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What’s the latest on Sir Douglas Flint and his Digitisation Taskforce?

Prompted by our recent discussions with Euroclear, Registrars and ShareAction, we are seeking through ShareAction a follow up meeting before the Taskforce publishes its final report, expected by the end of September.

During March, UKSA and ShareSoc agreed a joint position paper on digitisation. The conclusion is that UKSA’s and ShareSoc’s position is that none of the proposed models as described in the Taskforce’s interim report satisfactorily address the dual requirements of enhancing the rights of intermediated investors/UBOs and protecting the rights of existing shareholders. In our view, the nominee system needs to be improved so that UBOs enjoy the universal ability to exercise the rights associated with share ownership irrespective of the intermediary that an investor uses as required by the terms of reference.

Since then, there’s been an election resulting in a new Labour government and we’re not sure where Sir Douglas is going with his review and recommendations for digitising the remaining certificated shares. As a result, UKSA, ShareSoc, Registrars and ShareAction met to discuss what we should do and we are now in the process of getting a follow-up meeting with Sir Douglas.

On 21st July, we noticed an FT story headlined 'BP and Shell among UK companies mounting push to ditch paper shares' by Michael O’Dwyer. On the face of it, the article suggests that issuers are pushing the Taskforce for total decertification in the interests of saving money and without any consideration that they should be paying for retaining shareholder-on-register rights, as it is shareholders that provide their financial capital.

We need to continue to make sure that the Taskforce gets the balance right, making sure it meets its terms of reference and retains shareholder-on-register rights for those with paper shares and restores shareholder-on-register rights to those whose shares are and will be held in nominee accounts.

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