Subject: UK Digitisation Task Force - Interim Report

To: digitisationtaskforce@hmtreasury.gov.uk

cc: taskforce.feedback@computershare.com

cc: John.Britton@computershare.co.uk

RE: Comments on Digitisation Taskforce Interim Report



Dear Sir Douglas,

I am the leader of STP Advisory Services, a small, woman-owned business offering research and advisory services in finance and economics worldwide. I am a former manager at Depository Trust Company (now a DTCC subsidiary in the USA), where I held the title of Director of Transfer Agent Services. In that capacity I acted as liaison between the world’s largest central securities depository and transfer agents/registrars in USA and Canada. I was directly involved in the creation and implementation of DTC’s direct withdrawals at transfer agent service (DWAC), which allowed household (individual/retail) investors to move shares from registration at an intermediary (street name) to direct registration (DRS). This work was done with the cooperation of the Securities Transfer Association’s Operations Committee, of which I was a member from 1987 through 1993. Since 1993, I have consulted on central securities depository projects in multiple countries (including EU members) for the U.S. Agency for International Development.

Given this depth of knowledge on the subject of the Digitisation Taskforce, I applaud the Taskforce’s efforts toward dematerialization while keeping in mind the importance of input from investors and issuers. Requiring intermediaries to have the technical capability to process Ultimate Beneficial Owners' (UBO) withdrawal requests, even requiring issuers to engage registrars with the capacity to handle digitized ownership are all important to bring the UK financial markets to the forefront.

I am, however, deeply concerned about plans to limit household investors’ (UBO) ability to hold and own shares directly in their names once share certificates are eliminated. A direct registration system would meet the guiding principles of the Taskforce, where perspectives of issuers and UBOs should be given precedence. In particular, a program for direct registration is supported by Computershare, one of the largest registrars that operates globally. Direct registration uses the registrar’s database to house the details of the UBO, making them immediately accessible to the issuer. This is a mechanism for transparency and a foundational aspect of trust in financial markets for UBOs. Household investors are indispensable to capital markets. Their collective contribution results in a substantial pool of long-term, stable capital that supports job creation in the UK.

Direct registration with registrars to represent ownership of shares is crucial for maintaining trust in the financial system. It ensures that household investors are recognized stakeholders, as they are valued by issuers. This recognition allows UBOs to exercise essential shareholder rights like voting, board member election, and approval of changes to a company’s capital structure. These are just a few examples of corporate governance issues that are important to household investors.

Restricting share ownership registration to being through financial intermediaries would lead to disenfranchisement of an issuer’s important stakeholders, increasing household investor skepticism about market integrity. Sadly, there are far too many examples of bad behavior by financial intermediaries to the detriment of investors. This could negatively impact capital formation which would slow economic growth. Moreover, fewer household investors would mean less public scrutiny, making it easier for institutions to manipulate markets.

In summary, I strongly urge you to consider plans that expand the ability of household investors to have their ownership directly registered with the issuers whom they believe in enough to buy their stocks.

Thank you for your attention.

Sincerely,

Susanne Trimbath, PhD

Author, Economist, Researcher, Retired Professor