Overview

In the UK today paper share certificates are allowed, and are still being issued by companies. The UK government has long wanted to end this practice, and to "dematerialize" or convert all paper share certificates to electronic ledger holdings. Technology has advanced to the point that the government feels comfortable pushing forward with this, and established a taskforce on July 19, 2022 to make recommendations on how to move forward. They recently issued a full report recommending many changes.

We The Investors fully supports this effort - paper certificates are unnecessary, anachronistic, and can present serious problems with shareholder record-keeping and engagement. We appreciate that the UK is considering a distributed ledger approach amongst the options for modernization, and believe that such a decentralized and transparent system is the best answer for settlement and record-keeping.

We are concerned with parts of the proposal that would push all holdings into what is called a "nominee structure" in which all holdings of individual investors would be under a broker, rather than have the option to have shares held directly by individual investors on a company's share ledger. This structure could result in shareholders losing the ability to vote their shares with confidence, participate fully in corporate governance, and to communicate directly with the companies they invest in.

Computershare has put together some excellent resources for this issue, including an overview site, and a comprehensive guide and response.

If you agree with us, please join us in our mission to increase shareholder engagement and foster direct relationships between shareholders and issuers by writing your own comment letter (feel free to take any parts of ours you want) or by simply signing your name and filing this letter.

How To Have Your Voice Heard

If you are interested in commenting on this proposal, the simplest and safest way is to do so by email.

NOTE: The deadline for comments for these rule proposals is September 25, 2023.

If you don't have the time to write a letter yourself, we would encourage you to take the letter that we have filed, make sure that you agree with its content, feel free to customize it if you'd like, and then sign and email it. We have linked to two different formats on the right.

When signing this letter, you can do so electronically (type your name and position/title at the bottom) or print, sign and scan it.

Please follow these steps to file the comment letter:

1. We recommend a relevant subject line, such as "Feedback on Taskforce recommendations"
2. Attach your comment letter, preferably as a PDF (alternatives include Word or Text docs).
3. Send the email to digitisationtaskforce@hmtreasury.gov.uk.
4. Share this on social media! Let everyone know that you've gotten involved in the process, that you've put the effort in to make yourself heard, and encourage them to do the same. Use the hashtag #WeTheInvestors or tag us at @WeTheInvestors_ on Twitter.

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