We had asked for the meeting to express concerns at the direction of the Taskforce’s Interim Report expressed in our formal response.
The meeting with Sir Douglas Flint and Mark Austin, whose Secondary Capital Raising Review resulted in the Digitisation Taskforce, was constructive, but the outcome was ambivalent. We have therefore repeated our concerns in an email on 22nd December 2023 from the UKSA chairman to Sir Douglas as follows (UBOs stands for Underlying Beneficial Owners).
Dear Sir Douglas
Digitisation Taskforce Interim Report follow-up
Thank you for your recent meeting that enabled us (UKSA and ShareSoc) to clarify our response to your interim report.
We were encouraged by your and Mark’s comments that there was no plan to remove any rights from shareholders and if we got this impression (as implied by our response), you would resolve this. You also pointed out that restoring UBOs’ rights to that of shareholders would need legislation.
However, our understanding of your comments leaves us with some significant concerns. It could mean that, unless primary legislation is passed, we will be left with the status quo after certificated shareholders are digitised (ie certificated shareholders will become UBOs who will not be recognised as shareholders, as their nominee holder will, and existing UBOs will not have their rights restored).
Therefore, please would you confirm that:
- Certificated shareholders will not lose their existing shareholder rights when they are dematerialised. Accordingly, if dematerialisation requires them to become UBOs, through passing primary legislation their existing shareholder rights will be preserved and exercisable irrespective of investment platform or nominee account terms;
- Existing UBOs, including those required to be UBOs because of holding their investments in an ISA or SIPP, will be given (by passing primary legislation) those rights which members have today as if they were recorded as members in the register of shareholders.
If this is not the case, please could you confirm what you plan.
Regards, Charles
We are now waiting for a reply.
