Companies have always attached significant importance to knowing the composition of their shareholdings. This proximity offers significant benefits: sharing information to shareholders more effectively and meeting their expectations as best as possible.
Difficulties related to administered registered shares
The level of shareholder knowledge varies significantly depending on the form of ownership: registered or bearer form.
In bearer form, the identity of the shareholder is unknown to the company. On the contrary, companies have more knowledge of their shareholders when they have chosen to be nominally known to the issuer (pure or administered registered ownership).
Read our article here for more information on the different forms of ownership.
Administered registered shares represent a hybrid case. Although the company has accurate information about its shareholders, the shares are managed by a third party chosen by them. Any change affecting a shareholder (personal data, transactions, etc.) must be reflected in the company register at the initiative of the financial intermediaries. This implies a continuous flow of information between the financial intermediaries chosen by the shareholders and the companies (or their registrar).
However, this double accounting reveals well-known difficulties for companies and their record-keepers, such as Uptevia, in the management of the registered shareholders who are administered. The organization of general meetings, and more particularly the sending of convening notices by e-mail (e-convocation), are an illustration of these difficulties. Indeed, if registrars (acting on behalf of the companies) wish to send e-convening to a wider audience, they must ensure that they have up-to-date information. It is therefore up to them to contact the various intermediaries in order to collect the e-mail addresses of these shareholders.
The solutions considered by the financial players
In light of this observation, Uptevia is organizing with the entire financial center (record keepers, financial intermediaries central securities depository Euroclear France) to facilitate these exchanges of information.
Thanks to the work carried out within France Post Marché (FPM), discussions are now moving towards a solution using the BRN (Bordereau de References Nominatives). This has the advantage of using an already existing communication system. Indeed, the BRN is now the automated exchange channel used by financial intermediaries and record keepers to communicate data of administered registered shareholders. The purpose of this solution is to provide dedicated fields in the BRNs. for certain data (e-mails, telephone numbers, for instance).
An alternative would be the implementation of a standardized file: it would be an Excel file standardized according to the technical requirements of the registrars and the financial intermediaries to share certain data. This would be a temporary solution, pending the upgrading of the communication system via the BRN by all participants, described above.
“We are actively working on the development of a common solution for the financial place and are confident that its implementation will facilitate the exchange of information for all players over the long term,” says Sébastien Courtellemont, Head of the Nominative Experts Group at FPM and Head of Strategy and Product Solutions at Uptevia
These solutions also aim to anticipate regulatory changes that will affect the organization of General Shareholders’ Meetings, in particular the implementation of e-convening by default.
