Representing, Lobbying and Campaigning – Progress Update 01 August 2022

Executive Summary

We have focussed our resources mainly on the Woodford campaign, best practice guidance for AGMs, nominee accounts and pre-emption rights; and maintaining good relationships with the FCA, FRC, BEIS and Treasury. Activities relating to ShareSoc’s shortly to be launched Investing Basics Course have consumed much of our available resource and limited what can be done on campaigns. Nevertheless, we have made much progress.

Since our last update of 4 April 2022 we have worked on:

  1. Consultation responses and government lobbying
  2. Shareholder Rights/Nominee Accounts
  3. Woodford Campaign
  4. Voting Guidance and Shareholder Engagement
  5. FCA liaison
  6. FRC, BEIS, etc liaison
  7. Campaigns
  8. AIM regulation

1. Consultation responses and government lobbying.

This continues to be a major area of work, where ShareSoc represents the interests of individual investors.

  • Secondary Markets fund raising review: This was published on 26 July and has recommended significant changes to the nominee system and dematerialisation, which we lobbied for and are very pleased with. We are also hopeful individual investors will gain access to all placings on fair terms.
  • Prospectus regime/crowdfunding interactions: We have been asked to meet HM Treasury to put forward the views of individual investors.
  • We responded jointly with UKSA to proposals from the new International Sustainability Standards Board ISSB IFRS S1 and S2 EDs consultation response

2. Shareholder Rights/Nominees

Sir Douglas Flint has been appointed by the Chancellor to head the Digitisation Taskforce. We are very pleased at this progress. As noted above in 1., the Secondary Markets fund raising review recommended significant changes to the nominee system and dematerialisation, which we lobbied for during this review and previously to BEIS, the Law Commission and others. After years of disenfranchisement of individual investors who beneficially own shares via nominees, real progress is looking much more likely.

3. Woodford Campaign

We currently have >1,800 members supporting the ShareSoc Woodford Campaign and are working to increase this hugely. The Webinar on 19 July was very well received. Group Litigation Order agreed.

Over the next 6/12 months, there will be a big push to recruit people to the claims (currently only 10% have joined a claim) as the deadline to claim will probably be early/mid 2023. We aim to ensure that as many as possible of those that are eligible to claim redress do so.

4. Voting Guidance and Shareholder Engagement

We continue to test our new ideas with a pilot study of FTSE30 companies. This is a major exercise and reports have been published for c20 companies. There is relatively little activity this time of year. Reports have been done for Tesco and Unilever.

See for more information.

5. FCA

We continue to liaise positively with the FCA over numerous issues that we think are important to individual investors and ensure that the FCA give due regard to the views of individual investors. We met with the FCA Primary Markets Team on 3 March and need to schedule the next quarterly meeting. We have emailed to ask to schedule a meeting with the funds team, who we have not met since July 2021. We asked the FCA Chair for help in publicising the Investor Basics Videos and the FCA have offered to put forward a speaker at a launch conference/webinar.

6. FRC, BEIS, etc.

We also meet regularly with FRC, BEIS and other key influencers to present to them the views of individual investors.

  • We met with the FRC on 20 April, and on 25 July.
  • We provided strong input to the FRC report on AGMs and shareholder engagement, which was published at the end of July. We think this offers some useful guidelines in respect of individual investors, especially re engagements and company meetings.
  • We met BEIS on 7 July and a meeting with the Minister Lord Callanan should occur.
  • We are concerned about accounting provisions for legal class actions and raised a question at the TESCO AGM. We intend to write to the FRC as a next step.

7. Campaigns/Problem cases

  • Sirius. We, led by Paul Anscombe, are still working on this but currently have nothing further to report.
  • We have been asked to look at 4D Pharma (DDDD) and Scirocco and have provided some assistance to concerned investors.

8. AIM regulation:

AIM is regulated by the LSE itself. We remain very concerned about what are, in our opinion, inappropriate and irregular (more than just questionable) practices, that may occur in some AIM companies from time to time. We frequently report such cases to the FCA and LSE/AIM. Please alert us if you are concerned about malpractice.

Cliff saw Marcus Stuttard at the UKSA AGM and agreed to fix a date to meet up in September.

9. Our Mission

We clarified how policy, campaigning, lobbying and representing fitted into ShareSoc’s mission of championing and empowering individual investors in a recent news item, viz

One of ShareSoc’s primary functions is to represent individual investors. To do this we lobby Government and Regulators about individual investor needs, and campaign for change from government, regulators and financial service providers.

Alongside this, we networkinform and educate investors though events, company presentations, SIGnet groups, educational content, newsletter, blogs, tweets and emails. These elements combine to make the investing experience better for our members.

ShareSoc has been working hard for many years to improve its relationships, networking and influence with the FRC, BEIS, FCA and many other organisations. Much of this work we do jointly with UKSA, the UK Shareholders Association. The FRC and others now routinely seek the views of individual investors before making their decisions.

More volunteers or donations (which enable us to recruit more paid staff) are necessary to enable ShareSoc to do more work to representmembers’ interests. All offers of help are warmly received.

Cliff Weight, Director, ShareSoc

1 August 2022

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