Proposed elimination of paper share certificates sparks public fury

Digitalizing the UK Stock Market: A Shift Towards Online Investing Platforms

The UK government is set to scrap physical share certificates and move towards online share registers by the end of 2027, as part of a broader effort to modernize the UK stock market. This move is backed by the Chancellor and aims to boost the City's competitiveness.

Several online investing platforms, including InvestEngine, Trading 212, Interactive investor, AJ Bell, Hargreaves Lansdown, and others, are expected to play a significant role in this digital transformation. The report does not cover the right to call shareholder meetings or inspect an ownership register, nor does it provide any comparative analysis of these platforms' services or features.

However, the plans have been met with criticism. Critics argue that this could strip millions of investors of their basic rights and erode their ability to hold company boards to account. They contend that the move could force all UK share owners into a nominee system, where shares are held by third-party bodies such as investment platforms.

Some platforms do not pass on details about shareholder rights, such as the right to vote and attend meetings, or charge high fees for doing so, according to critics. Cliff Weight of ShareSoc, which represents small investors, has stated that the changes could make it difficult for small shareholder activism and make boards unaccountable to shareholders.

Critics also express concerns about the potential impact on shareholder rights, particularly in relation to the right to vote and attend meetings. The report does not mention any specific plans to protect shareholder rights in the digital system.

It's important to note that nearly half of all share certificates are held in five firms - Lloyds Bank, Aberdeen, National Grid, BT, and British Gas owner Centrica. The article does not mention any potential changes to the fees charged by these platforms in relation to the move to digital share certificates.

The move to digitalize share certificates is not without its challenges, but it represents a significant step towards modernizing the UK stock market. As the transition unfolds, it will be crucial to ensure that the rights of all shareholders are protected and that they continue to have the information and tools they need to make informed investment decisions.