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Decoding Share Ownership Landscape: Challenges and Solutions

Explore the complexities of pan-European share ownership and the challenges faced in voting processes. Discover key players like registrars, custodians, voting agencies, fund managers, and beneficial owners, and understand the barriers hindering effective ownership. Uncover future issues and the need for closer integration between governance and investment activities.

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Decoding Share Ownership Landscape: Challenges and Solutions

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  1. Taking ownership of ownership The challenges of pan-European share ownership Sarah Wilson Managing Director Manifest Information Services Ltd

  2. 3 Themes, 1 Question Question: Who is in charge of voting? • What are the barriers? • Voting issues • Changes coming

  3. What is Manifest? • Structured, consistent, comparable & timely • Governance metrics, proxy guidance • Independent & impartial

  4. Who’s in charge? • Probably not who you think! • Cast of characters • Registrars • Custodians/Sub-custodians • Voting agencies • Fund managers • Beneficial owners • Trade Associations • Regulators

  5. Registrars • Registered ownership model is of enormous benefit • Need to export this model to other markets • Oversight of AGM process, vote tabulation: legally profound process, confidence, communication, clarity

  6. Custodians • Most shares “owned” via pooled nominees • Pooled ownership obliterates real ownership • Custodians have mostly outsourced voting to 3rd parties • ONE OF THE MOST SIGNIFICANT BARRIERS

  7. Voting Agencies • Come in many flavours: • Tied to trade associations (Conflicts?) • Paid by issuers (conflicts?) • Axe to grind? • Relatively “cheap” analysis • M&A issues/investment research

  8. Fund Managers • Again, many flavours • Full-on, engaged, professional; or • Box-ticking, Lowest Common Denominator • Who engages? • Domestic/overseas issues

  9. Beneficial Owners • Not one size fits all • Pension funds • LGPSs • Trusts • Charities • Insurance funds • Domestic vs international perspectives

  10. Trade Associations & Regulators • Gate-keepers of collective thinking • Guidelines may not be dynamic • Steering & rowing problems • Collective view vs the individual

  11. Barriers • Foreign stock exchange rules imposed outside domestic frontiers • Pooled a/c’s • Sub-custody access • Share-blocking • Wet-ink signatures • Physical attendance • Ancient rituals & procedures not keeping pace with technology

  12. Barriers (2) • Lack of investment • Perceived “low-value” of governance • Needs closer integration with investment activities • Investment governance vs. issuer governance

  13. Future Issues • Promulgation of transparent, global, open standards • Closer integration: • Governance & Investment • IROs/Co-Secs • Real ownership dialogue • Get behind the nominee • Talk to real owners Away from box-ticking/off-the-shelf boiler-plate

  14. Future Issues • Know the cast & understand their motivations • Understand the mechanics – get the real answers, not the spin • Governance is highly-charged & politicised

  15. EU Consultation • Broadly very supportive • Concerned about lack of joining up with clearing/settlement • Many issues could be resolved by better working practices & willingness to embrace change • Lack of healthy competition

  16. Finally Thank you for listening! Sarah Wilson +44 (0)1376 504503 sarah.wilson@manifest.co.uk http://www.manifest.co.uk

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