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 –
The BIS Paper can be found here: https://www.gov.uk/government/publications/shareholding-
More analysis and comment on the Paper by ShareSoc can be found here: https://www.sharesoc.org/BIS-
For further information, please contact:
Deputy Chairman, ShareSoc