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UKSA's review of the paper is all too revealing of the fact that the intermediate shareholding model cannot be relied upon to facilitate the shareholder engagement that the government wishes to encourage.

The Department of Business, Innovation & Skills (BIS) has published, as BIS Research Paper 261, the result of research it commissioned into the ‘Intermediated Shareholding Model’.

This investigation was undertaken to assist the government as it prepares for dematerialisation – the abolition of paper share certificates. This was originally mandated by the EU, but is now seen as being essential for the UK itself, in order to establish a safe, reliable and inexpensive method of holding shares electronically, in investors’ own names, which can restore to individual investors the rights that, over the years, have been taken away. A potentially related issue is the extension of the so far little used ‘information rights’ provision in Part 9 of the Companies Act.

The UK Shareholders’ Association supports the efforts of BIS to address these issues, but has been obliged to question aspects of the research findings which appear suspect, possibly because of misunderstandings. On the other hand, the report reveals stockbrokers’ opinions, no doubt accurately reported, that reflect a shocking disregard for individual investors. It is evident elsewhere in the report that the intermediated shareholding world occupied by institutional investors is a shambles.

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