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Last Updated: Saturday, 11 November 2006, 14:21 GMT
New rights for small shareholders
By Paul Lewis
BBC Radio 4's Money Box

Gavin Oldham, shares expert
Shares expert Gavin Oldham said he is delighted with the news
Millions of small shareholders are to get new rights to attend AGMs and influence the policy of the companies they invest in.

At the moment many are disenfranchised if they buy their shares online or through tax-free Peps or ISAs.

But over the next year or so these so-called "nominee account" shareholders will get the same rights as individuals who buy their shares direct.

The change is part of the Companies Act, passed by Parliament on 8 November, and should come in by 2008 at the latest.

Gavin Oldham, chief executive of the Share Centre who has been campaigning for these rights for nearly 20 years, told BBC Radio 4's Money Box programme he was delighted with the news.

"People who hold shares in Peps and ISAs have been waiting for this for a very long time indeed," he said.

"Many of the people who hold shares in nominee accounts are very, very active shareholders and they are the ones most likely to want to get involved with the companies they invest in."

Enfranchising nominee shareholders will double the individuals who can influence companies
Gavin Oldham, Share Centre
He gave the example of the AGM of Royal Dutch Shell in May when protesters struggled to get the signatures needed to get a vote on a resolution to make the company take environmental concerns more seriously.

Although the resolution was eventually defeated by a large majority, Gavin Oldham said individuals can bring about change.

"Once this law is in it will be possible for nominee shareholders to join in. Enfranchising nominee shareholders will double the individuals who can influence companies," he said.

Once the new law is implemented shareholders will be able to choose to receive the annual report and accounts and get the right to attend AGMs, join in resolutions and vote.

Mr Oldham hopes the change will start next year.

"There is a backstop on the Companies Act of 2008. But I hope the industry will come up with a solution before that," he told the programme.

"Registrars and companies should appreciate that Parliament has spoken and I hope to see it in place for next year's reporting season."

He will also be writing to 15 companies that currently give some shareholders perks but deny these to nominee shareholders.

Although the new law will not force them to extend perks to all shareholders, Mr Oldham hopes they will.

"There isn't a provision in the act but we will be writing to those 15 to ask them to provide perks to nominee shareholders. I am hopeful they will."

BBC Radio 4's Money Box was broadcast on Saturday, 11 November, 2006 at 1204 GMT and was repeated on Sunday, 12 November, at 2102 GMT.

Shares expert Gavin Oldham on the changes

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