Derek Pain: Eurocrats aiming to tear up paper share certificates

No Pain, No Gain

Paper share certificates are under threat yet again. After valiantly fighting off determined attempts to enforce their abolition in earlier years of this century, traditionalists are now confronted by the busybodies of Brussels.

The European Union, so prone to interfering in many aspects of our lives, is, it seems, planning to kill off the issue of certificates by 2015 and wipe out existing ones by 2020.

I was one of those who fought against the earlier attempts to end the age-old method of proof of share ownership as various City organisations attempted to foist their desire for computerised registration on unwilling shareholders. Eventually, the Government, at one time supportive of what is bureaucratically called “dematerialisation”, called a halt to the proceedings.

But my guess is that Westminster will not lift a finger to block this EU initiative. Our MPs seem quite happy to accept a succession of new Brussels directives, irrespective of damage and inconvenience inflicted. And make no mistake the ending of share certificates will cause considerable distress.

In the past the abolitionists envisaged an electronic bank-like statement replacing the dear old certificate. Just how the eurocrats intend to cement a deeply unpopular measure remains to be seen. There is talk of staying on a company's share register and avoiding the Crest electronic system.

Just why certificates should be abolished is a mystery. I suppose it is indicative of the change-for-change sake mentality of so many politicians. After all, those of us who want to stick with paper have to pay for the privilege. And the cash we have to fork out must ensure that providers are richly reward. So nobody is inconvenienced.

Many small shareholders are happy with paper. They do not subscribe to the view that everything should be electronic. Judging by computer malfunctions and frauds that come to light, there must be every chance that online certification will be subjected to such disasters.

Then there is the position of those without computers. It is reckoned that 5.1 million pensioners have never bothered to go online. Add on the middle-aged and even younger elements of society who are not computerised and it becomes clear that a sizeable section of the population has eschewed the attractions of the internet. I suggest that many of the 5.1 million pensioners are likely to be small shareholders; don't forget they are of the age that dealt with Margaret Thatcher's privatisations.

Major shareholders – and nimble-footed private ones – are already on line. What I object to is the lack of choice. The right to hold paper and pay for the privilege is likely, at the whim of bureaucrats, to be abolished. It will create unnecessary havoc among many small shareholders, mostly elderly, who could be cut off from their investments.

Indeed, non-computerised shareholders are already suffering. Some companies only send them printed annual reports, which they have to request. Dividends could arrive twice a year. All other communications are online. Another point; many internet users are under stockbroker nominee accounts and are not actually on a company's register. They cannot, therefore, attend meetings, vote, or accept any perks and receive dividends directly.

As I said on this subject seven years ago, when statistics of the day indicated that as many as 9 million shareholders were still with paper, it is “surely more sensible and simple to keep electronic and paper systems operating in tandem”. But sensibility suffers in the relentless pursuit of change which has developed as a myopic obsession in Brussels. I would welcome a far-reaching UK disengagement from the EU. Such a move would be beneficial, both economically and politically.

Finally, I am delighted that one of the no pain, no gain portfolio's laggards has this week exceeded the buying price. More about Avation next week. But in the meantime it is worth recording that the aircraft- leasing group has flown in with better-than-expected profits and a dividend increase.

Prospects are encouraging and two directors have purchased stock.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
News
Stacey Dooley was the only woman to be nominated in last month’s Grierson awards
mediaClare Balding and Davina McCall among those overlooked for Grierson awards
PROMOTED VIDEO
Voices
Joseph Kynaston Reeves arguing with Russell Brand outside the RBS’s London offices on Friday
voicesDJ Taylor: The great tradition of St Paul and Zola reached its nadir with a worker's rant to Russell Brand
News
Twitchers see things differently, depending on their gender
scienceNew study shows that birdwatching men have a lot in common with their feathered friends...
News
i100
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
News
Xander van der Burgt, at the Royal Botanic Gardens, Kew
scienceA Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
    Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

    Marian Keyes

    The author on her pre-approved Christmas, true love's parking implications and living in the moment
    Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

    Bill Granger's Christmas Eve fish feast

    Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
    Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

    Rodgers fights for his reputation

    Liverpool manager tries to stay on his feet despite waves of criticism
    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

    Michael Calvin's Last Word

    Sepp Blatter is my man of the year in sport. Bring on 2015, quick