Subject: Protecting Shareholder Rights and the Sanctity of Direct Registration

Subject: Protecting Shareholder Rights and the Sanctity of Direct Registration.

Dear Mr. Douglas Flint,

I am writing to you as an advocate for the protection of shareholder rights and the sanctity of direct registration within our securities framework. The decisions made today will shape the future of our financial system and profoundly impact the lives of countless investors, both small and large.

Let me begin by acknowledging the efforts as put forth in the proposal for the dematerialisation of share certificates. The pursuit of innovation in our securities market is commendable, and I am heartened to see that we are exploring new avenues to enhance transparency and efficiency, particularly as demonstrated in proposed share model four, Distributed Ledger Technology using Blockchain.

It's vital that we preserve shareholders' rights, prioritising them above government self-interest, and protect individuals' choices in asset holdings. Securities held under shareholders' own legal name in the company's direct registrar should be joyously revered and promoted as an industry standard.

The proposal of transferring legal ownership of our assets into a Central Securities Depository (CSD) managed by the state raises grave concerns and inherently contradicts the fundamental premise of Article 1 of Protocol 1 to the ECHR, which states:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions."

What peace is there to have when our assets' security is under threat while in the care of the UK government?

I will address these risks as below.

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The Core Concern:

The core of the concern lies the proposition that shareholders should be compelled to transfer their Direct Registration System (DRS) held shares to a Central Securities Depository (CSD), administered through a nominee, specifically CREST, under the management of UK Government institutions — a recommendation put forth by HM Treasury.

To facilitate this transition, the proposal briefly hints at the need for amendments to the primary legislation to enable the transfer of legal title (and ownership) to nominee:

 “Intermediation through a nominee requires legal title to the shares to be transferred to the nominee … This recommendation may therefore require an amendment to primary legislation.  …. governing mandatory transfer of the legal title” (pg. 23).

The proposed alteration in the primary law is a significant endeavour that demands careful consideration. It raises critical concerns related to shareholder rights and the potential long-term repercussions for investors. Despite its relatively brief mention in the report, it's essential to acknowledge that this proposed change could have far-reaching implications, touching on the core of our financial security and ownership

As a result, the Digitisation Taskforce Interim Report conspicuously lacks comprehensive and transparent disclosure, or, at the very least, elaboration. It appears to sidestep essential discussions surrounding the pressing and deeply concerning fact that shareholder rights will be put at significant risk due to the government's mandated push to transfer the legal ownership of personal assets to the state.

The desire to change primary legislation to achieve this goal this warrants thorough public scrutiny and critical assessment. For note, the absence of such scrutiny within the report, as well as evidence of discussion as had via any public channels, gives the distinct impression of intentional deception.

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The Separation of Ownership:

One of the fundamental principles of our current system is that shareholders holding DRS'd shares maintain both legal and beneficial ownership of their investments. This arrangement respects shareholders' economic rights and legal standing while ensuring their voices are heard in corporate matters.

However, the proposal seems to envision a future in which legal ownership resides with a nominee, creating a separation between the legal and beneficial owners. This separation is a cause for significant concern.

It is my understanding that when shareholders use a nominee to hold their shares, the law recognises the nominee as the official owner of the shares. In the UK, for example, the Companies Act 2006 outlines the rules for nominee arrangements.

In a nominee arrangement, there is a separation between the registered shareholder (the nominee) and the beneficial owner (the individual shareholder). The nominee's name is recorded on the company's official shareholder register, making them the legal owner of the shares for legal and administrative purposes.

The beneficial owner (i.e., the shareholder) still retains economic rights in the shares in principle, such as receiving dividends and having voting rights. However, their name will not appear on the company's official register.

This legal distinction can impact a shareholder's legal standing and participation in certain corporate actions or legal proceedings.

By compelling shareholders to forfeit their legal title to their shares under this mandated proposal, owners of securities are left with no enforceable form of ownership that would be recognised under legal jurisdiction.

This raises questions about why shareholders would support the move of their assets into a government-mandated CSD when they already have the fundamental rights afforded to them in the direct registrar, i.e., the primary register.

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Preserving Shareholder Rights vs. Proposed CSD Obstructions:

Whilst this proposal alludes to the consideration of shareholder rights:

“There should be no distinction in access to rights between shareholders who are directly registered and those who hold their shares through intermediaries." (pg. 20)

This extract inherently reflects the ambiguous and non-committal language as exercised in this report. There is a noticeable absence of definitively stated terms that would ensure the security and durability of shareholder rights, and this is a continued theme. In financial and regulatory documents, the use of such language can leave room for interpretation of the intended meaning, and subsequent abuse.

To fortify the proposal and safeguard shareholder rights, it is imperative that specific mechanisms, as firmly entrenched as the foundational framework of the proposed model, be put in place to guarantee unimpeded access to these rights. Ambiguities in the proposal, if left unaddressed, could empower intermediaries or nominees to exert control over shareholders' access to their rights over time, leading to potential limitations on shareholder participation in critical corporate decisions.

This issue extends beyond theoretical concerns; history has shown that where ambiguity exists, it can be exploited to the detriment of shareholders.

1.	The Enron Scandal of 2001: Shareholders were misled by complex financial statements that concealed massive debt and inflated profits. Enron's use of special purpose entities (SPEs) allowed the company to keep debt off its balance sheet, presenting a rosy financial picture that attracted investors. However, when the truth came to light, Enron filed for bankruptcy, resulting in massive losses for shareholders who had believed in the company's financial health.

2.	The Subprime Mortgage Crisis of 2008: This demonstrated how ambiguity in financial products could lead to widespread investor losses. Financial institutions bundled complex mortgage-backed securities (MBS) and collateralized debt obligations (CDOs), obscuring the risks associated with these investments. Many investors, including pension funds and individual shareholders, purchased these products without a clear understanding of the underlying risks. When the housing market collapsed, these securities plummeted in value, causing significant losses for investors.

3.	The WorldCom Accounting Scandal of 2002: This illustrates how unclear financial reporting can harm shareholders. WorldCom engaged in accounting fraud, inflating its assets by capitalizing ordinary expenses. This misleading financial reporting masked the company's true financial health, leading shareholders to believe that the company was profitable and stable. When the fraud was exposed, WorldCom filed for bankruptcy, and shareholders suffered substantial financial losses.

These historical examples underline the critical importance of clarity, transparency, and precise regulations in financial systems. When shareholder rights and financial systems lack clear safeguards, they become susceptible to exploitation, leading to devastating consequences for investors.

The proposed framework for transferring legal ownership of assets into a Central Securities Depository (CSD) managed by the state must therefore address these risks comprehensively to ensure the protection of shareholders' interests.

Furthermore, should shares be transitioned to a nominee structure, the controlling entity may unilaterally change the terms and conditions in which they are managed at any time, which could include:
•	Limiting Voting Rights: Introducing new rules that curtail shareholders' ability to vote on important company decisions.
o	Dividend Restrictions: Imposing restrictions on dividend access, impacting shareholders' income from their investments.
o	Ownership Dilution: Allowing for the dilution of ownership, potentially reducing existing shareholders' ownership percentage.
o	Data Access Restrictions: Restricting shareholders' access to information related to their investments, making informed decisions difficult.
o	Confiscation of Assets: In extreme cases, a controlling entity might attempt to seize assets held within the nominee structure, essentially confiscating shareholders' investments.
How does the recommended CSD model address the issue of backtracking on promises?
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The proposal equally outlines intentions to implement a “baseline service” for intermediaries to provide “access” to services, such as an “ability” to vote. However, this approach raises questions about how it aligns with the best interest of shareholders, and why these services aren't automatically provided as they are within the direct registrar.

Page 20 of the report states:

“However, as we noted above, we do not believe that it is necessary to mandate an obligation on every intermediary to offer access to UBOs [Ultimate Beneficial Owner] for the expression of their rights as long as they are transparent that this is their service proposition. However, the rights foregone should not be exercisable by any other party without the express consent of the UBO.

Where shareholders opt to be served through a service proposition which facilitates the expression of their rights, we believe a baseline service level should offer the following:

•	Ability to vote
•	Confirmation that voting instructions have been received and acted on as instructed
•	A two-way communication channel between the issuer and the UBO
•	Opportunity to participate in secondary capital offerings
•	Ability to receive shareholder notices and documentation digitally
•	An easy facility to keep shareholder details up to date so that the issuer does not lose track of shareholder contact and bank details.” (pg. 20).

One might question the true value of this "opt-in" approach in enhancing shareholder services, as the assertion appears contradictory. Requiring shareholders to actively opt into services places an additional burden on shareholders, making it more challenging for them to exercise their rights effectively. As such, this approach might diminish the convenience and accessibility of these rights, which should be easily accessible to all shareholders by default.

Could you elaborate on how it was determined that this would improve the shareholder’s experience? With note to any associated charges as would be expected from shareholders to accommodate this.

The report goes on to states it does not see it as necessary to require every intermediary to offer access to Ultimate Beneficial Owners (UBOs) for the expression of their rights, while simultaneously mandating the transfer of the legal rights of every shareholder's security asset to a nominee.

This raises questions and highlights a significant discrepancy in the proposal's priorities. This model appears to prioritise ownership structure changes over ensuring UBOs have full access to their rights and this discrepancy could affect shareholder empowerment and transparency in corporate governance.

As such, how does HM Treasury plan to address this concern and ensure that shareholder rights are not relegated to a secondary status?

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Risk of Asset Confiscation within a Mandated CSD Model:

While it may seem far-fetched, the proposal does in fact open the door to the very real possibility of asset confiscation.

In the proposal, there's a mention of the HM Treasury's commitment to comply with Article 1 of Protocol 1 to the European Convention on Human Rights as incorporated into domestic law through the Human Rights Act 1998.

However, the Article 1 of Protocol 1 to the ECHR states:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law."

In practical terms, this means that under extreme scenarios, a powerful entity, such as the UK Government, could potentially seize assets held within the nominee structure, essentially taking away shareholders' investments. This risk becomes particularly significant if it's argued that such confiscation serves the "public interest”.

The question arises: who would have the authority to define what falls under the umbrella of the public interest? If this determination is made by the very entities responsible for managing these assets, it inherently introduces a conflict of interest.

In such a situation, the potential for abuse and overreach becomes apparent, as decisions that impact shareholders' investments and rights could be justified under the guise of protecting “public interest”, such as in a case of a global crash, and assets are seized to bail out those as responsible. Without the adequate checks and balances to ensure fairness and transparency. This underscores the imperative need for independent oversight and clear regulations to prevent any abuse of power.

Yet, the proposal doesn't outline clear measures to safeguard shareholders from this risk. It's crucial that these terms and conditions are precisely defined and communicated to shareholders, who entrust their assets under these recommendations. Transparency and clear protections are paramount.

What steps will the HM Treasury take to address and eliminate this concern?

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Examining Cost Factors and Related Motive:

Computershare, a notable direct registrar, allows asset owners to exercise their shareholder rights through their platform without incurring any additional fees. Yet, the HM Treasury’s proposal frequently mentions associated charges for shareholder services within this new model.

Considering that established and respected institutions like Computershare can provide cost-effective services for Direct Registration System (DRS'd) assets, what incentive do shareholders have to surrender their legal ownership of their stock to introduces the imposition of additional costs? And why it isn't this more thoroughly acknowledged within the proposal as a cautionary note to those who may be impacted?

In a financial landscape where costs are incessantly on the rise, imposing potential financial burdens on individual shareholders appears both inequitable and unjust. When we consider that Option One, of the four proposed digitised models, is presented as a “lower cost option” (pg.14) compared to the other alternatives, it raises questions why a financially more burdensome alternative (Option Three) is favoured over a cost-effective solution, especially when other models were rejected for costing too much (Option Two).

This decision gives rise to concerns that the HM Treasury may be seeking to exploit shareholders for personal financial gain, and it prompts the need for further investigation into whether the HM Treasury's advocacy for the transfer of CSD-mandated shares is orchestrated as a means to generate revenue and income for the government.

In such a scenario, we must examine whether this proposal is one that aligns with the needs and best interests of the shareholders, or if it is, in fact, being promoted as a new business venture, mandating customers in the transfer of their assets whilst charging shareholders to exercise their basic rights through the utilisation of their services.

Given the restrictive budgetary constraints hindering the selective choice of workable digitised solutions as outlined in this proposal, it's challenging to dispute the likelihood of the latter scenario.

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The Advantages of the Direct Registrar Over the CSD Model:

Computershare as our base example of a reputable, respected and leading direct registrar offers shareholders a spectrum of ownership options, exemplifying the principle of choice in modern finance. Under this model, shareholders have the freedom to select their preferred method of holding shares, be it through traditional physical paper share certificates or modern digital accounts.

This flexibility empowers shareholders, allowing them to tailor their investment management to their individual preferences and needs. Whether one opts for a tangible certificate or a digital account registered in their own name, they retain direct control over their shares. This translates into tangible benefits, such as the ability to exercise rights like voting more directly and without unnecessary intermediaries.

Furthermore, the Computershare model is forward-thinking, already incorporating a range of digital solutions that facilitate shareholder-company interactions. Shareholders can engage in essential activities like voting online or receiving electronic communications, making the system more efficient and environmentally friendly. Notably, these services are provided without incurring additional charges, preserving shareholder interests.

However, the proposed CSD model represents a departure from these advantages. By consolidating all shares into a central digital repository, it concentrates control over a significant portion of the share ownership system. This centralisation potentially exposes the system to undue influence and manipulation by powerful entities, including the government or large financial institutions.

Shareholders, despite maintaining "beneficial" ownership of their shares, face a diminishing degree of control. This relinquishment of control could curtail their ability to exercise crucial shareholder rights, such as voting or selling shares, as the entity managing the CSD assumes a more prominent role.

Perhaps the most critical concern pertains to privacy. With all shareholder data coalescing into a single repository, questions naturally arise regarding how this information is accessed and safeguarded. Without stringent measures in place, the risk of personal information misuse or data breaches becomes a pressing issue. The potential consequences are dire, with shareholders' sensitive data susceptible to unauthorised access, potentially leading to privacy breaches, identity theft, or financial losses.

This leads to the question: why would shareholders willingly embrace the CSD model when it clearly offers significantly fewer benefits than the existing direct registrar system?

The advantages of choice, direct control, existing digital solutions, and cost-effectiveness embodied by the current model stand in stark contrast to the potential drawbacks of centralised control, reduced shareholder agency, and privacy concerns inherent in the CSD proposal.

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Data Privacy and Security Concerns Within the Nominee:

Digitisation implies that sensitive shareholder data will be stored electronically. The crucial concern here is how the government plans to ensure the security and privacy of this data, protecting it from potential cyberattacks or unauthorised access that could jeopardise shareholders' personal information.

One significant risk is the government's control over shareholder data. If data privacy isn't heavily prioritised, there's a real danger of government officials or employees accessing shareholders' personal and financial information without consent. For affluent shareholders, this could mean unauthorised individuals gaining insights into their investment portfolios, financial transactions, and personal details, including home addresses and contact information.

Consider a scenario where a government insider with access to shareholder data decides to leak sensitive information about affluent shareholders to the public or unauthorised parties. This exposure could lead to harassment or unsolicited solicitations, potentially compromising their financial standing or worse yet, safety.

The examples of previous cybersecurity incidents in the UK, such as the Parliament Email Hacking in 2017, the NHS WannaCry Ransomware Attack in 2017, and the Foreign Office Cyberattack in 2021, serve as stark reminders of the government's historical vulnerabilities in safeguarding sensitive information. These incidents raise questions about the government's ability to effectively manage data security, especially when considering the proposed shift to a Central Securities Depository (CSD) model.

In contrast, examining a direct registrar like Computershare reveals distinct advantages in terms of data security. Computershare specialises in shareholder services, prioritising secure record-keeping and data management. Their dedicated protocols and infrastructure are designed to fortify data security, employing encryption techniques and access controls to thwart unauthorised access.

Furthermore, professional shareholder service providers often maintain cybersecurity teams, ensuring proactive monitoring and defence against cyber threats. These comprehensive measures not only protect sensitive shareholder information but also ensure compliance with data protection regulations and industry standards.

As such, the transition to a CSD raises vital questions about data security and privacy in the hands of the government. Consideration of specialised shareholder service providers with a strong track record in data protection may offer a more secure path forward.

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Governmental Influence on Shareholdings:

Within the proposed centralised CSD model, how is objectivity guaranteed in the management of shareholder assets? Considerations as listed below:

1.	Control Over Nominee Structure: If the government gains significant control over the nominee structure holding shares, they could potentially manipulate the entities managing these nominees. They might install nominees who are loyal to government interests rather than protecting shareholder rights. The impact of such a scenario could be significant, with shareholders losing their say in crucial corporate decisions such as board elections or company strategy - as the government-appointed nominees might prioritise the government's interests over the shareholder’s financial well-being.

2.	Blocking Access to Information: In a corrupt scenario, the government might limit or censor access to share-related information, potentially resulting in uninformed investment choices. This could leave shareholders without vital data regarding a stock's financial condition or market dynamics, essential for safeguarding their investments.

3.	Timing Disparities in Trading: If intermediaries control the nominee structure, it might result in information asymmetry, where certain shareholders have more timely access to critical information. This situation could grant financial institutions an unfair advantage in crafting investment strategies. For example, if the nominee structure controlled by financial institutions provides advanced notice of corporate announcements to institutional investors but delays this information for retail investors, institutions could profit while disadvantaging retail investors. Delays in information reaching retail investors could lead to slower reactions to market events, potentially causing them to miss out on vital trading opportunities or face increased risks.

4.	Interference with Voting Rights: Government interference could extend to voting rights. For example, the government might pressure or incentivise the nominees to vote in favour of decisions that align with the government's interests but might not be in the best interest of shareholders. Decisions such as mergers, acquisitions, or leadership changes, could be influenced by the government, potentially harming shareholder investments.

5.	Asset Seizure: In an extreme case, a corrupt government might attempt to seize assets held within the nominee structure, including shareholders' shares, without due process or valid reasons

These concerns underscore the critical need for robust safeguards, clear regulations, and ongoing oversight to ensure that the digitisation of shareholdings and the use of nominee structures do not compromise the rights and interests of retail shareholders.

How does the HM Treasury intend to address these risks? And empower shareholders in these ongoing discussions surrounding accountability to prevent issues of conflict, transparency obstruction, or abuse within these centralized models?

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Acknowledgement: The Other Proposed Models:

1] Digital Upgrade of Current System:

Model One presents a cost-effective solution for digitising the current system while preserving shareholders' choice to maintain their shares within the direct registrar. This aligns with the interests of shareholders whilst fulfilling government objectives, serving their needs respectively.

The report’s dismissal of this model states:

"However, it retains one aspect of the current system that many of those consulted wished to see removed – a second register of shareholdings, with consequential friction as shares move between the two registers."

It's challenging to believe that informed shareholders would wish to remove the "second" ledger (which in this context, is the direct registrar, aka company ledger) in light of the fact that a nominee arrangement results in a separation between the registered shareholder (the nominee) and the beneficial owner (the individual shareholder) - and their subsequent rights.

As it remains unclear who was consulted for the purposes of this report and how this data was acquired - could you please provide details about who was approached for their input on this matter? With supporting evidence that they were informed of the implications and risks when questioned.

The rejection of this model is also attributed to the "friction" that occurs during share transfers between the two registers. This is surprising given the main aim of this proposal is the digitisation of the share handling process, which should enable seamless automation of transfers, similar to BACS payments, thereby eliminating any friction.

One might consider the option of eliminating the nominee structure entirely and advocating for DRS as an industry standard to remove any issue of friction. This approach would not only reduce the government's expenditure with establishing and maintaining a new digitised system, but would provide shareholders everywhere with more rights as connected with the direct registrar.

That is - unless there are specific reasons for the government's reluctance to relinquish control over shares already held within the nominee, and any benefits that may afford them. If applicable, the HM Treasury should disclose these benefits to shareholders to ensure there is transparency and objectivity in the government's recommendations.

Incidentally, the terminology used within the proposal when referring to the issuer's register (aka the company's ledger) as the secondary registrar is misleading. Can you please provide an explanation as to why the nominee, also known as the sub-register, is not referred to as such? The direct register is the primary register.

[2] Direct Membership for Certificated Shareholders:

The dismissal of the second model proposal to enhance the ability of certificated shareholders to become direct members of CREST arouses curiosities.

This alternative would have allowed individual shareholders to retain their positions directly on the issuer's share register, similar to their status as certificated shareholders. However, the requirement for shareholders to seek sponsors to manage their CREST accounts has been cited as a deterrent due to high associated costs.

Attributing financial constraints within the government's budget as reason for the dismissal of this model encourages speculation. While budget limitations are understandable, it's essential to weigh the potential benefits, increased shareholder agency, and the long-term health of the financial system against short-term financial constraints. Prioritising cost savings over shareholder empowerment and system resilience could have unintended consequences.

The report also raises questions as to why the UK Treasury lacks the financial resources to invest in its own systems, particularly in light of the proposal's objectives. Could you elaborate as to why this is?

One might suggest a more straightforward solution: eliminating the need for an intermediary nominee altogether, and empowering shareholders by registering their assets on the primary ledger (aka, the company ledger). This would remove the cost barrier, reduce workload for UK financial institutions and allow shareholders to take control of registering and managing their assets.

Furthermore, the report recognises DRS as an advantage:

“The advantage of [Option Two] would be that the individual shareholder would remain directly on the issuer’s share register in their own name, as they were as certificated shareholders.” (pg. 14)

So why wasn’t DRS propositioned as a preferable digitisation solution alongside the other four suggested models?

[4] Distributed Ledger Technology (DLT):

To ensure commendation is issued where due, the inclusion of Option 4 in the Digitisation Taskforce's report, which explores the adoption of Distributed Ledger Technology (DLT) in the securities framework, demonstrates a forward-thinking approach and a commitment to innovation and transparency within the securities market.

This option presents several potential benefits, including enhanced transparency, streamlined processes, improved security, and increased accessibility. Embracing technologies like DLT can indeed lead to a more equitable and robust securities ecosystem, primarily because it operates without a central authority or control. This inherently reduces the risk of third-party interference with individuals' assets, which is a considerable advantage.

However, it's perplexing that such a promising option, with its benefits of enhanced transparency, streamlined processes, improved security, and increased accessibility, was swiftly dismissed. The Taskforce stated that its primary goal was to propose practical steps for the immediate improvement of the existing system. While expediency is essential, it's crucial to question why decisions that can have a profound and lasting impact on the securities market are being rushed.

It is recognised that the Taskforce cites challenges faced by similar DLT projects as related to scale, complexity, and transition, which led to project cancellations. But the leading reason for the dismissal of this model appears to be attributed to cost and time - stating the belief that transitioning to DLT would be a:

"… lengthy process extending beyond the envisioned timeline for implementing recommendations of this report" (pg.16).

The urgency raises concerns about the nature of the decision-making process. Shouldn't it be more prudent to take the necessary time to assess and choose the correct model, especially when it concerns the long-term implementation and security of shareholders' assets? Paper certification has been a reliable method for an extended period, and transitioning to a new system should be carefully considered, rather than hurried. Why is there a rush?

Despite these challenges, it's important to acknowledge that the benefits of transparency, efficiency, and accessibility associated with DLT make it a promising option for the future of securities trading.

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Uncovering the Hidden Threat: Short Selling in Nominee Share Systems:

One challenge to the assertion of enhanced transparency within the recommended nominee structure is the risk of concealing short selling activities. In an intermediary account, when an investor borrows shares and sells them, hoping to buy them back at a lower price later, the total number of shares within said nominee can be obscured - making it difficult to distinguish between borrowed shares and those held by other investors.

Short sellers, known for their financial clout, could equally wield undue influence within this structure. For instance, if individuals affiliated with short sellers occupy key decision-making roles within the nominee structure, they may exploit their positions of influence to the detriment of retail investors during critical moments, such as a short squeeze, by impeding share transfers or favouring resolutions that benefit short sellers.

The potential implications of these concerns underscore the critical need for robust regulatory oversight and transparency safeguards to protect retail shareholders from any form of manipulation or disadvantage, particularly during high-stakes events. It is also imperative that mechanisms for dispute resolution and ensuring equitable treatment of all shareholders are established to preserve trust in the integrity of our financial system.

Holding shares directly with a registrar like Computershare, however, offers enhanced transparency and mitigates the risks associated with tracking shares and detecting naked short selling. This approach ensures clear ownership records, transparent transactions, and physical or electronic ownership certificates for shareholders. Additionally, it reduces the risk of counterfeit shares through stringent verification processes and regulatory oversight. The timeliness of ownership record updates further ensures accuracy in reflecting the total number of outstanding shares.

In contrast, a nominee structure, as proposed in the digitisation plan, introduces complexities in tracking ownership, monitoring for manipulative practices, and preserving the transparency that direct ownership provides – making the CSD model a less favourable option compared to the DRS option.

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As we progress along this path of innovation and reform, let us do so with a steadfast commitment to safeguarding shareholder rights, particularly as they are held within the direct registrar.

I eagerly anticipate your thorough consideration of these points in your forthcoming discussions.

Please ensure that shareholders are informed of how to stay updated on these important matters, and how we can continue to contribute our insights in these ongoing discussions.

Sincerely.

[APE]