporate governance in companies as the voice of individual shareholders is lost. Individual shareholders have a direct ownership interest rather than simply acting as agents for others as is the case with many institutional investors, so they are more likely to express concerns about management failings, excessive director pay and poor corporate governance.
Here is a brief video explaining why shareholder rights are important and what needs to be done to improve the current situation:
A meeting was held on the 14th October 2014 to promote this campaign and several speakers explained how and why the current situation has come to pass. ShareSoc presented our conclusions on how it should be rectified. Speakers at the meeting were Stan Grierson and Roger Lawson from ShareSoc, Peter Swabey from ICSA, John Lee (Lord Lee of Trafford, a well known FT writer and private investor), John Kay (author of the Kay Review and FT writer), Paul Scott a well know private investor and blogger, Cas Sydorowitz from Georgesons and Michael Kempe from Capita representing the ICSA Registrars Group. A report of the meeting is present in this document: Shareholder-Rights-Meeting-Report. There was a general consensus of both the speakers and the audience that there are numerous problems with the existing nominee system and with dematerialisation looming it was necessary to devise new arrangements.
If you wish to register an interest in this campaign, please send an email to email@example.com with “shareholder rights” in the subject or title, and requesting you be added to our contact list.
Send an email to that address also if you have any questions about this campaign, or call 0333-200-1595.
Download the Full Analyses
We have published two documents that contain a complete analysis of the issues on shareholder rights and how to resolve the problems. These can be downloaded from here: Guaranteed-Votes and Reforming-Share-Ownership (click on to access). Cover photos are above. A summary of our proposals was contained in this press release: Press063 . It includes support for a new low cost electronic trading facility to meet the CSDR regulations that should be available to everyone, and ways to ensure that everyone is on the share register of companies and hence get full rights.
Defeating Shareholder Democracy
Examples of how the existing share holding arrangements defeat shareholder democracy and rights were given in this blog post in July 2015: Defeating-shareholder-democracy
In January 2016 the Government BIS Department published a Research Paper entitled “Exploring the Intermediated Shareholding Model”. It explains the mind-boggling complexity of the existing UK share registration models and the underlying systems that support shareholder rights (including voting). It demonstrates perfectly the need for reform. This note gave our comments on that Paper: BIS-Paper-Shareholding-Model
How You can Help Bring True Shareholder Democracy About
ShareSoc is working hard to address the issues explained above and in the linked documents. We are in an onoging and active dialogue with government officals and legislators. However, to bring about what is needed we also need your help. The following paragraphs explain what you can do to help further this campaign.
Sign the Petition
A petition to support the changes required to enfranchise all shareholders is present here: SR-Petition. Please sign it!
Write to Your MP
We urge supporters of this campaign to write to your Member of Parliament or any members of the House of Lords you may know. If you don’t know who your M.P. is you can find out by going to this web page: www.parliament.uk/business/commons (enter your post code in the box on the right) which also gives you their contact information. A template letter is present here: Word Version or PDF version but such letters are most effective if you personalise them in some way with your own comments so that it really grabs their attention! You could include past negative experiences associated with nominee accounts for example.
Support this Campaign Financially
Note that to make this an effective campaign we do need to spend money on it. ShareSoc has been contributing its own funds to this campaign, particularly to cover some of the initial launch costs, but we do need further funding to make this a high impact and successful campaign. Please click on the button below to make a voluntary contribution via any debit or credit card (using the PayPal service – click on the “Continue” link at the foot of their payment page if you do not have a Paypal account). Note that any funds contributed specifically to this campaign will be recorded separately and will only be spent on this campaign or otherwise to promote the rights or interests of individual shareholders if the campaign itself is subsequently terminated. You can also donate by cheque or by other means if you prefer – call 0333-200-1595 for assistance on that (calls are charged at the standard landline 01 or 02 rate – free in many mobile plans).