A Letter to UK MPs - UK Digitisation Taskforce Interim Report

Dear [Local MP's Name],

I trust this message finds you well and immersed in the responsibilities of representing our community.

I am writing to bring to your attention a matter of significant concern that directly impacts constituents who are shareholders and indeed, stirred significant concern globally, prompting the need for a closer examination.

The UK Digitisation Taskforce's proposal, as currently in discussion with the HM Treasury, looks to transform the current securities trading system into a digitised format. This shift aims to modernise the way securities are managed and traded, impacting various aspects of ownership, rights, and investor participation in the process.

Please find the relevant reading for said proposal here:  https://www.gov.uk/government/publications/digitisation-taskforce

One of the major concerns is the shift towards a Central Securities Depository (CSD) model, which mandates the transfer of legal ownership to a nominee. This proposed alteration could change dramatically the dynamics of shareholder rights, as it would make us the beneficial owners of our own assets rather than retaining the crucial status of legal ownership.
Moreover, the requirement to opt in for fundamental services and incurring charges for exercising our rights raises questions about the overall impact on shareholder empowerment.

The current system allows shareholders to maintain both legal and beneficial ownership of their investments, ensuring our voices are heard in corporate matters. However, the proposed model introduces a separation between legal and beneficial ownership, potentially impacting our ability to actively participate in decision-making processes.

Furthermore, the proposal suggests an "opt-in" approach for intermediaries to provide a "baseline service," creating concerns about alignment with shareholders' best interests. The requirement for shareholders to actively opt in to exercise their fundamental rights, coupled with potential charges, contradicts the proposal's alleged objective of implementing these changes for the benefit of the shareholder.

As a concerned taxpayer and shareholder, I urge you to advocate on our behalf to ensure that any proposed changes to the securities trading system genuinely consider the rights and interests of individual investors.

Specifically, shareholders strongly advocate for the preservation of a direct registrar system that allows shares to be held on the primary registrar (aka, the company ledger), under our own legal names. This ensures a direct and transparent link between shareholders and their investments, maintaining the integrity of our ownership rights and the ability to actively participate in corporate decisions.

The importance of holding shares in our own legal names cannot be overstated, as it is a cornerstone of shareholder autonomy and accountability in the financial system. Your support in championing these critical aspects will undoubtedly contribute to a fair and equitable outcome for shareholders everywhere.

As such, I kindly request your support in highlighting these concerns to the relevant authorities (notably the HM Treasury and Douglas Flint, the chairman of the Taskforce), ensuring that the voices of constituents are heard in the ongoing discussions about the digitisation proposal. The protection of shareholder rights is not only essential for individual investors but also aligns with the principles of fairness and equity that our democratic system upholds.

Thank you for your attention to this matter. I believe that with your advocacy, we can work towards a solution that safeguards the interests of shareholders in our community.

Sincerely,

An Invested Shareholder