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The UK Shareholders' Association (UKSA) is the leading independent organisation representing the interests of private shareholders in the United Kingdom. We:
The UK Shareholders’ Association continues to fight for better corporate governance and the better accounting that goes with it. One matter of concern has been, what should be meant by the term “going concern”?
For many years company directors have been required to ensure and believe that their accounts are drawn up on a “going concern “basis. In practice this has always been the case, as to use any other basis could only mean that the liquidator was at the door.
However, in 2011, a panel under the chairmanship of Lord Sharman suggested that consideration of going concern should be expanded to embrace what it called a “stewardship” basis. The idea was to require directors to consider a longer period, consider matters more broadly and make an overtly positive statement. The Financial Reporting Council (FRC) is now struggling, against director opposition, to have this incorporated in a revision of its Corporate Governance Code.
To overcome the resistance, the FRC has come up with a compromise, but the coalition of pension funds and other major investors with which UKSA has now been working for some time feel this is not good enough, so we have sent our joint thoughts to the FRC and a copy of that paper is attached.
Stockbroker Selftrade recently threatened to deny its customers access to their investments. It has since told them they are to be transferred to Equiniti, but not yet.
Selftrade originally demanded highly personal, intrusive information, supported by certified documents sent through the ordinary post – or accounts would be frozen. In the face of customer outrage the demands have been watered down, but they are still demands.
This is not the first instance known to The UK Shareholders’ Association of a broker taking such abusive action. We are greatly concerned by nominee account providers’ apparent freedom to hold their customers to ransom in this way. The excuse is invariably the Financial Conduct Authority’s requirement that brokers must know their customers, but this sensible obligation is seemingly open to all manner of interpretation. When opening a new account an investor has free choice of provider, but when that provider imposes onerous demands after taking the investor’s money that, to say the least, is grossly unfair treatment.
If a pooled nominee account provider can show that it knows its customers, how it treats them is apparently of no concern to the FCA. That is seriously wrong. Investors who find themselves obliged to use such nominee accounts, which includes those using ISAs and SIPPs, deserve better protection for what may be very substantial investments.