Tag: Digitisation Report

Digitised Share Registers and surrounding myths

The Investors Chronicle have reported that the Government has announced its intention to accept the recommendation of the Digitisation Task Force to proceed to a staged transition to remove paper share certificates. To quote: “The first stage of this process will see existing paper share registers replaced with digitised versions, which should be completed by the end of 2027”.

It astonishes me that there are any paper share registers still in use. Are there companies really still using leather bound paper share ledgers to track their shareholders? Surely most are now at least using spreadsheets to record their shareholders.

For publicly listed companies (which is all we are concerned with) they are typically using a few professional registrars who all have digital systems. So setting an end-date for completion of this step of 2027 is surely quite ridiculous and shows how little knowledge there is of the work required to remove paper share certificates.   

P.S. Some people think that the fact you are holding a paper share certificate is indisputable evidence that you own the shares. This is mistaken. The ownership is confirmed by an entry in the company’s share register alone.                                                                           

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Damning ShareSoc Press Release on Digitisation Report

ShareSoc have issued a press release on the Final Digitisation Report issued by Sir Douglas Flint. It is highly critical of some aspects of the report and quite rightly so. See https://www.sharesoc.org/sharesoc-news/digitisation-taskforce-report/

Mark Northway, ShareSoc Policy Director, included these comments in the press release: “It fails to protect key shareholder rights and introduces dangerous financial incentives which will further erode investor engagement.

It is particularly disappointing that the taskforce has chosen to prevent investors from leveraging digital technology to communicate between themselves by email. Without the threat of shareholder activism, many of the corporate governance improvements of the past twenty years would not have happened.”

If the Flint report is adopted without major changes it will set back shareholder representation by many years.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.