BIS Release Paper Showing the Mind-Boggling Complexity of the Intermediated Shareholding Model

PRESS RELEASE 72 19/1/2016

The Government BIS Department have released a Research Paper entitled “Exploring the Intermediated Shareholding Model”. It shows in 160 odd pages the existing share registration models in the UK and the underlying systems that support shareholder rights (including voting). In essence it demonstrates perfectly the need for reform.

It shows that private investors often do not know what rights they have in nominee accounts or indeed that there are alternative ways of holding shares. Even if they are aware they should have rights, they often do not know how to exercise them, and few brokers actively encourage them to do so.

Institutional holders are also baffled by the complexity of the intermediary chain and cannot easily determine whether their votes have been cast.  As it says in the Paper: “In both communities, investors had become systemically distanced from the companies they invested in over time.

ShareSoc welcomes the report as a contribution to the debate for the need for reform. It well explains the iniquities of the prevalent nominee system in comparison with the historic position of individual investors with share certificates or those holding Personal Crest Accounts.

The Paper does not of course propose any remedies for all the failings it makes plain – that may come out of the BIS in due course. But it makes it clear why we need a better alternative to nominee accounts that is readily available and a good electronic form of holding shares to replace paper share certificates, for which ShareSoc has been campaigning for some time (see ). Plus of course why ISAs and SIPPs should not require the use of nominee accounts which are currently mandated by almost all brokers although legally that was not the original intention.

The BIS Paper can be found here:

More analysis and comment on the Paper by ShareSoc can be found here:

For further information, please contact:

Roger Lawson
Deputy Chairman, ShareSoc
Telephone: 020-8467-2686

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