The internet has revolutionised share-buying.
By Gavin Oldham
The Share Centre stockbrokers
Gavin Oldham, share expert
Investors are able to review their portfolios online and get access to a huge range of research and analysis on their holdings.
The only thing which is missing is access to annual reports and shareholders' rights from the companies in which they have invested.
This is because their shareholdings are often held in nominee accounts, usually run by a stockbroking firm.
This is by far the most efficient way to hold a portfolio of shares.
The government has recognised this by requiring it to be used for all tax-free savings accounts such as PEPs, ISAs and self-invested personal pensions.
But until now, the country's 24 million shareholdings held in nominee accounts have not had full shareholder rights.
A government amendment to the Companies Bill currently going through Parliament means that it will now be obligatory for all companies traded on regulated markets to extend these rights to nominee shareholders too.
The new legislation covers a number of key provisions to encourage shareholder engagement, and at its heart is the supply of information.
Nominee operators will in future be able to invite shareholders to "opt in" for hard copy shareholder information on the same basis as registered shareholders.
This information is essential for assessing the company's performance and attending and voting at shareholders' meetings.
This provision covers all listed companies and the secretary of state is reserving the right to extend it to unlisted companies by secondary regulation when and if appropriate.
The Bill makes attending and speaking at general meetings considerably easier for nominee shareholders.
So what are the implications of these changes?
They will mean that shareowner democracy in the UK will be significantly strengthened.
Many private investors will now be able to influence the future of the companies in which they have chosen to invest and become a part-owner.
Investors will be able to choose between hard copy or electronic information describing what is happening in their companies.
This covers not just the annual report and accounts, but also corporate action information such as an acquisition and bid approach.
The proportion of personal nominee share ownership in some companies is large enough to affect its future.
Nominee investors will be able to attend and speak at general meetings and join with other shareholders to table shareholder resolutions.
The latter was a big issue in the recent Royal Dutch Shell general meeting, where a shareholder resolution was put forward by investors with social and environmental concerns.
Nominee operators, such as stockbrokers, will offer a variety of voting arrangements - including using the internet - for ease of engagement.
The only issue which has not been addressed in the amendment is that of shareholder benefits, or "perks", such as discounts on products.
A quarter of companies which supply these benefits do not extend them to nominee shareholders.
But since this is viewed as a commercial matter, rather than one of corporate governance, the government takes the view that it is difficult to include them in the legislation.
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